Grant: Okay, okay, okay. Welcome back to Power Check. Grant here. Maya: And I'm Maya, and Grant, we have a big one today. Grant: Huge. So here's the setup: February twentieth two thousand twenty six the Supreme Court drops a six three ruling in Learning Resources v Trump. IEEPA tariffs: gone. Unconstitutional. Maya: And wait for it... Grant: Within hours, new tariffs under a totally different Speaker 3: law. Grant: Different Law Maya: The ink under ruling was still wet. Grant: Essentially, so the central question today: Did the courts actually check executive power here, or did the White House just treat the ruling as a routing problem? Maya: That framing is so good, and that's exactly what we're going to dig into. Grant: So, first we walk through what IEEPA actually says—like the actual statutory text—because this is where it gets good. Maya: Right; forty-eight years on the books, never used to impose tariffs once until nineteen twenty-five. Grant: Then we get into the six-three vote itself, two tracks inside the majority, Kagan's plain text read, Roberts' major questions lane, three dissenters who'd have handed the president a blank check. Maya: And then the pivot, section one twenty-two of the Trade Act of nineteen seventy-four, also never used before. Treasury Secretary Bessent basically admitted the goal was virtually unchanged tariff revenue. Grant: So, yeah, same destination, different road. Maya: And there's the refund question. According to BDO, we're talking $166 billion in unlawfully collected duties. Grant: Wow. Yeah, and CBP had to build that refund process from scratch with a July 24th deadline on Section 122. Maya: And we close with our check or no check verdict. verdict. I'll give you a hint. We do not fully agree. Grant: We almost never do. All right, let's get into it. Okay, February 20th, 2026, 10 a.m. The Supreme Court drops a 6-3 ruling, IEEPA tariffs gone, unconstitutional. The President, according to the SCOTUSblog, had been using a 1977 law to impose sweeping tariffs, and the court said, No, that's not what that law does. Maya: And you'd think, okay, big ruling, major rebuke, executive power checked. Grant: Wait for it. Maya: Oh, No. Grant: Same day, hours later, Trump holds a press conference and signs a new proclamation, new tariffs, different legal hook, Section 122 of the Trade Act of 1974, 10% globally effective within days. Maya: So the court rules in the morning, and new tariffs are signed by evening? Grant: Yeah, yeah, yeah. Same day, according to Global Trade Alert. Alert. Within hours, the White House issued three separate presidential actions to terminate the IEEPA tariffs and replace them. Maya: Hmm. So the question I keep coming back to is, did the court actually stop anything? Grant: That's the whole episode right there, Maya. Maya: I mean, on paper, the court did its job. Six justices said the president overstepped. Grant: Right. And PIIE made the point clearly. The Constitution says the... As the power to tax, including tariffs, sits with Congress full stop, the court agreed. Maya: So the IEEPA tariffs are dead—legally dead. Grant: Legally dead, but the Holland Knight write up flagged something important: Customs and Border Protection couldn't even stop collecting tariffs based on the ruling alone. They needed a separate executive directive. Maya: So the government's own machinery keeps running until the President tells it to stop. Stop! Grant: Which he did, and then started it right back up under a different statute. Maya: Okay, okay, so here's what gets me. Section 122, that's a real tariff law. Congress wrote it specifically to authorize tariffs. Grant: Exactly; which is why the pivot happened so fast. This wasn't improvised; the fallback was ready. Maya: Oh, they had homework done. Grant: Someone did—and Section 122 caps out at fifteen percent. for a hundred fifty days, the clock starts February twenty-fourth; that puts the expiration at July twenty-fourth, twenty twenty six. Maya: Which is unresolved as of right now? Unresolved. Grant: Completely; but here's the thing: if the Administration treated a Supreme Court ruling as a logistical problem rather than a hard stop, you have to ask, what does the underlying law actually say, and why did the Court rule the way it did? Maya: Thoughtfully, meaning you need to understand what IEEPA was even supposed to do before you can evaluate what the court found. Grant: And that's the only question that matters right now. So to understand why the court ruled the way it did, you have to actually read what IEEPA says, and I mean read it carefully, because the whole argument lives or dies in a handful of words. Speaker 4: Give me the plain language version, no law school required. Grant: Okay, so IEEPA, passed in nineteen seventy seven, gives the President power to act during a declared national emergency involving a foreign Speaker 3: threat. Grant: or in threat; think "asset freezes," "transaction blocks," "sanctions." That's the historical use, freeze foreign assets, stop deals. Speaker 4: Right, so sanctions country not charge everyone a tax. Grant: Exactly, and here's the thing, the word "tariff" appears nowhere in the statute, not once. Speaker 4: Nowhere? Grant: Nowhere. What the law actually says is the President can regulate various transactions. including importation. That's the whole hook. Two words. Regulate importation. Speaker 4: And the administration said, well, regulating imports can include charging people money for imports. Grant: Yep, that's the entire legal theory. And look, I get the argument on paper, but Holland and Knight broke down the statutory structure, and it is telling. IEEPA's operative provision lists nine verbs and eleven tr- In seven transaction types, things like investigate, block, prohibit, void. All of them are about controlling, freezing, stopping; none of them raises a dollar of revenue. Speaker 4: So 'regulate importation' would be the only one, out of all those combinations, to somehow mean charge a tax? Grant: According to Holland and Knight, reading it that way would make that phrase the only one among ninety-nine verb object Speaker 3: pairs in the Constitution that does not clearly describe a governmental power. Grant: object combinations to control. And for revenue-raising power, ninety-nine combinations, Maya: Wow. Grant: and suddenly this secret menu item lets you run fiscal policy? Maya: The secret menu tariff. Grant: Right; and the government's own lawyers essentially conceded there's no inherent Article II authority here; no "presidents can always do tariffs" argument. They put everything on that single word "regulate." Maya: Which is a huge concession; you're saying the entire constitutional case rests on one word doing an enormous amount of work. Grant: Massive; and here's the historical footnote that Roberts himself called telling in the majority opinion. Per the Library of Congress analysis, IEEPA was enacted in nineteen seventy-seven and never used to impose tariffs until February twenty twenty-five—forty-eight years! Maya: So the legal theory that this statute always secretly authorized the President to tax all global imports, nobody tried it for nearly half a century. Grant: Not once prior to 2025, IEEPA was used for things like freezing Iranian assets, sanctioning Russian oligarchs, blocking specific transactions, Maya: Right. Grant: bread and butter emergency economic tools. Maya: Okay, so walk me through how you actually get from regulate importation to charge Canada 25% on everything. Grant: The administration's logic was fentanyl is crossing the border. That's an emergency with a foreign source. Imports are connected to it, so regulating those imports includes taxing them. Maya: I mean, I see the chain of reasoning, but tariffs on all Canadian goods to address fentanyl trafficking? Grant: That's the stretch, and it only gets bigger on Liberation Day, April 2025, when it became reciprocal tariffs on most of the world justified by trade deficits as an emergency. See—at that point, you're not talking about a targeted emergency response—you're talking about rewriting global trade policy through two words in a nineteen seventy seven statute. Maya: And that gap—between what the statute actually lists and what the Administration claimed it authorized—that's exactly where the Court's reasoning is going to dig in. Grant: Which is where we're headed, because Roberts wrote something specific about what happens structurally When you read regulate to include taxation and the Export Clause problem it creates, that's the next thread to pull. So the six justices agreed on the result, but here's the thing—the reasoning split into two lanes. Maya: Walk me through the lineup. Grant: Roberts wrote the opinion, Sotomayor, Kagan, Gorsuch, Barrett and Jackson-all six said IEEPA does not authorize tariffs. Kavanaugh, Thomas and Alito dissented. Maya: And two of those dissenters, Kavanaugh and...wait, Alito was one? Grant: Kavanaugh, Alito. Oh, Thomas, but here's what's genuinely interesting. Gorsuch and Barrett, both Trump appointees, sided with the majority. Maya: So a president loses a tariff fight partly because his own nominees said no. That's a detail worth sitting with. Grant: Yeah, the scoreboard does not care who picked you. Maya: So what split the majority internally? Grant: Okay, so according to SCOTUSblog's breakdown, there are basically two Exactly two coalitions inside the six,--Kagan, Sotomayor, and Jackson said it's straightforward statutory interpretation; the word regulate just does not mean tax, full stop. Maya: Plain text reading. No extra doctrine needed. Grant: Right. Then Roberts, Gorsuch, and Barrett went further and invoked the Major Questions Doctrine: according to Holland Knight's analysis, they reasoned Congress cannot hand over highly consequential power Speaker 3: to an administrative agency unless it Grant: Power through ambiguous language, especially when a core congressional power, taxation, is on the table. Maya: So the left block got there through ordinary statutory reading, and the right block needed a clearer statement rule on top. Same destination, different roads. Grant: Exactly; and then there's the Export Clause angle, which I love because it's just so clean. Maya: You've been waiting to drop this one. Grant: So, per Skadden's write up on the ruling: The court noted that IEEPA also authorizes regulating exportation; if "regulate" means tax, then IEEPA would give the President power to tax exports—and the Constitution expressly forbids export taxes. Maya: So the Government's own reading would have created an unconstitutional power it didn't even want. Grant: The majority used that to show the whole interpretation was structurally broken. Working, not just textually weak. Maya: Own goal! Grant: Pretty much. Now Kavanaugh's dissent (sixty three pages, per BDO) basically argued IEEPA does clearly authorize tariffs and the major questions doctrine shouldn't apply at all to foreign affairs statutes. Maya: Hmm...and Skadden flagged that the dissent also raised something practical: the ruling creates uncertainty for the bilateral trade agreements... hence the Administration had already negotiated under IEEPA authority. Grant: Which is a real point. Those deals rest on an executive order that is now invalid. That's not hypothetical. Maya: So, from an institutionalist view, the majority did exactly its job, held a statute to its text, didn't let emergency framing swallow congressional power. But grant the thing nagging at me. Grant: Is why it took this long. Maya: Yes; a full year of tariff collection before any check landed. Grant: And speaking of checks that may or may not hold, flip that on its head for a second. Same afternoon the ruling came down, there's already a new executive order on the table. That's where we're going next. OK, so here's the tell: same afternoon as the ruling, the White House rolls out Section 122 of the Trade Act of 1974, a statute that no president has ever used, not once in fifty-two years. Maya: Never used before? Like it's been sitting on the shelf since 1974 and nobody touched it? Grant: Nobody. According to the Library of Congress, this is literally the first time. And the language in the proclamation? came out within hours. That is not improvisation, Maya. That's a prepared fallback. Maya: So they had the backup plan already printed and ready to go. Grant: Right. And here is where it gets genuinely interesting. Section 122 caps tariffs at 15% for up to 150 days. The justification the president has to invoke is large and serious balance of payments deficits. Maya: Mm-mm. Grant: Specifically, that That term, as Congress understood it in nineteen seventy four. Maya: Okay, so. Grant: What's the legal wrinkle there? Maya: Oh, you're going to love this part. The administration's own lawyers argued in the IEEPA case that Section 122 was no substitute for IEEPA because trade deficits and balance of payments deficits are legally distinct concepts. Grant: Wait, wait, wait. They said in court that Section 122 wouldn't work and then used it the same afternoon? Maya: Yeah, yeah, yeah. Same-day. The Court of International Trade picked. Picked up on exactly that problem. In May it ruled the section one twenty two tariffs illegal on a two to one vote, finding that the administration had cited trade deficits not a balance of payments deficit as the statute actually requires. Grant: So the legal argument that sank IEEPA and now the backup statute is already being struck down for the same structural reason, just a different wrapper. Maya: That's it. And here's the other piece. Treasury Secretary Bessent said publicly that day that tariff revenue projections are "virtually unchanged" for twenty twenty six-Section 122 as the bridge, Section 232 and 301 investigations to follow. Grant: So the policy goal never moved, just the legal wrapper. Maya: Exactly-that's the tell I kept coming back to. When your own lawyers say a statute doesn't fit, and you deploy it anyway, with an Then hours of losing, the court ruling wasn't a check. It was a scheduling problem. Grant: And Section 122 expires July 24th. That's the built-in cliff. The 301 investigations are the longer runway. USTR Greer launched them to cover 99% of U.S. imports. Maya: Which is not a coincidence given the timing. So the real question heading into the refund segment is this. Billions of dollars were collected under IEEPA. while all of this was in litigation. The court called that authority illegal. Grant: Mm-hmm. Maya: So what happens to the money? Grant: Yeah, that's a very different problem and a very large one. Maya: So all that money the government collected illegally, here's the thing: The Supreme Court ruling said the tariffs were unconstitutional. It said nothing about how to give $166 billion back. Grant: Nothing? Like the court just left? Maya: Basically, CBP admitted it had no way to issue refunds automatically. Zero. According to CBP's own declaration, that's $166 billion across... across 53 million entries, filed by over 330,000 importers. Grant: Wait, wait, wait, 330,000 importers? Maya: Yeah, yeah, and Penn Wharton pegged total IEEPA collections at up to $175 billion, accruing roughly $22 million in interest every single day. So the meter is running. Grant: Great! So the Court of International Trade stepped in? Maya: On March 4, yes, Judge Eaton ordered CBP to start refunds to all importers, not just the ones who sued. Then two days later, he paused his own order because CBP said it physically couldn't comply yet. Grant: He had to build a system first. Maya: From scratch, they built something called CAPE, a whole new customs portal. As of late April, they finally launched it. Grant: Okay, but here's where it gets messy. Refunds go to the importers. Importer of record, right? Not to the retailers or consumers who actually absorb the cost. Maya: That's the real problem. A huge share of those tariff costs got passed downstream, to buyers, to consumers. The importer gets the check. The person who actually paid more for stuff probably gets nothing. And that question is expected to generate years of litigation. Grant: So the check arrived just for the wrong people, possibly, which Honestly, it's kind of the perfect metaphor for this whole story. Maya: And that raises a question we haven't answered yet, did any of these oversight mechanisms actually work? Because that's where we're landing next. So, here's where we land: the court drew a real line on February sixth to three, IEEPA is out. Grant: Mm-hmm. Maya: Clear constitutional grounding; for me that's a partial check. Grant: Partial? I'd say fragile. The six-to-three vote is durable. Roberts wrote it, not an emergency docket. But the Major Questions doctrine only bites where statutory language is ambiguous. Once the Administration finds a statute that explicitly says tariffs, Speaker 4: Right! Grant: that whole tool disappears. Maya: And Section 122 is already in court; the Court of International Trade struck it down May seventh, said a trade deficit is not the same as a balance of Speaker 3: payments. Maya: Balance of Payments Deficit under the 1974 Act Grant: Right, and here's the thing: the PIIE noted that both the House and Senate actually passed bills disapproving of the IEEPA tariffs. Congress has opinions; what it doesn't have is follow through. Maya: Exactly; courts block individual moves, Congress should be filling the gap, and they're just not. Grant: So, July twenty-fourth, Section 122 expires. Tariffs automatically. Does Congress act? Does the President pivot to Section 301 Maya: of the Trade Act, Grant: which has no rate cap and no time limit? Maya: Or Global Alert flag this—he lets it expire, declares a new emergency, restarts the one-hundred-fifty day clock, de facto perpetual tariff. Grant: Check or no check, Grant. Maya: Partial check. The doctrine held; the power didn't stop. Grant: Fragile check—one good statute away from no check at all. Maya: Okay, so that's a wrap on this one. And honestly, Maya, I keep coming back to that same-day pivot. Court rules in the morning, new tariffs signed by evening. That's the image that sticks. Grant: Right, and that's the whole episode in one moment. The ruling mattered. The constitutional line was real. But the administration treated it like a logistics problem, not a stop sign. Maya: Partial Check, that's where I landed. The court did its job. Congress is still watching from the bleachers. Grant: Playfully fragile Check for me; one statute away from square one. Maya: And that's why this stuff matters. If PowerCheck helped you understand how that actually works, share this episode with one person who'd care. Follow us wherever you listen. Drop a review if you want to help others find the show. Grant: We really appreciate you being here, Grant. Maya: Thanks, Maya. Same time next week, everyone.

Grant: Okay, okay, okay. Welcome back to Power Check. Grant here. Maya: And I'm Maya, and Grant, we have a big one today. Grant: Huge. So here's the setup: February twentieth two thousand twenty six the Supreme Court drops a six three ruling in Learning Resources v Trump. IEEPA tariffs: gone. Unconstitutional. Maya: And wait for it... Grant: Within hours, new tariffs under a totally different Speaker 3: law. Grant: Different Law Maya: The ink under ruling was still wet. Grant: Essentially, so the central question today: Did the courts actually check executive power here, or did the White House just treat the ruling as a routing problem? Maya: That framing is so good, and that's exactly what we're going to dig into. Grant: So, first we walk through what IEEPA actually says—like the actual statutory text—because this is where it gets good. Maya: Right; forty-eight years on the books, never used to impose tariffs once until nineteen twenty-five. Grant: Then we get into the six-three vote itself, two tracks inside the majority, Kagan's plain text read, Roberts' major questions lane, three dissenters who'd have handed the president a blank check. Maya: And then the pivot, section one twenty-two of the Trade Act of nineteen seventy-four, also never used before. Treasury Secretary Bessent basically admitted the goal was virtually unchanged tariff revenue. Grant: So, yeah, same destination, different road. Maya: And there's the refund question. According to BDO, we're talking $166 billion in unlawfully collected duties. Grant: Wow. Yeah, and CBP had to build that refund process from scratch with a July 24th deadline on Section 122. Maya: And we close with our check or no check verdict. verdict. I'll give you a hint. We do not fully agree. Grant: We almost never do. All right, let's get into it. Okay, February 20th, 2026, 10 a.m. The Supreme Court drops a 6-3 ruling, IEEPA tariffs gone, unconstitutional. The President, according to the SCOTUSblog, had been using a 1977 law to impose sweeping tariffs, and the court said, No, that's not what that law does. Maya: And you'd think, okay, big ruling, major rebuke, executive power checked. Grant: Wait for it. Maya: Oh, No. Grant: Same day, hours later, Trump holds a press conference and signs a new proclamation, new tariffs, different legal hook, Section 122 of the Trade Act of 1974, 10% globally effective within days. Maya: So the court rules in the morning, and new tariffs are signed by evening? Grant: Yeah, yeah, yeah. Same day, according to Global Trade Alert. Alert. Within hours, the White House issued three separate presidential actions to terminate the IEEPA tariffs and replace them. Maya: Hmm. So the question I keep coming back to is, did the court actually stop anything? Grant: That's the whole episode right there, Maya. Maya: I mean, on paper, the court did its job. Six justices said the president overstepped. Grant: Right. And PIIE made the point clearly. The Constitution says the... As the power to tax, including tariffs, sits with Congress full stop, the court agreed. Maya: So the IEEPA tariffs are dead—legally dead. Grant: Legally dead, but the Holland Knight write up flagged something important: Customs and Border Protection couldn't even stop collecting tariffs based on the ruling alone. They needed a separate executive directive. Maya: So the government's own machinery keeps running until the President tells it to stop. Stop! Grant: Which he did, and then started it right back up under a different statute. Maya: Okay, okay, so here's what gets me. Section 122, that's a real tariff law. Congress wrote it specifically to authorize tariffs. Grant: Exactly; which is why the pivot happened so fast. This wasn't improvised; the fallback was ready. Maya: Oh, they had homework done. Grant: Someone did—and Section 122 caps out at fifteen percent. for a hundred fifty days, the clock starts February twenty-fourth; that puts the expiration at July twenty-fourth, twenty twenty six. Maya: Which is unresolved as of right now? Unresolved. Grant: Completely; but here's the thing: if the Administration treated a Supreme Court ruling as a logistical problem rather than a hard stop, you have to ask, what does the underlying law actually say, and why did the Court rule the way it did? Maya: Thoughtfully, meaning you need to understand what IEEPA was even supposed to do before you can evaluate what the court found. Grant: And that's the only question that matters right now. So to understand why the court ruled the way it did, you have to actually read what IEEPA says, and I mean read it carefully, because the whole argument lives or dies in a handful of words. Speaker 4: Give me the plain language version, no law school required. Grant: Okay, so IEEPA, passed in nineteen seventy seven, gives the President power to act during a declared national emergency involving a foreign Speaker 3: threat. Grant: or in threat; think "asset freezes," "transaction blocks," "sanctions." That's the historical use, freeze foreign assets, stop deals. Speaker 4: Right, so sanctions country not charge everyone a tax. Grant: Exactly, and here's the thing, the word "tariff" appears nowhere in the statute, not once. Speaker 4: Nowhere? Grant: Nowhere. What the law actually says is the President can regulate various transactions. including importation. That's the whole hook. Two words. Regulate importation. Speaker 4: And the administration said, well, regulating imports can include charging people money for imports. Grant: Yep, that's the entire legal theory. And look, I get the argument on paper, but Holland and Knight broke down the statutory structure, and it is telling. IEEPA's operative provision lists nine verbs and eleven tr- In seven transaction types, things like investigate, block, prohibit, void. All of them are about controlling, freezing, stopping; none of them raises a dollar of revenue. Speaker 4: So 'regulate importation' would be the only one, out of all those combinations, to somehow mean charge a tax? Grant: According to Holland and Knight, reading it that way would make that phrase the only one among ninety-nine verb object Speaker 3: pairs in the Constitution that does not clearly describe a governmental power. Grant: object combinations to control. And for revenue-raising power, ninety-nine combinations, Maya: Wow. Grant: and suddenly this secret menu item lets you run fiscal policy? Maya: The secret menu tariff. Grant: Right; and the government's own lawyers essentially conceded there's no inherent Article II authority here; no "presidents can always do tariffs" argument. They put everything on that single word "regulate." Maya: Which is a huge concession; you're saying the entire constitutional case rests on one word doing an enormous amount of work. Grant: Massive; and here's the historical footnote that Roberts himself called telling in the majority opinion. Per the Library of Congress analysis, IEEPA was enacted in nineteen seventy-seven and never used to impose tariffs until February twenty twenty-five—forty-eight years! Maya: So the legal theory that this statute always secretly authorized the President to tax all global imports, nobody tried it for nearly half a century. Grant: Not once prior to 2025, IEEPA was used for things like freezing Iranian assets, sanctioning Russian oligarchs, blocking specific transactions, Maya: Right. Grant: bread and butter emergency economic tools. Maya: Okay, so walk me through how you actually get from regulate importation to charge Canada 25% on everything. Grant: The administration's logic was fentanyl is crossing the border. That's an emergency with a foreign source. Imports are connected to it, so regulating those imports includes taxing them. Maya: I mean, I see the chain of reasoning, but tariffs on all Canadian goods to address fentanyl trafficking? Grant: That's the stretch, and it only gets bigger on Liberation Day, April 2025, when it became reciprocal tariffs on most of the world justified by trade deficits as an emergency. See—at that point, you're not talking about a targeted emergency response—you're talking about rewriting global trade policy through two words in a nineteen seventy seven statute. Maya: And that gap—between what the statute actually lists and what the Administration claimed it authorized—that's exactly where the Court's reasoning is going to dig in. Grant: Which is where we're headed, because Roberts wrote something specific about what happens structurally When you read regulate to include taxation and the Export Clause problem it creates, that's the next thread to pull. So the six justices agreed on the result, but here's the thing—the reasoning split into two lanes. Maya: Walk me through the lineup. Grant: Roberts wrote the opinion, Sotomayor, Kagan, Gorsuch, Barrett and Jackson-all six said IEEPA does not authorize tariffs. Kavanaugh, Thomas and Alito dissented. Maya: And two of those dissenters, Kavanaugh and...wait, Alito was one? Grant: Kavanaugh, Alito. Oh, Thomas, but here's what's genuinely interesting. Gorsuch and Barrett, both Trump appointees, sided with the majority. Maya: So a president loses a tariff fight partly because his own nominees said no. That's a detail worth sitting with. Grant: Yeah, the scoreboard does not care who picked you. Maya: So what split the majority internally? Grant: Okay, so according to SCOTUSblog's breakdown, there are basically two Exactly two coalitions inside the six,--Kagan, Sotomayor, and Jackson said it's straightforward statutory interpretation; the word regulate just does not mean tax, full stop. Maya: Plain text reading. No extra doctrine needed. Grant: Right. Then Roberts, Gorsuch, and Barrett went further and invoked the Major Questions Doctrine: according to Holland Knight's analysis, they reasoned Congress cannot hand over highly consequential power Speaker 3: to an administrative agency unless it Grant: Power through ambiguous language, especially when a core congressional power, taxation, is on the table. Maya: So the left block got there through ordinary statutory reading, and the right block needed a clearer statement rule on top. Same destination, different roads. Grant: Exactly; and then there's the Export Clause angle, which I love because it's just so clean. Maya: You've been waiting to drop this one. Grant: So, per Skadden's write up on the ruling: The court noted that IEEPA also authorizes regulating exportation; if "regulate" means tax, then IEEPA would give the President power to tax exports—and the Constitution expressly forbids export taxes. Maya: So the Government's own reading would have created an unconstitutional power it didn't even want. Grant: The majority used that to show the whole interpretation was structurally broken. Working, not just textually weak. Maya: Own goal! Grant: Pretty much. Now Kavanaugh's dissent (sixty three pages, per BDO) basically argued IEEPA does clearly authorize tariffs and the major questions doctrine shouldn't apply at all to foreign affairs statutes. Maya: Hmm...and Skadden flagged that the dissent also raised something practical: the ruling creates uncertainty for the bilateral trade agreements... hence the Administration had already negotiated under IEEPA authority. Grant: Which is a real point. Those deals rest on an executive order that is now invalid. That's not hypothetical. Maya: So, from an institutionalist view, the majority did exactly its job, held a statute to its text, didn't let emergency framing swallow congressional power. But grant the thing nagging at me. Grant: Is why it took this long. Maya: Yes; a full year of tariff collection before any check landed. Grant: And speaking of checks that may or may not hold, flip that on its head for a second. Same afternoon the ruling came down, there's already a new executive order on the table. That's where we're going next. OK, so here's the tell: same afternoon as the ruling, the White House rolls out Section 122 of the Trade Act of 1974, a statute that no president has ever used, not once in fifty-two years. Maya: Never used before? Like it's been sitting on the shelf since 1974 and nobody touched it? Grant: Nobody. According to the Library of Congress, this is literally the first time. And the language in the proclamation? came out within hours. That is not improvisation, Maya. That's a prepared fallback. Maya: So they had the backup plan already printed and ready to go. Grant: Right. And here is where it gets genuinely interesting. Section 122 caps tariffs at 15% for up to 150 days. The justification the president has to invoke is large and serious balance of payments deficits. Maya: Mm-mm. Grant: Specifically, that That term, as Congress understood it in nineteen seventy four. Maya: Okay, so. Grant: What's the legal wrinkle there? Maya: Oh, you're going to love this part. The administration's own lawyers argued in the IEEPA case that Section 122 was no substitute for IEEPA because trade deficits and balance of payments deficits are legally distinct concepts. Grant: Wait, wait, wait. They said in court that Section 122 wouldn't work and then used it the same afternoon? Maya: Yeah, yeah, yeah. Same-day. The Court of International Trade picked. Picked up on exactly that problem. In May it ruled the section one twenty two tariffs illegal on a two to one vote, finding that the administration had cited trade deficits not a balance of payments deficit as the statute actually requires. Grant: So the legal argument that sank IEEPA and now the backup statute is already being struck down for the same structural reason, just a different wrapper. Maya: That's it. And here's the other piece. Treasury Secretary Bessent said publicly that day that tariff revenue projections are "virtually unchanged" for twenty twenty six-Section 122 as the bridge, Section 232 and 301 investigations to follow. Grant: So the policy goal never moved, just the legal wrapper. Maya: Exactly-that's the tell I kept coming back to. When your own lawyers say a statute doesn't fit, and you deploy it anyway, with an Then hours of losing, the court ruling wasn't a check. It was a scheduling problem. Grant: And Section 122 expires July 24th. That's the built-in cliff. The 301 investigations are the longer runway. USTR Greer launched them to cover 99% of U.S. imports. Maya: Which is not a coincidence given the timing. So the real question heading into the refund segment is this. Billions of dollars were collected under IEEPA. while all of this was in litigation. The court called that authority illegal. Grant: Mm-hmm. Maya: So what happens to the money? Grant: Yeah, that's a very different problem and a very large one. Maya: So all that money the government collected illegally, here's the thing: The Supreme Court ruling said the tariffs were unconstitutional. It said nothing about how to give $166 billion back. Grant: Nothing? Like the court just left? Maya: Basically, CBP admitted it had no way to issue refunds automatically. Zero. According to CBP's own declaration, that's $166 billion across... across 53 million entries, filed by over 330,000 importers. Grant: Wait, wait, wait, 330,000 importers? Maya: Yeah, yeah, and Penn Wharton pegged total IEEPA collections at up to $175 billion, accruing roughly $22 million in interest every single day. So the meter is running. Grant: Great! So the Court of International Trade stepped in? Maya: On March 4, yes, Judge Eaton ordered CBP to start refunds to all importers, not just the ones who sued. Then two days later, he paused his own order because CBP said it physically couldn't comply yet. Grant: He had to build a system first. Maya: From scratch, they built something called CAPE, a whole new customs portal. As of late April, they finally launched it. Grant: Okay, but here's where it gets messy. Refunds go to the importers. Importer of record, right? Not to the retailers or consumers who actually absorb the cost. Maya: That's the real problem. A huge share of those tariff costs got passed downstream, to buyers, to consumers. The importer gets the check. The person who actually paid more for stuff probably gets nothing. And that question is expected to generate years of litigation. Grant: So the check arrived just for the wrong people, possibly, which Honestly, it's kind of the perfect metaphor for this whole story. Maya: And that raises a question we haven't answered yet, did any of these oversight mechanisms actually work? Because that's where we're landing next. So, here's where we land: the court drew a real line on February sixth to three, IEEPA is out. Grant: Mm-hmm. Maya: Clear constitutional grounding; for me that's a partial check. Grant: Partial? I'd say fragile. The six-to-three vote is durable. Roberts wrote it, not an emergency docket. But the Major Questions doctrine only bites where statutory language is ambiguous. Once the Administration finds a statute that explicitly says tariffs, Speaker 4: Right! Grant: that whole tool disappears. Maya: And Section 122 is already in court; the Court of International Trade struck it down May seventh, said a trade deficit is not the same as a balance of Speaker 3: payments. Maya: Balance of Payments Deficit under the 1974 Act Grant: Right, and here's the thing: the PIIE noted that both the House and Senate actually passed bills disapproving of the IEEPA tariffs. Congress has opinions; what it doesn't have is follow through. Maya: Exactly; courts block individual moves, Congress should be filling the gap, and they're just not. Grant: So, July twenty-fourth, Section 122 expires. Tariffs automatically. Does Congress act? Does the President pivot to Section 301 Maya: of the Trade Act, Grant: which has no rate cap and no time limit? Maya: Or Global Alert flag this—he lets it expire, declares a new emergency, restarts the one-hundred-fifty day clock, de facto perpetual tariff. Grant: Check or no check, Grant. Maya: Partial check. The doctrine held; the power didn't stop. Grant: Fragile check—one good statute away from no check at all. Maya: Okay, so that's a wrap on this one. And honestly, Maya, I keep coming back to that same-day pivot. Court rules in the morning, new tariffs signed by evening. That's the image that sticks. Grant: Right, and that's the whole episode in one moment. The ruling mattered. The constitutional line was real. But the administration treated it like a logistics problem, not a stop sign. Maya: Partial Check, that's where I landed. The court did its job. Congress is still watching from the bleachers. Grant: Playfully fragile Check for me; one statute away from square one. Maya: And that's why this stuff matters. If PowerCheck helped you understand how that actually works, share this episode with one person who'd care. Follow us wherever you listen. Drop a review if you want to help others find the show. Grant: We really appreciate you being here, Grant. Maya: Thanks, Maya. Same time next week, everyone.