Good morning. The U.S. Supreme Court doesn’t seem totally convinced by the Trump administration’s latest spin on tariffs – more on that below, along with the Liberals’ search for Conservative defectors and Shane Bieber sticking with the Jays. But first:

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When Donald Trump talks about tariffs, a cash register tends to ring. “I always say tariffs is the most beautiful word to me in the dictionary,” the U.S. President announced just after his January inauguration, “because tariffs are going to make us rich as hell.” He described “Liberation Day” – that April afternoon when Trump slapped levies on nearly every country exporting goods to the States – as “the day we began to make America wealthy again.” He’s bragged on social media about “all of the TRILLIONS OF DOLLARS” his tariffs already brought in.

So it was surprising to hear Trump’s signature economic policy billed as a bureaucratic move instead. Yesterday, his administration’s top lawyer, U.S. Solicitor-General John Sauer, tried to convince the Supreme Court that the White House’s trade war does not tread on Congress’s power over taxation. The President isn’t using tariffs to boost revenue, Sauer suggested – he’s simply regulating imports. “The fact that they raise revenue is only incidental.”

That framing didn’t quite land with all the justices. “I just don’t understand this argument,” Sonia Sotomayor said yesterday from the bench. “You want to say tariffs are not taxes, but that’s exactly what they are.” Even conservative justices seemed unpersuaded by Sauer’s position. “The vehicle is the imposition of taxes on Americans, and that has always been a core power of Congress,” Chief Justice John Roberts added. Neil Gorsuch warned of “a one-way ratchet” toward consolidating power in the executive branch.

Testing the limits

Their skepticism is a bit of a departure: Since Trump returned to office, the Supreme Court’s conservative majority has been very open to his declarations of presidential authority. They’ve let him gut funding and foreign aid appropriated by Congress, fire the leaders of independent agencies, ban transgender troops from serving in the military and conduct aggressive immigration raids. But those emergency orders – Trump has won more than 20 of them this year – were technically on a temporary basis. His tariffs are meant to have staying power.

To impose them, he’s relied on the International Emergency Economic Powers Act, a 1977 U.S. law that gives the president broad leeway to regulate foreign transactions “to deal with any unusual or extraordinary threat.” In the past, the White House has used IEEPA to justify U.S. sanctions – on South Africa in 1985 for its system of apartheid, on Russia in 2022 for its invasion of Ukraine. Trump contends that the fentanyl crisis and, especially, America’s trade deficits with other countries constitute a national emergency.

You could argue, as many economists have, that the U.S. trade deficit isn’t an unusual threat, given that it’s existed for 54 years. You could question whether tariffs are even a good remedy, since the Dallas Federal Reserve found no connection between high import levies and the size of a country’s trade deficit. But the U.S. states and small businesses challenging the White House have taken another approach: They point out that tariffs just aren’t a part of the IEEPA toolbox. Trump’s favourite word doesn’t appear once in the legislation. Neither do its cousins “duties,” “imposts,” “customs” or “taxes.”

In the meantime

The justices have until June to render their decision, although it will likely arrive sooner than that. Three lower courts have ruled against the Trump administration on this case, and if the Supreme Court sides with them, the federal government could be forced to refund importers a gigantic chunk of money. U.S. Customs and Border Patrol estimates that, as of late September, American businesses shelled out roughly US$90-billion to cover the IEEPA tariffs.

If this Supreme Court wanted to be consistent, they’d strike down Trump’s economic actions as executive overreach, much like they did when Joe Biden attempted to forgive student loans, regulate carbon admissions, and issue a moratorium on evictions during the pandemic. But Trump isn’t out of tariff options if the ruling doesn’t go his way. He’s already leaned on the Trade Expansion Act of 1962 to punish Canada’s steel, aluminum, auto, lumber and copper industries. There’s also a 1974 Trade Act that would let him impose a 15-per-cent global tariff for 150 days.

Or, you know, Trump could try to work alongside Congress, which actually holds the power of the purse. Republicans do have a majority in both the House and Senate, and those lawmakers have been extremely willing to go along with the President. But perhaps they worry someone will break out the calculators. The non-partisan Tax Foundation just found that, this year, Trump’s IEEPA tariffs amount to a tax hike of US$1,200 on every American household. By next year, it’ll be up to $1,600.

Industry Minister Mélanie Joly said the Liberal Party spent years pursuing Nova Scotia MP Chris d’Entremont – and now that he’s crossed the floor, the still-minority government is keen to pad out its ranks. Read more here about their efforts to recruit other Conservative MPs.