Trump’s supreme court strategy is to redefine ‘tariffs’. Will the justices buy it? | Trump tariffs

Donald Trump faced arguably the biggest test yet over his controversial use of executive power at the U.S. Supreme Court on Wednesday. The stakes couldn’t be higher – “literally, LIFE OR DEATH” for the United States, at least according to the president.

Trump’s revolutionary economic policy, his radical tariff regime, was in the dock – particularly the legal mechanism his administration used to enforce it. And the man dispatched to defend the White House made a somewhat confusing argument.

“These are regulatory rates,” US Attorney General John Sauer assured the court. “They don’t generate revenue. The fact that they generate revenue is only incidental.”

It was a curious, and somewhat confusing, explanation — tariffs on goods from abroad may raise revenue, but do not generate any — designed to counter lower court rulings that set the stage for this test at the nation’s highest court.

A federal appeals court in Washington, DC, ruled in August that the International Emergency Economic Powers Act (IEEPA), a 1977 law invoked by Trump to impose many of his tariffs., did not grant “the power to tax” to the president.

The Constitution gives Congress the exclusive power to levy taxes. Trump bypassed Congress – legally, his aides insist – to implement a policy estimated to amount to the biggest tax hike since 1993.

So on Wednesday morning, the administration appeared to argue before the Supreme Court that these tariffs – taxes paid by myriad American companies on imported products – were not Really taxes at all.

The critics don’t hear it. “Anyone can look it up in the dictionary,” Maria Cantwell, a Democratic senator from Washington, told the Guardian. “The tariffs are an import tax, pure and simple. I guess the administration understands that.”

“I’m actually surprised there are so many gaps,” Cantwell added of the administration’s case.

The court doesn’t seem convinced either. “You mean tariffs are not taxes,” said liberal Justice Sonia Sotomayor. “But that’s exactly what they are.”

Some conservatives on the bench also seemed skeptical. “The vehicle is the imposition of taxes on Americans, and that has always been a core power of Congress,” Chief Justice John Roberts said.

The administration’s argument that the fact that tariffs generate funds is “only incidental” might be more convincing if the president spent less time bragging about the amount of money raised. “My tariffs raise hundreds of billions of dollars,” Trump said in a speech hours after the hearing.

The president has argued – in typically binary terms – that the fate of his flagship economic strategy is aligned with that of the nation. But many business owners in the United States, struggling with the brutal imposition of high tariffs, believe the fortunes of their businesses have been harmed by the regime.

While official statistics (at least those released before the government shutdown) show persistent inflation and a stalled job market, Trump continues to falsely claim that his program is producing exceptional results. “Our economy is booming and costs are falling dramatically,” he wrote on social media during Wednesday’s hearing.

It’s ultimately up to voters, as some did Tuesday, to decide on Trump’s agenda. For now, a handful of small businesses, along with a dozen states, have joined forces to challenge the way he has rushed the project through.

“We think this case is really about management overreach,” said Stephen Woldenberg, senior vice president of sales at Learning Resources, a toy company based near Chicago that sued the administration to invalidate Trump’s tariffs on the grounds that they exceeded his authority.

At the heart of this case is actually a “broader question,” according to Woldenberg, of who sets taxes – and how – in the United States. “We weren’t really willing to let politicians, and really just one politician, decide our fate,” he said.

That fate now lies in the hands of a court that Trump shaped. The judges pledged to speed up their decision. On Wednesday, at least, most seemed unconvinced by the administration’s defense.