Leibowitz on Trade: A boost for the rule of law?

This is an opinion column. The views in this article are those of an experienced trade attorney on issues of relevance to the steel market. They do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at smu@crugroup.com.

The courts have been in the news over the last week. Building on the rejection of the “reciprocal” tariffs in February by the Supreme Court, several other court decisions give renewed hope that the rule of law is making headway. (Recall the “reciprocal” tariffs are also knows as the International Emergency Economic Powers Act, or IEEPA, tariffs.)

Last week, the Court of International Trade (CIT) set back the cause of arbitrary tariffs to remake the international economic order by ruling that the Section 122 global tariffs, which were imposed in the wake of the Supreme Court’s IEEPA decision, were in turn invalid.

The court granted final judgment in favor of two private plaintiffs and one state plaintiff. A dissenting opinion by CIT Judge Timothy Stanceu would not have granted final judgment. Instead, it would have requested more briefing and argument from the parties to flesh out the meaning of “balance of payments” in Section 122. As to the president’s authority to impose tariffs under Section 122, none of the judges sided with him. These tariffs were scheduled to end in July. But their end may come more quickly.

In April, the Supreme Court issued another landmark (and controversial) opinion on the issue of the Voting Rights Act of 1965. In Louisiana v. Callais, the Court ruled that drawing congressional districts primarily considering race was a violation of the Equal Protection Clause of the US Constitution. Continuing a march away from race-based remedies, the Court said the district boundaries were invalid. And it interpreted the Voting Rights Act not to require “majority minority” districts.

Last Friday, in another case involving congressional districts, the Virginia Supreme Court ruled that the state constitutional amendment revising congressional district boundaries was invalid. The reason? Because the procedures mandated in the state Constitution were not followed. Specifically, any amendment adopted by the Virginia legislature must be passed twice, with a general election intervening. This assures that voters can respond to the first passage.

Unfortunately, the new map was passed on October 29, 2025, when early voting in the general election was already underway. The Court said this meant that the general election did not interevent between the two approvals of the amendment. The law is the law.

The lesson here is that courts look at all aspects of cases. Being “right” on policy questions is not enough. (I personally have serious doubts about the current gerrymandering frenzy as sound policy. But I have no doubt at all that the tariffs enacted by Trump 45, continued by Biden 46 and exacerbated by Trump 47 were not good policy.) You have to follow the rules, no matter how noble or important the goal might be.

In the Court of International Trade, the court did the best job it could to parse the words of Section 122. This is what courts do. The majority decided that “balance of payments” is not synonymous with “trade deficit.” The administration disagrees. And it has already appealed to the Federal Circuit.

The administration will surely ask for a stay of the Court of International Trade ruling. Why? To allow the Section 122 tariffs to continue to be collected until the legal case is finally decided, probably by the Supreme Court (or until they expire on July 20). If the appellate courts agree with the Court of International Trade, importers may need to file refund suits. Good times for Customs experts.

It is notable that the court did not issue a nationwide injunction in the Section 122 case, as it did in the IEEPA tariffs case. Under Section 122 law, an importer who paid tariffs must file suit to be sure of a refund. And a US purchaser that was not the importer of record may not have standing to sue, as the attorneys general of 23 plaintiff states learned on Thursday. The rule of law matters, and the requirements to obtain a refund must be followed.

The Virginia case presents another lesson in this: no matter how urgent or important the goal is, you must follow the rules of the game. They are there for a reason. While the Democrats controlling the Virginia legislature may have thought that the Supreme Court would not strike down the vote of the people by striking down the amendment, they found that the procedural flaws in the adoption of the amendment could not be ignored.

Similarly, the president’s desire to employ tariffs and the threat of tariffs to remake the global economic order is of great importance. He needs to obey the rules prescribed by Congress. He does not possess the absolute authority to interpret these rules as he sees fit. As Chief Justice John Marshall said 223 years ago in Marbury v. Madison, “It is emphatically the province and duty of the judicial department to say what the law is.”

Someone in our system must do it. And it must be someone other than the legislature that adopted a statute or the president who enforces it. Otherwise, the rest of us would be helpless to protect our rights. Unless we want to settle these disputes in the streets, courts must be available to protect us from the other two branches of government.

There are more examples from the past few months that we could mention. There will be more cases coming in the next few weeks dealing with other important issues. These cases show that our system is still vibrant against even the strongest pressure.