Short Answer
This is a fairly close and complicated legal question, that is currently being litigated, that involves multiple, fairly technical and obscure issues of federal law.
It is much more likely that the tariffs are invalid entirely, because the President does not have the authority to impose them at all, than that they are substantively invalid for singling out particular industries or companies for special treatment according to a facially rational reason as this Executive Order does (despite the clear room for abuse and favoritism which is arguably present in this case).
But, the singling out of a particular industry in a way not set forth in existing tariff schedules arguably triggers notice and hearing requirements under the Administrative Procedures Act, which were not complied with in issuing this Executive Order (something that is a problem with many of Trump's Executive Orders upon which few courts have ruled yet in the first 100 days of Trump's second term when this answer is written).
Long Answer
Are the tariffs valid at all?
I understand these as broadly granting the president power to set
tariff rates, applied by category of thing being imported, during
(self-declared) emergencies.
Despite this claim of the President in multiple Executive Orders, this is probably not a correct understanding of the law. Several lawsuits challenging this authority on different grounds are currently being litigated in at least five lawsuits, including a lawsuit pending the U.S. Court of International Trade with several U.S. states joined as parties. Preliminary relief was denied by the court in at least one of those cases brought by a group of five companies.
There is good reason to believe that Trump does not have the legal authority to impose tariffs at all. Some of the reasons that he probably doesn't have that authority are:
(1) because the act he is relying upon for that authority doesn't expressly authorize imposing tariffs and this authority has never been relied upon by anyone other than Trump to impose tariffs (legal challenge to his first attempt to do so in his first term was mooted by a negotiated resolution of the trade dispute),
(2) because the authority he is relying upon to impose tariffs, if it does exist, has to be triggered by an "emergency" which there is virtually no factual basis to claim existed when he started imposing them,
(3) because it may violate the non-delegation doctrine of constitutional law for Congress to grant its taxing power to the President,
(4) because of the related "major questions" doctrine related to the non-delegation doctrine recently created by the U.S. Supreme Court,
(5) because it violates both World Trade Organization treaties,
(6) because it violates the treaties for the U.S.-Mexico-Canada trade agreement formerly known as NAFTA which Trump renegotiated in his first term, and
(7) because the actions taken violate the Administrative Procedure Act even if there was authority to impose the tariffs at all, since the notice and hearing requirements of the Administrative Procedure Act weren't followed.
Until recently, Trump would have received the benefit of the doubt regarding his interpretation of the referenced statutes under the Chevron doctrine established by the U.S. Supreme Court in 1984, which had required federal courts to defer to agency interpretations of federal law. But, on July 28, 2024, in the case of Loper Bright Enterprises v. Raimondo, 603 U.S. 369, the U.S. Supreme Court's recently overruled the Chevron doctrine. So, Trump's interpretation of these laws are supposed to face de novo review by the courts, without any deference to the administration's views on the legal interpretation of the statutes upon which it relies, despite the fact that the agenda that enforces the statute takes the administration's position.
The notion that trade deficits on ordinary goods like car parts and clothing that are imported to the U.S. create a national security threat within the meaning of this law is dubious. President Trump is arguing in court that his declaration of an emergency is a non-justiciable political question that can't be second guessed by the Courts, but the notion that this particular determination is a non-justiciable political question is not a widely accepted legal theory.
According to the Congressional Research Service:
Summarizing the foregoing precedents, the CIT [Court of International Trade] has noted a "distinction between reviewing the substance of an exercise of discretion and reviewing an action for clear misconstruction of [a] statute, so that the authority delegated by Congress is exceeded."85 In the former scenario, the CIT explained, "this court lacks the power to review the President's lawful exercise of discretion."86 By contrast, "where statutory language limits the President, the court may review the executive's actions for 'clear misconstruction' of such limiting language."87
This Congressional Research Service report also explores other issues regarding the legal authority of the President to unilaterally impose tariffs in more depth than is possible in a Law.SE answer.
It wouldn't be impossible to write a rational judicial decision affirming Trump's ability to impose these tariffs, but there are multiple high legal hurdles that have to be overcome for this authority to be upheld.
Does creating arbitrary new tariff categories invalidate them?
Unilaterally establishing whole systems, where some dispreferred
people have to pay and other preferred people arbitrarily don't, is
very different and is exactly the thing one wouldn't assume an
executive to be authorized to do, because it's trivially abuseable.
Assume for sake of argument that Trump does have the authority to unilaterally impose tariffs, despite these concerns.
This is basically a 14th Amendment equal protection argument, and it probably meets the "rational basis" test need to overcome an equal protection challenge.
Yes, this Executive Order is being trivially abused to show favoritism. Basically the only U.S. automotive company that qualifies for this boon is Elon Musk's Tesla corporation, since no other U.S. automotive company has 85% or more domestic content for its vehicles. Not coincidentally, Elon Musk is literally a part of the Trump Administration to the point where pundits called him a "co-President" of the United States.
But, setting a threshold for U.S. automotive company content in a tariff calculated to prevent unfair foreign trade advantages and trade barriers (if, as Trump claims, they exist), would be a rational basis for distinguishing who does and doesn't get the tax break (if he has the authority to set tariffs exists at all). Congress could certainly make that kind of distinction, and routinely does so.
Realistically, any court willing to bend over backward to uphold these tariffs in the face of multiple very strong arguments that he doesn't have the authority to impose them at all would almost surely not be troubled by this very trivial challenge to the validity of this aspect of his tariff policy.
On the other hand, the Administrative Procedure Act challenge to creating this new distinction may have more legal weight.
Section 604 of the Trade Act of 1974 (which is codified at 19 U.S.C. § 2483, relied upon in the Executive Order, authorizes the President to change the categories of goods to which tariffs apply, seemingly directly addressing the question.
But, it isn't as simple as that, because this change of Executive Branch action is subject to the Administrative Procedure Act which requires changes to existing regulations, like the regulation setting forth categories of goods subject to tariffs, to be made only after notice and hearing. It can't just be done by a unilateral Executive Order without following Administrative Procedure Act rules.
One of the core purposes of the Administrative Procedures Act of 1946 was to discourage the use of Executive Orders issued as decrees without notice and hearing and deliberation.
Beginning in 1933, President Franklin D. Roosevelt and the Democratic
Congress enacted several statutes that created new federal agencies as
part of the New Deal legislative plan, established to guide the United
States through the social and economic hardship caused by the Great
Depression. However, the Congress became concerned about the expanding
powers that these autonomous federal agencies now possessed, resulting
in the enactment of the APA to regulate, standardize and oversee these
federal agencies.
The APA was born in a contentious political environment. Professor
George Shepard claims that Roosevelt's opponents and supporters fought
over passage of the APA "in a pitched political battle for the life of
the New Deal" itself. Shepard notes, however, that a legislative
balance was struck with the APA, expressing "the nation's decision to
permit extensive government, but to avoid dictatorship and central
planning."
The existence of the Administrative Procedures Act is one of the main reasons that the current Trump Administration's heavy use of Executive Orders (as shown in the chart below) is unprecedented. The passage of the APA in 1946 greatly decreased the use of Executive Orders by subsequent Presidents.
From the New York Times.
The statutes relied upon in the Executive Order
3 U.S.C. § 301
3 U.S.C. § 301 relied upon in the Executive Order says (paragraph breaks not in the original and inserted for ease of reading in the Stack Exchange interface):
General authorization to delegate functions; publication of
delegations
The President of the United States is authorized to designate and
empower the head of any department or agency in the executive branch,
or any official thereof who is required to be appointed by and with
the advice and consent of the Senate, to perform without approval,
ratification, or other action by the President (1) any function which
is vested in the President by law, or (2) any function which such
officer is required or authorized by law to perform only with or
subject to the approval, ratification, or other action of the
President:
Provided, That nothing contained herein shall relieve the
President of his responsibility in office for the acts of any such
head or other official designated by him to perform such functions.
Such designation and authorization shall be in writing, shall be
published in the Federal Register, shall be subject to such terms,
conditions, and limitations as the President may deem advisable, and
shall be revocable at any time by the President in whole or in part.
So, this basically just says that the President can have a cabinet secretary deal with the details for him rather than doing it personally. This is uncontroversial and largely undisputed.
Section 604 of the Trade Act of 1974
Section 604 of the Trade Act of 1974 (which is codified at 19 U.S.C. § 2483, relied upon in the Executive Order says:
The President shall from time to time, as appropriate, embody in the
Harmonized Tariff Schedule of the United States the substance of the
relevant provisions of this chapter, and of other Acts affecting
import treatment, and actions thereunder, including removal,
modification, continuance, or imposition of any rate of duty or other
import restriction.
Section 232 of the Trade Expansion Act of 1962
Section 232 of the Trade Expansion Act of 1962 (which is codified at 19 U.S.C. § 1862 (see also historical context for how this has been used here) is the substantive basis of Trump's claimed authority to impose tariffs without any other specific authorization from Congress, says (there are two subsections (d) due to a typographical error in the original act, and I have noted that with [sic] in the quotation above):
Safeguarding national security
(a)Prohibition on decrease or elimination of duties or other import
restrictions if such reduction or elimination would threaten to impair
national security
No action shall be taken pursuant to section 1821(a) of this title or
pursuant to section 1351 of this title to decrease or eliminate the
duty or other import restrictions on any article if the President
determines that such reduction or elimination would threaten to impair
the national security.
(b)Investigations by Secretary of Commerce to determine effects on
national security of imports of articles; consultation with Secretary
of Defense and other officials; hearings; assessment of defense
requirements; report to President; publication in Federal Register;
promulgation of regulations
(1)(A)Upon request of the head of any department or agency, upon
application of an interested party, or upon his own motion, the
Secretary of Commerce (hereafter in this section referred to as the
“Secretary”) shall immediately initiate an appropriate investigation
to determine the effects on the national security of imports of the
article which is the subject of such request, application, or motion.
(B)The Secretary shall immediately provide notice to the Secretary of
Defense of any investigation initiated under this section.
(2)(A)In the course of any investigation conducted under this
subsection, the Secretary shall—
(i)consult with the Secretary of Defense regarding the methodological
and policy questions raised in any investigation initiated under
paragraph (1),
(ii)seek information and advice from, and consult with, appropriate
officers of the United States, and
(iii)if it is appropriate and after reasonable notice, hold public
hearings or otherwise afford interested parties an opportunity to
present information and advice relevant to such investigation.
(B)Upon the request of the Secretary, the Secretary of Defense shall
provide the Secretary an assessment of the defense requirements of any
article that is the subject of an investigation conducted under this
section.
(3)(A)By no later than the date that is 270 days after the date on
which an investigation is initiated under paragraph (1) with respect
to any article, the Secretary shall submit to the President a report
on the findings of such investigation with respect to the effect of
the importation of such article in such quantities or under such
circumstances upon the national security and, based on such findings,
the recommendations of the Secretary for action or inaction under this
section. If the Secretary finds that such article is being imported
into the United States in such quantities or under such circumstances
as to threaten to impair the national security, the Secretary shall so
advise the President in such report.
(B)Any portion of the report submitted by the Secretary under
subparagraph (A) which does not contain classified information or
proprietary information shall be published in the Federal Register.
(4)The Secretary shall prescribe such procedural regulations as may be
necessary to carry out the provisions of this subsection.
(c)Adjustment of imports; determination by President; report to
Congress; additional actions; publication in Federal Register
(1)(A)Within 90 days after receiving a report submitted under
subsection (b)(3)(A) in which the Secretary finds that an article is
being imported into the United States in such quantities or under such
circumstances as to threaten to impair the national security, the
President shall—
(i)determine whether the President concurs with the finding of the
Secretary, and
(ii)if the President concurs, determine the nature and duration of the
action that, in the judgment of the President, must be taken to adjust
the imports of the article and its derivatives so that such imports
will not threaten to impair the national security.
(B)If the President determines under subparagraph (A) to take action
to adjust imports of an article and its derivatives, the President
shall implement that action by no later than the date that is 15 days
after the day on which the President determines to take action under
subparagraph (A).
(2) By no later than the date that is 30 days after the date on which
the President makes any determinations under paragraph (1), the
President shall submit to the Congress a written statement of the
reasons why the President has decided to take action, or refused to
take action, under paragraph (1). Such statement shall be included in
the report published under subsection (e).
(3)(A)If—
(i)the action taken by the President under paragraph (1) is the
negotiation of an agreement which limits or restricts the importation
into, or the exportation to, the United States of the article that
threatens to impair national security, and
(ii)either—
(I)no such agreement is entered into before the date that is 180 days
after the date on which the President makes the determination under
paragraph (1)(A) to take such action, or
(II)such an agreement that has been entered into is not being carried
out or is ineffective in eliminating the threat to the national
security posed by imports of such article,
the President shall take such other actions as the President deems
necessary to adjust the imports of such article so that such imports
will not threaten to impair the national security. The President shall
publish in the Federal Register notice of any additional actions being
taken under this section by reason of this subparagraph . (B)If—
(i)clauses (i) and (ii) of subparagraph (A) apply, and
(ii)the President determines not to take any additional actions under
this subsection, the President shall publish in the Federal Register
such determination and the reasons on which such determination is
based.
(d) [sic] Domestic production for national defense; impact of foreign
competition on economic welfare of domestic industries For the
purposes of this section, the Secretary and the President shall, in
the light of the requirements of national security and without
excluding other relevant factors, give consideration to domestic
production needed for projected national defense requirements, the
capacity of domestic industries to meet such requirements, existing
and anticipated availabilities of the human resources, products, raw
materials, and other supplies and services essential to the national
defense, the requirements of growth of such industries and such
supplies and services including the investment, exploration, and
development necessary to assure such growth, and the importation of
goods in terms of their quantities, availabilities, character, and use
as those affect such industries and the capacity of the United States
to meet national security requirements. In the administration of this
section, the Secretary and the President shall further recognize the
close relation of the economic welfare of the Nation to our national
security, and shall take into consideration the impact of foreign
competition on the economic welfare of individual domestic industries;
and any substantial unemployment, decrease in revenues of government,
loss of skills or investment, or other serious effects resulting from
the displacement of any domestic products by excessive imports shall
be considered, without excluding other factors, in determining whether
such weakening of our internal economy may impair the national
security.
(d) [sic] Report by Secretary of Commerce
(1)Upon the disposition of each request, application, or motion under
subsection (b), the Secretary shall submit to the Congress, and
publish in the Federal Register, a report on such disposition.
The legislative veto provisions of Section 232 of the Trade Expansion Act
This statutory section also contains a subsection (f), set forth below, which creates a legislative veto of the President's decision to invoke the case. But it is unconstitutional.
This legislative veto provision was a feature of dozens of
statutes enacted by the United States federal government between
approximately 1930 and 1980, until held unconstitutional by the U.S.
Supreme Court in INS v. Chadha, [462 U.S. 919] (1983).
So, subsection (f) is now clearly unconstitutional, although many Presidential administrations have honored legislative veto provisions in existing laws anyway. Subsection (f) of 19 U.S.C. § 1862 says:
(f)Congressional disapproval of Presidential adjustment of imports of
petroleum or petroleum products; disapproval resolution
(1) An action taken by the President under subsection (c) to adjust
imports of petroleum or petroleum products shall cease to have force
and effect upon the enactment of a disapproval resolution, provided
for in paragraph (2), relating to that action.
(2)(A)This paragraph is enacted by the Congress—
(i) as an exercise of the rulemaking power of the House of
Representatives and the Senate, respectively, and as such is deemed a
part of the rules of each House, respectively, but applicable only
with respect to the procedures to be followed in that House in the
case of disapproval resolutions and such procedures supersede other
rules only to the extent that they are inconsistent therewith; and
(ii) with the full recognition of the constitutional right of either
House to change the rules (so far as relating to the procedure of that
House) at any time, in the same manner, and to the same extent as any
other rule of that House.
(B)For purposes of this subsection, the term “disapproval resolution”
means only a joint resolution of either House of Congress the matter
after the resolving clause of which is as follows: “That the Congress
disapproves the action taken under section 232 of the Trade Expansion
Act of 1962 with respect to petroleum imports under ______ dated
______.”, the first blank space being filled with the number of the proclamation, Executive order, or other Executive act issued under the
authority of subsection (c) of this section for purposes of adjusting
imports of petroleum or petroleum products and the second blank being
filled with the appropriate date.
(C)(i)All disapproval resolutions introduced in the House of
Representatives shall be referred to the Committee on Ways and Means
and all disapproval resolutions introduced in the Senate shall be
referred to the Committee on Finance.
(ii) No amendment to a disapproval resolution shall be in order in
either the House of Representatives or the Senate, and no motion to
suspend the application of this clause shall be in order in either
House nor shall it be in order in either House for the Presiding
Officer to entertain a request to suspend the application of this
clause by unanimous consent.
The fact that the act originally contained a legislative veto which was later held unconstitutional could be relevant to constitutional non-delegation doctrine analysis of the Act because Congress didn't intend to fully delegate this authority in the first place, and might not have done so without the added protection of a legislative veto.
CRS references:
85: Severstal Export GMBH v. United States, No. 18-00057, 2018 WL 1705298, at *8 (Ct. Int'l Trade Apr. 5, 2018).
86: Id. (citing Dalton, 511 U.S. at 474).
87: Severstal, 2018 WL 1705298 at *7 (quoting Corus Group, 352 F.3d at 1359).
