This TaxProf Blog Op-Ed on Learning Resources is by Doron Narotzki (Akron; Google Scholar):

Learning Resources and the Limits of Emergency Tariffs

Doron Narotzki

The Supreme Court’s decision in Learning Resources, Inc. v. Trump[1] is best understood not as a trade case, but as a power-of-the-purse case. The Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, a categorical conclusion grounded in the Court’s recognition that tariffs are “a branch of the taxing power,”[2] which the Constitution vests in Congress.

The dispute focused on two words, “regulate” and “importation”: the administration argued that authority to “regulate . . . importation” included authority to impose tariffs, but the Court rejected that reading, concluding that those words “cannot bear such weight.”[3] The Court reaches its result through the statute’s text and structure, recognizing that Congress knows how to delegate tariff authority explicitly by using terms like “duty” and imposing caps, time limits, and procedural prerequisites. It did not do so in IEEPA, and reading “regulate” to include taxation would also create a constitutional problem because IEEPA covers exportation as well and export taxes are forbidden.[4]

Some commentators defend the administration’s position on a simple premise: because tariffs are tools of commercial regulation, authority to “regulate . . . importation” should include authority to impose tariffs. It is true that tariffs can be used to influence trade flows and shape commercial behavior, yet that reasoning goes too far because taxes can also regulate behavior, from sin taxes that shape consumption to carbon taxes that shape emissions. This logic still fails because Congress’s choice to regulate does not silently hand over the taxing tool, and the Constitution treats taxation as distinct because it reaches directly into the pockets of the people, which is why the Court was right to insist that the regulatory and taxing powers remain separate. Put simply, overlap in what a policy can accomplish does not erase the line between who is authorized to do it.

That separation is not just a constitutional formality; it shapes how tariff policy is made and how businesses and markets price the risk of sudden change, which is why the exercise of tariff authority affects not only who decides but how markets respond. In a related article, I develop the concept of “shadow tariffs,”[5] meaning tariff-like burdens created by executive volatility rather than durable border collection. When an administration repeatedly announces and then delays, conditions, escalates, and reverses tariffs, it changes expected trade costs, and firms respond ex ante by repricing contracts, pulling forward inventory, investing in compliance and origin planning, and delaying capital expenditures, with real costs that remain even if the threatened tariff is later withdrawn.

The Court’s own decision describes rapid changes and escalation, with tariff rates raised and adjusted in quick succession, including sharp increases on Chinese goods within days.[6] That volatility carries economic consequences. When tariff policy moves that fast, firms do not wait for rates to settle before responding; they price the risk of sudden change, shift shipment timing, and delay commitments. Over the past year, tariff threats were often floated amid diplomatic or political disputes and then revised or paused, and the key point is that costs are incurred during the threat period itself, even if the legal question is simply whether the President had statutory authority. A threatened tariff is not just a bargaining chip in a trade negotiation. Once it becomes credible, it changes expected costs, and firms do not wait for formal collection before adjusting; they hedge risk, absorb compliance expenses, and in some cases duplicate supply chains. By the time a tariff is narrowed or suspended, many of those costs are already sunk, which means the threat itself can function like a shadow tariff even if little or no revenue is ultimately collected.

This is where the Court’s reasoning may carry economic consequences. By insisting that tariffs are taxes and that taxation requires clear congressional authorization, the Court restores a measure of institutional constraint. Legislation moves more slowly and requires political agreement and public accountability. That slower process reduces the cycle of rapid threats and reversals and limits the use of volatility itself as a policy tool.

Furthermore, as tax scholars know and senior members of the administration have acknowledged, the Court’s decision does not eliminate tariffs; it only limits their use under IEEPA. Congress still holds full constitutional authority to impose duties. If the administration wants broad tariffs, it can turn to other statutory tools, such as Section 122 of the Trade Act of 1974,[7] or it can do what the constitutional design contemplates and ask Congress to pass new legislation.

In the modern trade era,[8] the closest parallel to a sweeping legislative tariff regime is the Smoot-Hawley Tariff Act of 1930. Unlike the recent emergency-based approach, it was enacted through ordinary legislation. Whatever its economic merits, it reflected Congress exercising its taxing authority openly and accepting the political consequences of that choice. If the current administration seeks a similarly broad tariff framework, it should persuade Congress to authorize it. That distinction is not trivial. Legislative tariffs are politically owned, debated, amended, and subject to electoral accountability, whereas emergency-based tariffs can be announced and revised at executive speed, magnifying volatility rather than embedding constraint.

Some will view Learning Resources as judicial interference in trade policy or even executive authority, but I will argue that a better description is constitutional clarification. The Court did not say tariffs are illegitimate. It said that if tariffs are to be imposed, they must rest on clear congressional authorization, and that insistence on clarity protects not only institutional boundaries, but economic expectations.

When the boundary between regulation and taxation blurs, economic burdens migrate into the shadows. Volatility itself becomes a quasi-fiscal instrument. By restoring the distinction between regulating commerce and taxing imports, the Court limits the executive’s ability to generate tariff-like burdens through threat cycles. Whether Congress now chooses to exercise its tariff power, and on what terms, remains a political question. After Learning Resources, that question returns to where the Constitution placed it: the legislative branch.

Other TaxProf Blog Op-Eds in this series:

• TaxProf Op-Ed: Saito on Major Questions, Learning Resources, and the End of Tax Regulation (Feb. 28, 2026)
• TaxProf Op-Ed: Morse, Oei & Ring on Learning Resources as a Statutory Interpretation Decision (Feb. 27, 2026)
• TaxProf Op-Ed: Appleby on the State Tax Implications of Learning Resources (Feb. 26, 2026)
• TaxProf Op-Ed: Clarke on Justice Gorsuch’s Learning Resources Concurrence (Feb. 25, 2026)
• TaxProf Op-Ed: Endean on Delegations of the Taxing Power (Feb. 24, 2026)
• TaxProf Op-Ed: Avi-Yonah on Learning Resources and Regulatory Taxation (Feb. 23, 2026)
• The Supreme Court Strikes Down Trump’s IEEPA Tariffs (Feb. 21, 2026)

[1] Learning Res., Inc. v. Trump, Nos. 24-1287 & 25-250, slip op. (U.S. Feb. 20, 2026).

[2] Id. at 6 (citing Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 201 (1824)).

[3] Id. at 5.

[4] Id. at 4.

[5] Doron Narotzki, Shadow Tariffs and the Executive Volatility Regime, Wash. U. L. Rev. Online (forthcoming 2026).

[6] Learning Res., slip op. at 3.

[7] The White House, Fact Sheet: President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payment Problems (Feb. 20, 2026), https://www.whitehouse.gov/fact-sheets/2026/02/fact-sheet-president-donald-j-trump-imposes-a-temporary-import-duty-to-address-fundamental-international-payment-problems/.

[8] Comprehensive legislative tariff regimes were common in the nineteenth century. See, e.g., Tariff of 1828 (Tariff of Abominations), ch. 55, 4 Stat. 270; Morrill Tariff, ch. 68, 12 Stat. 178 (1861); Tariff Act of 1890 (McKinley Tariff), ch. 1244, 26 Stat. 567; Tariff Act of 1897 (Dingley Tariff), ch. 11, 30 Stat. 151. The modern trade framework shifted after the Reciprocal Trade Agreements Act of 1934, ch. 474, 48 Stat. 943.