The Supreme Court has heard arguments on President Donald Trump’s expansive use of trade powers. Partisans are lining up. The GOP believes that Trump is correct, while the Democrats want his powers curbed. These are plainly partisan arguments that do not address the history or the law. There is a good reason that the Constitution grants the trade power to Congress and hence good reason for the Supreme Court to restore that balance.
Article 1, Section 8 states that Congress holds the power “to lay and collect Taxes, Duties, Imposts and Excises” and “to regulate Commerce with foreign Nations.” There are no provisos or exceptions here. Clearly the Founders wanted the power of international trade to belong to the legislature. Congress has variously turned that power over to the executive, which is where it remains today.
Let’s return to the long history here. The American Revolution was inspired by many factors, but trade was among them. The East India Co., Britain’s most powerful industrial monopoly, was using the American colonies for mercantile purposes, taxing and exploiting the resources of the New World much like Spain had done with Latin America. This made it impossible for the Americans to deal with other nations independently.
Recall the Boston Tea Party. That clever scheme, in which the colonists dressed as Native Americans and dumped tea in the harbor, was a rough way of sending a message: Down with your industrial monopoly. This indicates just how important this topic was to the Founders.
Following the Revolution, the first government structure to emerge was the Articles of Confederation. It created no real central government and certainly no trade powers. It was up to the new states to negotiate their own trade deals. Some of them were between states. New York tried to tariff New Jersey and Connecticut protected its industries against Rhode Island. You can read all about it in the Federalist Papers, which arguably exaggerated the problem as a means of drumming up support for the proposed Constitution.
Indeed, a driving purpose of the Constitution was to create an American free trade zone: no internal tariffs to inhibit the development of something like a national trade interest to permit a greater degree of leverage in trade relations with other nations.
And yet by the 1780s, it was very clear to everyone that the states had their own economic interests that were not going away. The Northern states were industrializing and likely interested in a form of protection from foreign competition. The Southern states had an agricultural base and wanted to not only protect slavery but also keep foreign markets open for exports. It’s one of the great ironies of the period: The South was the free trader despite its slaves, while the industrializing North favored some measure of trade power and protection.
How to deal with this? Granting the trade power to the president would be problematic because he could pursue the policy of the party that elected him, favoring one sectional interest over another. Necessarily, that is what would happen. The Founders knew this and foresaw the possibility that this alone could be enough to break the young country into pieces.
Their solution was a novel one. It rejected the mercantilism of the old world, in which merchants would lobby the court. Instead, they granted the power to Congress, which was bicameral. It had a House of Representatives to represent the people through direct elections. However, the Senate was elected by the state legislatures, meaning that the Senate would always represent the states in perfect balance. Granting the trade power to the Congress would necessarily prevent one sectional interest from prevailing over another.
Do you see the genius here? It was the right system. It wasn’t enough to prevent trade disputes from boiling over in the context of a larger argument over slavery. The Civil War came and nearly wrecked the entire idea of the American nation. In the fallout, Congress retained its role with limited and targeted tariffs in the 1870s through the 1890s.
However, the 17th Amendment of 1913 introduced a problem. It changed the character of the Senate to make it another version of the House, directly elected by the people. That made a mess of the Founders’ original vision, one that eventually affected trade policy. The 1917 Trading with the Enemy Act amounted to a nationalization of trade power, which was reversed after World War I.
In 1930, stock markets crashed and Congress’s first instinct was to protect domestic industry with huge tariffs, the largest in U.S. history. The economic downturn worsened and the Smoot–Hawley tariffs of 1930 were scapegoated in the context of the unworkable New Deal. That kicked off the great plot to transfer trade authority to the executive branch. That happened gradually over time, culminating in the International Emergency Economic Powers Act of 1977.
The centralization of power revealed all its fullness in the struggles over the North American Free Trade Agreement and the ratification of the World Trade Organization.
Behind this entire postwar history has been the presumption that the executive branch is a better guardian of the free-trade idea than Congress; witness the 1930 debacle. That theory worked for many decades. Then, in 2016, Trump was elected. I have my own private theory that the fears of his intervention in this stable system were a driving factor in the establishment’s wild opposition to him. However, I cannot prove that.
In any case, taking power again in 2025, Trump immediately got to work deploying tariffs as his preferred method of diplomacy. The results have not been as catastrophic as people predicted, and some good has come out of this in terms of trade negotiations. However, the trade regime has been wildly disruptive to many industries that rely on imports.
Just for example, the tariff rates on the import of Italian dried pasta are a forbidding 170 percent, which makes business impossible for small Italian restaurants that seek authenticity. They are having to switch their entire business model. And for what reason? There is no U.S. pasta industry that is suffering and in need of industrial protection. These are simply taxes on U.S. business.
A central principle behind the Constitution is to check power with a multiplicity of competing institutions. This structure was born of bitter history and a learned understanding of republican ideals. Just as an intuitive check, does it not seem unlikely that the Founders imagined trade policy looking like it has over these past 10 months? Indeed.
The Supreme Court will have to unravel this complicated history and come up with a workable principle that deals with the core question: Who is in charge of U.S. trade policy? The Constitution says Congress, while Congress has traditionally transferred that authority to the executive. Can Congress just throw away a power because it doesn’t want the responsibility?
That’s the essential question. At this point, it seems like the best answer for both economic health and constitutional integrity is for Congress to take back its power. No, that won’t create a perfect world, but it has to be better than a system that the Founders did not design.
