Last July, President Donald Trump imposed 50 percent tariffs on various Canadian goods, a list he subsequently expanded to include additional imports, some of which he banned outright. His legal justification was Section 338 of the Smoot-Hawley Tariff Act, which Congress approved in 1930. Section 338 authorized tariffs in response to discriminatory trade practices. But in the 96 years since it was enacted, no president had ever used it to impose tariffs.

Why is that? According to a lawsuit that the Liberty Justice Center (LJC) filed on Tuesday in the U.S. Court of International Trade (CIT), the answer is clear: Section 338 was superseded by subsequent legislation that likewise targeted discriminatory trade barriers, beginning with the Reciprocal Trade Agreements Act of 1934 and culminating in Section 301 of the Trade Act of 1974. Section 301, the current remedy, includes requirements that Trump apparently sought to dodge by invoking Section 338 instead.

That maneuver is illegal, the LJC argues. "Congress already gave the executive branch a tool for responding to unfair foreign trade practices: Section 301, which requires an investigation, public comment and other safeguards," says Jeffrey M. Schwab, the LJC's director of litigation. "The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff."

Why not? "Where provisions in two acts are in irreconcilable conflict, the later act, to the extent of the conflict, constitutes an implied repeal of the earlier one," the lawsuit says. "Where a later act covers the whole subject of an earlier one and is clearly intended as a substitute, it operates similarly as a repeal. And a specific policy embodied in a later federal statute controls the construction of an earlier one even absent express amendment."

Even if Section 338 somehow survived congressional approval of contrary laws, the LJC adds, Trump's tariffs exceed the authority it grants. And if Trump's interpretation of Section 338 were correct, the lawsuit says, the provision would violate the nondelegation doctrine, which bars Congress from delegating its tariff power to the president without providing "an intelligible principle" to guide and constrain his exercise of it.

Trump's Section 338 tariffs, in short, are "the Administration's latest attempt to exercise, through a statute never designed for the purpose, the tariff power that the Constitution assigns to Congress." That pattern should be familiar by now.

Shortly after taking office in 2025, Trump claimed to have discovered a previously unnoticed delegation of extensive tariff authority in the International Emergency Economic Powers Act (IEEPA), a 1977 law that does not mention import taxes and had never been used to impose them. That claim was rejected by every court that considered it, and last February the Supreme Court ruled that IEEPA does not authorize tariffs at all.

Trump responded to that decision by immediately announcing similarly broad tariffs under Section 122 of the 1974 Trade Act, which addresses "fundamental international payments problems" caused by "serious United States balance-of-payments deficits." In May, the CIT ruled that the new tariffs were illegal because Trump had failed to "identify balance-of-payments deficits within the meaning of Section 122."

Trump then switched to Plan C, invoking Section 301 of the Trade Act, which authorizes tariffs in response to a foreign "act, policy, or practice" that is "unreasonable or discriminatory" and "burdens or restricts" U.S. commerce. He claimed that provision justified tariffs on 86 trading partners, accounting for nearly all U.S. imports, because they had failed to "impose and effectively enforce a prohibition on the importation of goods produced with forced labor." The CIT is currently weighing challenges to those tariffs, including an LJC lawsuit.

Trump's Section 338 tariffs have now added to the CIT's caseload. The LJC represents Gellert Global Group, an importer that was hit hard by those taxes after Trump added cheese to the list of disfavored Canadian goods. The lawsuit asks the CIT to certify a class of importers, numbering in "the hundreds, if not the thousands," that likewise have been clobbered by Trump's 50 percent tariffs.

Since Trump obviously is aware of Section 301, why did he resort to a never-used, seemingly obsolete provision to justify the tariffs on imports from Canada? As the LJC notes, Section 301 requires an investigation by the Office of the U.S. Trade Representative, "consultation with the foreign country concerned, notice, public comment, a hearing, and determinations within statutory deadlines." It also requires "that action be equivalent in value to the burden imposed, that duties be preferred over other import restrictions, and that actions terminate after four years absent a request for continuation and review."

Can Trump avoid those constraints by invoking Section 338 instead? The LJC thinks not: "Congress did not intend to leave in place a parallel authority that would allow the President to impose the same remedies, for the same conduct, free of every one of those safeguards."

Section 338 has been "impliedly repealed," the LJC argues. "At a minimum, Section 301 controls where, as here, the President seeks to respond to foreign practices within Section 301's scope, and the President may not impose duties in response to such practices while disregarding the procedures and limits Section 301 imposes. Because the President did not proceed under Section 301, the Section 338 Tariffs are unlawful whether or not Section 338 survives."

Even if you ignore subsequent legislation, the LJC argues, the Canadian policies that Trump cited when he announced the tariffs do not qualify as "discrimination" under Section 338. "Canada's motor vehicle surtax and its provinces' alcohol purchasing decisions are responses to tariffs that the United States imposed on Canada, not discrimination by Canada against the United States," it says. Trump also complained that Canada treats European cheese imports more favorably than U.S. cheese imports. But "when Congress enacted Section 338, a preference granted under a reciprocal agreement was not 'discrimination.'"

Section 338 "addresses discrimination: measures that single out United States commerce for worse treatment than the commerce of the world at large," the lawsuit says. "It is not a general authorization to impose tariffs whenever the President disagrees with a trading partner's policies, or whenever a trading partner responds to tariffs the United States has imposed on it."

Trump also was unfazed by Section 338's requirement that the president set duties to "offset" the costs imposed by discriminatory practices, which implies proportionality. Rather than attempt that, the LJC notes, Trump imposed "the statutory maximum rate of 50 percent without tying it to any measured burden."

As interpreted by Trump, the lawsuit warns, Section 338 authorizes the president to "impose tariffs of up to 50 percent on any products of any country that extends better treatment to any other country in any respect—including through any of the hundreds of preferential trade agreements to which the United States is not a party—or that responds to tariffs the United States has imposed on it." Yet Section 338 "contains no clear statement authorizing that power," contrary to the "major questions" doctrine, which applies to assertions of executive authority with "vast economic and political significance."

If Section 338 conferred the sort of unfettered authority that Trump is claiming, the LJC says, it "would supply no intelligible principle constraining the exercise of Congress's power to lay duties." His reading "would convert a narrow, fact-dependent provision into an effectively unrestricted delegation of Congress's tariff power," which would be "an unconstitutional delegation of legislative power."

This case "is not about the president," says LJC CEO Sara Albrecht. "It is about the presidency. No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required."

The post Trump's 50% Tariffs on Canadian Goods Illegally Rely on a Superseded Statute, a Lawsuit Argues appeared first on Reason Magazine.

Vice President J.D. Vance—who is heading the Trump administration's efforts to eradicate fraud—has set his sights on another alleged form of wasteful spending. 

Last week, Vance announced a probe into nine universities over alleged J-1 visa fraud as part of the Trump administration's broader crackdown on foreign worker programs. Vance's central complaint is that the named universities—which include Harvard, Stanford, and the Massachusetts Institute of Technology—are "employing J-1 visas for federally funded grants at a rate of about 61 percent" compared to the "national average of just 38 percent." 

"Something weird is going on at these universities," Vance added. "They're using these visas way too much. They're using them to undercut the wages of American grad students and American researchers, and it simply has to stop." Naturally, he figured that this warranted a fraud investigation.

Labor Department Inspector General Anthony D'Esposito, who is leading the investigation, had some harsh words for universities. "Improperly used J-1 visa classifications to avoid employment obligations, exploit taxpayer-funded programs, and undermine American workers will not be tolerated." He said, "I don't care how prestigious a university thinks it is. Break the law and screw the American people, and I will personally cuff you in the university square." He also raised concerns that universities were exposing American research to foreign adversaries, specifically China.

The press conference sounded more like an indictment of the J-1 program than of fraud. Unlike the H-1B visa—which allows employers to sponsor high-skilled foreign workers—the J-1 is more like an exchange program than a dedicated work visa; it doesn't require employers to pay the prevailing wage or visa holders to pay Social Security or Medicaid taxes within the first two years. Universities using the program to hire cheaper foreign labor is simply a feature of the program.

The real picture is much muddier than Vance cited figures suggest. The inspector general's announcement states that "approximately 61 percent of postdoctoral workers and researchers supported by federal grants at the nine universities are foreign nationals, compared to 38 percent at other universities." Foreign nationals could include H-1B holders and other visa categories, not just J-1s as Vance claimed. Additionally, the 38 percent figure comes from unspecified "other universities," rather than the national average.

D'Esposito had a fiery tone, but neither he nor Vance pointed to a single instance of a university breaking the rules. Their evidence is merely a statistic showing these schools, which are elite research institutions, hire a lot of foreign researchers. Vance's primary objection isn't that these universities have broken the law; it's that they are hiring foreigners instead of Americans, undermining his protectionist agenda.

Opposition to visa programs is, unfortunately, found on both the left and the right. In his first term, President Donald Trump enacted a slew of restrictions that complicated the H-1B visa application process and increased denial rates to 24 percent in FY 2018 (up from 6 percent in FY 2015).  In 2020, the administration was forced to rescind key policies behind those rising denials after a federal judge ruled they hadn't followed the required rulemaking process. In September last year, Trump imposed a $100,000 fee on H-1B petitions. A federal judge struck it down in June, saying it exceeds the president's authority and violates the separation of powers.

Other presidents have used federal power as leverage against higher education. But Trump's war on universities—including the freezing of federal funds for universities like Columbia and Harvard for alleged instances of antisemitism—is mostly unprecedented. These actions are indicative of a more enduring problem: Federal dollars come with federal influence, and as long as universities depend on federal funding, they will remain at Washington's mercy. If universities want lasting independence, the answer isn't to reduce their use of the J-1 visa. It's to get off the federal teat altogether.

The post No, Giving Immigrants Research Jobs Is Not Fraud​ appeared first on Reason Magazine.