What is "Neoliberalism" anyway?

A viral video by young lawyer Riana Te Ngahue is doing the rounds purporting to explain (for her aunties) something called Neoliberalism.

'A' for effort. 'F' for content. As libertarian Alberto Mingardi observes, very few who use the term have actually taken the time to define it correctly and to trace back its origins. She does take the time, but just like the folk she notes in her video (Tamitha Paul, Chloe Swarbrick, et al) Ms Te Ngahue fails to either define or understand where it came from. 

To be fair, it's not clear. Neoliberalism is like "trickle-down" in economics, or "austerity" in political economy: a term used almost exclusively by critics to characterise and critique a whole ill-defined whole cluster of policies and people, none of whom actually exist. (Take a look at Phil Magness for example explaining 'Why I Am Not a Neoliberal.') "Capitalism" of course was famously one of those words too -- used initially by French socialist Louis Blanc and anarchist Pierre-Joseph Proudhon -- before being taken up by capitalism's supporters. A bit like "queer."

But (apart from Scott Sumner, who thinks it's "awesome") there's no sign of that happening with "neoliberalism."

As Jeffrey Tucker explained way back in 2016, "We need a fix on what this term means. Is there a founding thinker, book, or meeting?" Or, in other words:

What is "Neoliberalism" anyway?

by Jeffrey Tucker

The term “neoliberalism” is being flung around everywhere these days, usually with a haughty sense of “everyone knows what this is.” But do we really? You may think you know, but there’s very little agreement among everyone else.

Is there a founding thinker, book, or meeting? The most common search phrases on Google are these: “definition neoliberalism,” “what is neoliberalism,” and “define neoliberalism.”

The confusion is understandable. Sometimes the term is used approvingly by the mainstream press, as for example to describe France’s Emmanuel Macron. Or Javier Milei. (As if there were much in common between the two.)

More often the term is used as a pejorative by the far left and the alt-right. Here it is said with a sneer to be a synonym for capitalism, globalism, elite rule, ruling-class privilege, and the administrative state.

It's true that there's more doubt around these days about cradle-to-grave government.

What are the reasons for this change?

First, there is the rather obvious fact that government management has failed to live up to its promise. People are far more likely to dread than appreciate any real-world contact with the state. Where would you rather be: the DMV or McDonald’s? The school-district office or a local bar? A military base or a car plant? The courthouse or the shopping mall? Want to deal with a government cop or a private security guard?

Second, private enterprise has turned out to produce far more amazing improvements in our lives; health, prosperity, education, transportation, security, and all the other “commanding heights” of life have been well-served by innovation stemming from entrepreneurship and commercial exchange. Pick your example, but a favourite one is how much transportation alone has improved with ride-sharing technology.

Third, a quiet intellectual revolution has been taking place in the postwar period, with generations of outstanding scholars having rediscovered, then improved, then propagated the insights of classical economics. To be sure, it is now conventional wisdom on the Left that this “neoliberal” intellectual shift is a result of an elite conspiracy dreamed up by billionaires and pushed by well-funded institutions and public intellectuals.

But there is a simpler explanation: the ideas of classical liberalism explain the world better than any alternative. Whether the intellectual change is the prime cause of the shift or incidental to it is unknowable. But this much is true: the shift in ideas is both real and necessary for a change in the paradigm.

Still, a classical liberal is not a neoliberal. We need a firmer fix on what this term "neoliberal" means. Is there a founding thinker, book, or meeting?

Liberalism Needed a Champion

The answer is yes. The thinker is the American journalist Walter Lippmann (1889-1974). He is often called the founder of modern American journalism. Also, if any writer/thinker can be called the founding father of neoliberalism, it is he. His life and times roughly overlap with both Mises and Hayek, the twentieth century’s two most prominent proponents of the classical idea of liberalism. Unlike Lippmann, there was nothing particularly “neo” about either of them. 

In fact, Mises himself had already written the definitive book to champion liberalism in the classical form in 1929. But it was published in Austria, in German. Lippman, as a New Yorker, would never have seen it.

Lippmann was not a professor, though he had an elite education and his brilliance was unmistakable. He was one of the most famous public intellectuals of his time, and a paragon of what was called liberalism in the Progressive Era and through the New Deal. As a founding editor of the New Republic, he was a defender of civil liberties, a proponent of peace, and opponent of socialism and fascism. No one would call him a dissident intellectual but he did resist the totalitarian winds of his time.

The Ideological Crisis

In the interwar period, this class of intellectuals had a sincere concern for the preservation of all the gains of liberty in the past, and sought to find a way to protect them in the future. The situation they faced was grim both in the United States and Europe. Two main extremist factions were struggling for control: the communists/socialists and the fascists/Nazis, which, Lippman realised, were two sides of the same authoritarian coin. The New Deal seemed to be borrowing from both while trying to hold on to certain liberal ideals. It was an unstable mix.

Where was the opposition? In Europe, the U.S., and the U.K, there was also a rise of what might be generally called Toryism or conservatism (or, in the American South, agrarianism). This was not a positive program but rather a reactionary or revanchist pose, a longing for the order of days gone by. In Europe, there were waves of nostalgia for the old monarchies and, with it, the desire to roll back the legitimate gains of liberalism in the 19th century. And with this pose comes a series of demands that are absolutely incompatible with modern life and contemporary human aspirations. 

Lippman knew that some form of liberalism had to be the way forward. But not the old liberalism, which he believed had failed (it led to economic depression and social instability, in his view). His goal was a renovated liberalism. He never used the term neoliberalism (that was invented by a colleague), but that is what it came to be called.

The Good Society

Lippmann’s great book – and it truly is a great book and very much worth a read – appeared in 1937: The Good Society. The book celebrated liberalism and thus rejected socialism, fascism, and Toryism. However, it also rejected laissez faire with equal passion, although you have to get pretty deep into the book to discover this. Lippmann had very casually accepted the bulk of the Keynesian criticism of free markets. He tried to thread the needle: opposing statism, loving liberty, but innovating what he regarded as liberal ends through quasi-statist means.

The book made such an impact that it inspired the calling of a hugely important scholarly colloquium held in Paris in August 1938, in the midst of a growing conflict in Europe and the world. Six months later came the German annexation of Austria, and one year before the Nazi invasion of Poland. These were extremely volatile times, and these intellectuals believed they had a responsibility to do something about righting what was going wrong in the world.

The “Walter Lippmann Colloquium” was organized by French liberal philosopher and logical positivist Louis Rougier. It was attended by Lippmann, and included several other leading French intellectuals, including the great monetary theorist Jacques Rueff. Also in attendance Michael Polanyi from the UK, as well as Germans Wilhelm Röpke and Alexander Rüstow. Most notably Friedrich Hayek came from London, and Ludwig von Mises arrived from Geneva where he was then living in sanctuary after having fled the Nazi invasion of Vienna. 

In short, this was a high-powered group, consisting of the world’s most important liberal intellectuals in the year 1938. It was at this event that Alexander Rüstow coined the term "neoliberalism" to label what they favoured. It was intended to apply only to Lippmann’s vision.

Hayek: neither neoliberal, nor conservative

Again, this was a new way of thinking about liberalism. It was democratic, tolerated a wide degree of regulation, plus welfare states, public education, and public provision of healthcare and infrastructure. But it maintained the core competitive processes of the market economy. The hope was to come up with some stable mix of policies that would lead to rising prosperity and bring about a general public contentment with the social order such that the demand for extremist ideologies like fascism and socialism would be kept at bay. The rising progress and demand for new technologies among the public would similarly outcompete revanchist and conservative sentiments in the political marketplace.

That was the hope in any case. I’m not aware of a report of precisely what took place in this Colloquium but one can imagine that both Mises and Hayek were alternatively pleased and unhappy about being pressed to agree with this view.

Hayek was emerging as the main opponent to John Maynard Keynes, while the other participants had made their peace with Keynes. For his part, Mises held the view that any mixture of state management into the market mix only diminishes the individual’s range of choice, slows economic growth, and introduces distortions that cry out for some political fix at a later date. Neither were believers in the great new Lippmann/Rüstow vision.

The Ur Text

To really understand this vision, let’s take a look at Lippmann’s treatise. It is not shabby. In fact, it is an excellent tutorial in the history of liberty. If only it had stuck with that. Still, the rhetoric is powerful and inspiring. You get a flavour from this passage:

Everywhere the movements which bid for men’s allegiance are hostile to the movements in which men struggled to be free. The programmes of reform are everywhere at odds with the liberal tradition. Men are asked to choose between security and liberty. To improve their fortunes they are told that they must renounced their rights. To escape from want they must enter a prison. To regularise their work they must be regimented. To obtain great equality they must have less freedom. To have national solidarity they must oppress the dissenters. To enhance their dignity they must lick the boots of tyrants. To realize the promise of science they must destroy free inquiry. To promote the truth they must not let it be examined. The choices are intolerable. 

Absolutely wonderful! And for the most part, the book continues in this lovely spirit, enough to feed the soul of the most radical libertarian. You have to get pretty far into the book to discover the “neo” part of neoliberalism. He believed that “liberalism must seek to change laws and greatly to modify property and contract” in a way that rejects laissez faire, a term and a system he completely counterposes to his own.

Neoliberalism includes public provision of education, health care, environmental protection, financial regulation, fiscal policy management, monetary control, and more. In fact, “the purpose of liberal reform is to accommodate the social order to the new economy; that end can be achieved only by continual and far-reaching reform of the social order.”

What Lippmann wanted was a new constitution for a “free state.” What he was rejecting was a state that is neutral to social outcomes – the “nightwatchman state” that the old liberals believed in.

Whereas the original liberals wanted law to be stable and general, pursuing only the most limited functions, the neoliberal vision is of a state that is an active part of the guarding, maintaining, and promoting liberty itself, as understood by a particular vision of what should be. It asserted that liberalism is so important that it must be the primary goal of the state to see it realised. 

In practice, there are no limits to how far this can go.

As an example of a state neutral to outcomes, consider the US Constitution. It is a framework for government and law. It specifies what various branches can do and why, and spells out what they cannot do and why. It contains no great aspiration for how society should look (well, perhaps the “general welfare” clause might apply) but mostly sticks to creating a framework and letting the people take it from there.

Neoliberalism instead wants a living state that is not only adaptive but even aspirational. It should take an active role in the lives of people with the expressed purpose of helping them live freer, flourishing, more fulfilling lives. The state must never lord it over the population but rather be the people’s partner in building prosperity and living out the promise of liberalism.

Where Lippmann Goes Wrong

All of this is interesting, but mostly fantasy. In his many chapters on the liberal state, Lippmann lays out all the ways in which his vision of an expansive state does not trend authoritarian. The official and the citizen are just people and there are no royal prerogatives. Bureaucracies aren’t issuing commands such much as behaving like publicly held corporations, always responsive to the public. There are all kind of intermediate institutions between the individual and the state. The public sector is humane, hospitable, adaptive, creative, and why? Because their power comes from the people, not the dictator or king.

All of this is interesting, but it is mostly fantasy.

Lippman, writing in 1938, was blind to important developments that took place in liberal theory, mostly in response to his vision.

The first is that crucial Hayekian point concerning epistemic humility. Lippmann writes as if he knows for sure how to achieve and judge social results that accord with his vision. It is a normal presumption of most intellectuals. Hayek’s innovation was to see that the knowledge necessary for the right ordering society is not accessible in whole to intellectuals and much less to presidents, legislators, or bureaucrats. It is deeply embedded in social processes themselves, and, in turn, in the minds of individuals making the choices that constitute the driving parts of that process.

The second point completely overlooked by Lippmann is that the players within the state itself have their own interests and designs, just as market actors do. They pursue their own interests. They seek to maximise their welfare. They look for more power, more funding, more prerogatives, and those they serve are the interest groups who can bring them more of it.

The idea that a public bureaucracy can be consistently much less permanently directly toward serving the genuine public interest is lacking in evidence. In other words, Lippman was blind to how the truths that would later be associated with the Public Choice school of economics might impact his vision of liberty.

A third problem is the one Mises identified: neoliberalism chooses the wrong means to realise its ends. Legislating higher wages does not actually raise wages; it throws people out of work. Regulating to protect the environment doesn’t end in doing so; it only devalues property which leaves it to be ravaged by irresponsible stewards. Instituting single-payer health care guts the sector of its signaling systems, its incentives for innovation, and its capacity to be rolled out to ever broader sectors of the population. And because intervention doesn’t achieve its stated ends, it becomes the pretext for ever more meddling in the market process.

These problems doom his system to be as much a fantasy as the authoritarian ideologies he opposed.

The Dangers of Neoliberalism

It was in response to Lippmann that both Hayek and Mises crafted many of their arguments over the coming years. Mises never stopped pointing out that laissez faire does not mean “let soulless forces operate,” as Lippmann seems to suggest. It means letting individuals make the choice over what kinds of lives they want to live, and let those choices drive forward the path of social evolution. Mises’s book Human Action was as much a response to Lippmann as it was to Keynes, Marx, and all the other anti-liberals.

Let’s just posit that we have a state that is determined to advance the cause of liberty – not a state neutral to outcomes but one directed at a certain end. Where will this lead us? It could lead to another form of top-down planning. It can result in practices such as social insurance schemes, heavy regulation in zoning and the environment, taxes and redistribution with the aim of bringing more effective liberty to ever more people. In an imperial state, it can lead to the imposition of planning on foreign nations: the IMF, the World Bank, the so-called Washington Consensus, and the United Nations Declaration on the Rights of Indigenous Peoples. 

It can be the excuse for wars for “spreading democracy” and nation building abroad.

You can say that all these policies are well intentioned. In fact, neoliberalism is the very embodiment of good intentions: we shall free all people! In the best case, neoliberalism gives us a post-war German economic miracle. But it could just easily land in Pinochet’s Chile, often cited as a neoliberal state. In foreign policy, neoliberalism can inspire beautiful reform (Japan after the war), or create a destructive terror state that seethes in resentment (see Libya, Iraq, and Afghanistan).

All of which is to say: the neoliberal can quickly become the anti-liberal state. There is no institutional reason why it would not be so. A state with a social mandate is a roaming beast: you might hope for it not to do bad things but you wouldn’t want to be alone with it in a dark alley.

To be sure, the world owes a debt to neoliberalism. It was this formulation that inspired many countries to liberalise their economies, and even been a reason for many of the loosening of controls in the United States. It led to the reforms in Latin America, China, and even Eastern Europe after the collapse of socialism. Neoliberal ideology is partially responsible for the liberation of billions of people from suffering, poverty, and tyranny.

The downside is also present: the continuation of colonialism by other means, the spread of global bureaucracy, the entrenchment of the welfare state, and the rise of deep-state control over culture, society, and the economy. It is also not politically stable. These institutions feed public resentment and fuel populist extremism, which is the very opposite of what Lippmann wanted. 

At the same time, genuine liberals (often called libertarians today) absolutely need to understand: we are not neoliberals. The great part about neoliberalism is the noun not the modifier. Its primary value is not in what it innovated but what it recaptured. To the extent that it diverges from the beautiful system of liberty itself, it can be the source of the opposite.

Neoliberalism Today

That the term is strewn throughout viral videos and public discourse today is a tribute to the power of an idea. This little seed planted in 1938 has grown into a massive global presence, mostly embodied in international bodies, public bureaucracies, political establishments, media voices, and pretexts for every manner of foreign, domestic, and global action. 

And what has been the result? Some good but a vast amount of highly conspicuous bad. Huge public sectors have held back economic growth. Large bureaucracies have compromised human freedom. It gave life to what is called "crony capitalism" today. Global control has bred nationalist blowback, while corporate monopoly has fed socialist longings.

We are again faced with the same problem today that confronted Lippmann in 1938. Everywhere there are ideologies that seek to put men in chains. We do need an alternative to socialism, fascism, and Toryism. We need to get it right this time. Let’s take the neo out of liberalism and accept nothing less than the real thing.

Freedom is not the correct implementation of a public policy plan. It is not the condition of appointing high-minded and intelligent social and economic managers. It is not the result of sound intentions from a fleet of ruling class intellectuals and major economic stakeholders.

Freedom exists when a people, an economy, and a culture, undirected and unmolested by administrative elites with power, are permitted to live and evolve in peace according to the principle of human choice in all areas of life.

* * * * * 

Jeffrey Tucker is the founder and president of the Brownstone Institute, organiser of the Great Barrington Declaration, and a former Director of Content for the Foundation for Economic Education, where his post first appeared. 

The *New* Trump Tariffs Are Also Unlawful

The CATO Institute's Ilya Somin had the idea that a lawsuit against most of the Tariffs in the second Trump administration could be successful, and got it off the ground -- sowing the seeds for one of the most significant rulings by the US Supreme Court in decades by declaring a president's central initiative to be unlawful.

But this US president doesn't care about your stupid laws, as CATO's Clark Packard & Alfredo Carrillo Obregon explain in this guest post...

The New Trump Tariffs Are Also Unlawful
By Clark Packard and Alfredo Carrillo Obregon

On February 20, the Supreme Court correctly struck down President Trump’s tariffs invoked pursuant to the International Emergency Economic Powers Act (IEEPA). The administration’s response was swift and naturally chaotic: it replaced the IEEPA tariffs with 10 percent duties imposed under Section 122 of the Trade Act of 1974, citing large trade deficits as justification. Like their predecessors, these new tariffs almost certainly violate the law.

What Section 122 Actually Says

Section 122 was enacted in the early 1970s, around the time the United States was transitioning away from the Bretton Woods system of fixed exchange rates. The statute authorises the president to impose temporary import tariffs of up to 15 percent—or other trade restrictions such as quotas—for up to 150 days (absent an affirmative congressional vote to extend them) in response to “situations of fundamental international payments problems.” The statute defines such circumstances as “large and serious United States balance-of-payments deficits and/​or circumstances” in which the dollar faces “imminent and significant depreciation.”

The administration now claims that invoking Section 122 is necessary to address the United States’ large trade deficit. But the trade deficit is not the balance of payments -- balance of trade is not balance of payments -- they are two distinctly different things -- and conflating the two represents a serious distortion of the statute’s plain terms. 

In fact, another provision in Section 122 authorises the president to enact temporary trade-liberalising measures to address “fundamental international payments” problems by dealing with “large and persistent United States balance-of-trade surpluses.” (Emphasis added.) It is therefore hard to imagine that Congress intended for the distinct concepts of the balance of payments, on one hand, and the balance of trade, on the other, to be used interchangeably. 

A Senate Finance Committee report on the Trade Act of 1974 provides further evidence that Congress understood the balance of payments to be distinct from the balance of trade.

The Economics Are Clear


The balance of payments summarises all the economic transactions between a country and the rest of the world. It has three components: the current account, the financial account (including reserve assets), and the capital account. 

The balance of trade is one component of the current account, which encompasses trade in goods and services, as well as investment income flows. When the US runs a current account deficit (as it does today), then capital inflows (i.e., the capital and financial accounts) will essentially offset it dollar-for-dollar. The opposite is also true, as the balance of payments will, in a floating-exchange system, equal zero (i.e., a current account surplus must be offset by capital outflows).

Under the earlier Bretton Woods fixed-exchange system by contrast, countries agreed to fix their currency values at a specific exchange rate relative to the US dollar, which was convertible to gold at a fixed rate of $35 an ounce. As foreigners holding inflating US dollars sought to convert them to gold however, the US used its official gold reserves to finance this imbalance and maintain the value of the dollar. Economist Phil Magness thus notes that a balance of payments “deficit” referred to a negative transaction balance in official reserves. Ultimately, the US “printed” too many dollars for other countries to remain confident in the system, and it broke down, giving way the floating exchange rate system that still exists today.

Milton Friedman actually proposed 'the float' as a solution to balance-of-payments problems in the 1960s: “a system of floating exchange rates eliminates the balance-of-payments problem […] the [currency] price may fluctuate, but there cannot be a deficit or a surplus threatening an exchange crisis.”

Fast forward to today, and as the Peterson Institute’s Kimberly Clausing and Maurice Obstfeld note, the United States’ floating exchange rate and large supply of attractive financial assets mean it can finance its large current account deficits. Gita Gopinath, a former senior official at the International Monetary Fund and current Harvard economics professor, concluded similarly on social media: “As long as there is plenty of demand for US debt and equities, which is the case, the US does not have a ‘payments’ problem. It can finance its trade deficits easily.” Indeed, though the US has the largest trade deficit in the world, it also enjoys the largest financial account surplus. 

Virtually no serious economist, therefore, believes the United States has a “large and serious balance-of-payments deficit.” Or an at all.

The Administration’s Own Lawyers Admitted It

Perhaps more damaging, the Trump administration’s own Department of Justice (DOJ) acknowledged that Section 122 does not apply to the current situation. During the IEEPA litigation at the Court of Appeals for the Federal Circuit, the DOJ’s reply brief noted that Section 122 has “no application [to the current situation], where the concerns the President identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.” Though the DOJ dropped this line of argument at the Supreme Court, the administration cannot credibly argue otherwise now. 

And for the reasons outlined above, it would prove difficult to demonstrate that Section 122 authorises tariffs to deal with trade deficits.

Courts Should Grant Injunctive Relief

The Trump administration likely invoked Section 122 precisely because it understands that a legal challenge is unlikely to be fully litigated in the 150 days permitted by the statute. Indeed, the administration has made clear that Section 122 will serve as a bridge authority as it readies Sections 301 and 232 tariffs to roughly recreate the tariff architecture it illegally established under IEEPA.

That said, the scope of such an injunction might be limited in light of the Supreme Court’s decision in Trump v. CASA, Inc. (2025), which led the Court of Appeals for the Federal Circuit to vacate and remand the universal injunction that the Court of International Trade granted in its initial decision on the IEEPA tariffs case. Overshadowing the prospect for injunctive relief, moreover, is the fact that protracted litigation is unlikely to be resolved before the 150-day mark when the Section 122 tariffs expire (assuming Congress does not vote to extend them).

The Bottom Line

Once again, the Trump administration has demonstrated no fidelity to the rule of law in pursuit of economically destructive protectionism. 

If the president wants the authority to impose these sweeping tariffs, the proper course is to go to Congress and ask for it. Given that 2026 is an election year and how deeply unpopular the tariffs have become, that seems unlikely. 

Instead, the administration will likely continue its pattern of legal improvisation—hoping to keep the Section 122 tariffs in place long enough to run out the 150-day clock while it works to roughly reconstruct the IEEPA tariff regime through Sections 301 and 232.

* * * * * 

Clark Packard is a research fellow in the Herbert A. Stiefel Center for Trade Policy Studies.
    Prior to joining the Cato Institute, Packard was a resident fellow at the R Street Institute, focusing on international trade policy. He previously worked at the National Taxpayers Union doing the same. Prior to those roles, he served as an attorney and policy adviser to two South Carolina governors. Earlier in his career, he spent three years in private legal practice.
    Packard is a contributor to Foreign Policy and has written for National Review, Lawfare, The Bulwark, Business Insider, The National Interest and other publications. He has appeared on a number of television and radio programs to discuss international trade policy.
    He is a graduate of the University of South Carolina School of Law.

Alfredo Carrillo Obregon is a Research Associate for trade policy at the Cato Institute. His work covers issues related to U.S. tariff policy and international trade relations, including U.S.-Mexico relations. Originally from Monterrey, Mexico, Carrillo Obregon earned his B.S. from Georgetown University.

    Their post originally appeared at the Cato Insitute blog. It has been edited for brevity.

    See also their related posts:

• The Supreme Court Got It Right on IEEPA—But Don’t Pop the Champagne Yet
• Trump’s Trade Policy Is Teaching Partners Washington Can’t Be Trusted
• Tariffs by Unpublished Memo: Lawsuit Exposes How Opaque Enforcement Compounds the US Tariff Complexity Problem
• Whom Should Farmers Believe: The President or Their Lying Eyes?

"The president is not a king, and is not entitled to practically unlimited power to impose tariffs. The Supreme Court was right to deny it to him."

"The ruling against Trump’s tariffs is a major victory for the constitutional separation of powers, rule of law, and millions of American consumers and businesses.

"In a 6–3 decision yesterday, the Supreme Court rightly ruled that, under the International Emergency Economic Powers Act of 1977, the president does not have the power to 'impose tariffs on imports from any country, of any product, at any rate, for any amount of time.' The ruling is a major victory for the constitutional separation of powers, rule of law, and millions of American consumers and businesses harmed by these tariffs.

"This decision spared America from a dangerous, unconstitutional path. Under President Trump’s interpretation of the law, the president would have had nearly unlimited tariff authority, similar to that of an absolute monarch. That undermines basic constitutional principles. The Framers of the Constitution had sought to ensure that the president would not be able to repeat the abuses of English kings, who imposed taxes without legislative authorisation. ...

"In addition to upholding the separation of powers, the decision is a victory for the rule of law, which requires that major legal rules be clearly established by legislation, not subject to the whims of one person. Since first imposing the Liberation Day tariffs, Trump has repeatedly suspended and reimposed various elements of them. He has also imposed or threatened to impose IEEPA tariffs for a variety of other purposes, such as countering the supposed threat of foreign-made movies, punishing Brazil for prosecuting its former president for attempting to launch a coup to stay in power after losing an election, and most recently castigating eight European nations opposed to his plan to seize Greenland. Such gyrations undermine the stable legal environment essential for businesses, consumers, and investors, and create endless opportunities to reward cronies and punish political adversaries ...

"The administration may try to reimpose many of the tariffs using other statutes, such as Section 232 and Section 301. But those laws have various constraintsthat would make it hard for the president to simply impose unlimited tariffs, as he could have done under his interpretation of IEEPA. As Chief Justice Roberts noted in his opinion yesterday, “When Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits,” and these others statutes all have limitations on the amount and duration of the tariffs they authorize, plus “demanding procedural prerequisites.” If Trump or a future president does claim that those other statutes give him unlimited power, tariffs imposed based on any such theory would themselves be subject to legal challenges. Yesterday’s decision signals that a majority of the Court is seriously skeptical of claims of sweeping executive tariff authority.

"Following the release of the Court’s decision, Trump announced his intention to use Section 122 of the Trade Act of 1974 to impose 10 percent global tariffs. But Section 122 authorizes tariffs only in response to 'fundamental international payments problems” that cause 'large and serious United States balance-of-payments deficits' (which are not the same as trade deficits used to justify the IEEPA Liberation Day tariffs), or “an imminent or significant depreciation of the dollar,' or if they are needed to cooperate with other countries in addressing an 'international balance-of-payments disequilibrium.' And Section 122 tariffs can remain in force for only up to 150 days, unless extended by Congress.

"The president is not a king, and is not entitled to practically unlimited power to impose tariffs. The Supreme Court was right to deny it to him."

~ co-litigant Ilya Somin on 'How the Supreme Court Spared America'

REUTERS: ''Embarrassment to their families': Trump denounces Supreme Court justices after tariffs ruling'
WASHINGTON, Feb 20 (Reuters) - President Donald Trump lashed out on Friday at the U.S. Supreme Court and the six justices who struck down his signature global tariffs - including two he appointed - in remarkably personal terms while hailing the three justices who backed him.
"Although previous presidents have sharply criticised Supreme Court rulings against them, Trump's lengthy tirade to reporters at the White House stood out for its contemptuous tone, as well as the personal nature of his scorn and praise...."

 

"Today’s ruling reinforces a basic constitutional principle: emergency powers are not a blank check for economic policymaking. The Court correctly recognized that tariffs function as taxes on Americans, and that authority belongs to Congress, not the executive acting alone under a perpetual state of emergency. Despite dire warnings, there was never going to be a financial crisis if these tariffs were struck down.
    "Ending the IEEPA tariffs restores predictability and reduces the uncertainty that has weighed on investment and supply chains. Businesses and consumers now get a reprieve from a costly policy mistake. Far from leaving the United States defenceless, the decision strengthens the institutional credibility that matters most when real emergencies arise."

~ Kyle Handley, Cato Adjunct Trade Scholar

"I rise today to address [Supreme Court Justice] Neil Gorsuch's concurrence.
    "The dude stuck a big red hot poker into the nether regions of no fewer than SIX of his colleagues.
    "For Kagan, Sotomayor, and Jackson (I’m paraphrasing, and tendentiously so, but it’s more fun): “You folks supported every cockamamie ‘emergency’ theory the Dems could come up. You gave the Biden administration clearly unconstitutional and unjustified powers during COVID, and you accepted a definition of ‘emergency’ so encompassing that the US has apparently been in an ‘emergency’ since before the Declaration of Independence. Now that a Republican is office, you have belatedly discovered that an declaration of an emergency is more plausible if there is actually some emergency. You people are clowns, and you should be embarrassed.” (Remember, these three are Justices that Gorsuch is JOINING, in his opinion; they are on his side!)
    "For Alito, Kavanaugh, and Thomas (again, I’m not quoting, not even close): “You folks opposed very action the Biden administration tried to take. Sure, the Bidenites claimed excessive powers. But COVID was at least plausibly an emergency, with both an urgent timeline and potentially dangerous outcomes. Yet you still had this very restrictive doctrine you kept parroting, about how the President can’t do things. That meant that you were basically playing “Calvinball,” with made up rules for why Democrats can’t do things. And now you say none of those rules (some of which were admittedly dumb) don’t apply when a Republicanis in office? And when there is no conceivable justification for invoking an emergency? You people are clowns, and you should be embarrassed.” (In fairness to Gorsuch, Kavanaugh in particular wrote an opinion so bizarrely self-contradictory that anyone would have had this reaction privately. But to put it in your concurrence? Damn!)
    "UPDATE: An afterthought: IEEPA was passed with a 'legislative veto.' Whatever else is true, the implied delegation was much less than Kavanaugh is claiming in his nonsensical screed."

~ Michael Munger from his post 'Gorsuch! A concurrence for the ages'

"Today the Supreme Court did something simple and radical at the same time: it read and applied the Constitution. In Learning Resources, Inc. v. Trump, the Court held that the International Emergency Economic Powers Act (IEEPA) does not authorise a President to impose tariffs. Article I vests the taxing power—explicitly including duties and tariffs—in Congress alone. The Executive has no inherent peacetime authority to reach into “the pockets of the people.” If Congress wishes to delegate tariff authority, it must do so clearly and within limits, because that is the structure of our constitutional republic.
    "This ruling is not about whether tariffs are good policy. It is about who has the lawful authority to impose them. The Court reaffirmed a basic principle: the power to tax belongs to the legislature, and it cannot be assumed, implied, or creatively inferred by the Executive. If we are to remain a government of laws rather than men, structural limits must bind even when they are inconvenient. Today, thankfully, the Court enforced that boundary." 

~ Nicholas Provenzo

"The court’s decision is welcome news for American importers, the United States economy, and the rule of law, but there’s much more work to be done. Most immediately, the federal government must refund the tens of billions of dollars in customs duties that it illegally collected from American companies pursuant to an “IEEPA tariff authority” it never actually had. That refund process could be easy, but it appears more likely that more litigation and paperwork will be required – a particularly unfair burden for smaller importers that lack the resources to litigate tariff refund claims, yet never did anything wrong.
    "Even without IEEPA, moreover, other U.S. laws and the Trump administration’s repeated promises all but ensure that much higher tariffs will remain the norm, damaging the economy and foreign relations in the process. Implementing new tariff protection will take a little longer than it did in 2025 and, perhaps, will be a little more predictable. Overall, however, the tariff beatings will continue until Congress reclaims some of its constitutional authority over U.S. trade policy and checks the administration’s worst tariff impulses." 

~ Scott Lincicome, Cato Vice President of General Economics and Cato’s Herbert A. Stiefel Center for Trade Policy Studies

"This expansive use of presidential 'emergency' powers to

impose taxes without representation would have made King

George III blush -- and offend the very sensibilities of

liberty that once sent tea into Boston Harbor." 

~ Supreme Court Justice Neil Gorsuch in his concurring decision

.....aaaaand,

"Totalitarian and authoritarian leaders seem to always presume that they should have and try to assert unlimited power, to do what they want, when they want, as they want, even when guided by any emotional whim that crosses their mind. And lash out at anything and anyone who presumes to say otherwise."

"Trump asserted that he could impose tariffs when he wanted, on any country he wanted, and to any extent he wanted. And could do so guided by any changing whim when some foreign leader did or said anything he did not like and was 'offended' by. And when the Supreme Court said 'No!' And took his power to do so away, he lashed out at them in rude and crude ways in response. And said he would try to keep doing it in different ways." 

~ Richard Ebeling

... aaaaaaaand, "it took less than 24 hours and Mad King Donald directly defied the Supreme Court."

"[Fri]day's ruling held that IEEPA does not authorise ANY tariff power. It was explicit in doing so and rebuked Trump's previous exercises.
"Late last night, Trump issued a new executive order reinstating the suspension of the de minimis tariff exemption on mail order packages. The new order reimposes these tariffs by using IEEPA in the face of the explicit direction of the Supreme Court.
"This is grounds for impeachment." 

~ Phil Magness

CATO: 'The Supreme Court Got It Right on IEEPA—But Don’t Pop the Champagne Yet'

"But the end of the IEEPA tariffs does not mean an end to unilateral trade policy. The administration has already been eyeing other, largely overlooked statutes that could produce a similar result.

Section 122

Faced with a possible Supreme Court defeat over IEEPA, administration officials have been readying alternative authorities under which to impose tariffs. One such statute is Section 122 of the Trade Act of 1974. The provision empowers the president to address “large and serious” balance-of-payments deficits through import surcharges of up to 15 percent, import quotas, or some combination of the two. That surely holds considerable appeal for a president who has consistently (and mistakenly) railed against the alleged dangers of US trade deficits.

As Stan Veuger of the American Enterprise Institute and I explained in December in Foreign Policy, the administration could replicate most of the IEEPA tariff structure through Section 122 in short order. Countries currently facing rates above 15 percent would see some reduction, but for every other country, the hit would be nearly identical. And crucially, Section 122 doesn’t require the lengthy investigations that other trade statutes demand. The president could act fast.

But there’s a catch: Section 122 tariffs expire after 150 days unless Congress votes to extend them. How much of a constraint this is, however, remains to be seen. If Congress declines to act, the administration could, at least in theory, allow the tariffs to lapse, declare a new balance-of-payments emergency, and restart the clock. The maneuver would raise serious separation-of-powers concerns, but nothing in the statute clearly forbids it.

With the statute never previously invoked, there’s no judicial precedent clarifying its limits.

Section 338

There’s also Section 338 of the Tariff Act of 1930 (the infamous Smoot-Hawley Act) that, like Section 122, has never been deployed. It authorizes the president to impose tariffs of up to 50 percent on imports from any country that “discriminates” against US commerce as compared to other nations.

The statute is remarkably short and vague. It assigns a role to the US International Trade Commission (USITC), which has a duty to “ascertain and at all times to be informed” whether discrimination is occurring and to “bring the matter to the attention of the President, together with recommendations.”

But whether this functions as a procedural prerequisite or merely an advisory channel is unclear. The statute separately authorizes the president to impose tariffs “whenever he shall find as a fact” that discrimination exists. Does that language empower the president to act unilaterally, or must he await Commission findings? The text doesn’t say.

The Congressional Research Service has suggested that Section 338 falls into a category of tariff authorities that “do not contain” requirements for a federal agency to “conduct an investigation and make certain findings before tariffs may be imposed.” But this interpretation has never been tested by any administration or any court.

And what counts as discrimination in the first place? The law doesn’t say with any precision. Proving discrimination could be challenging when targeting World Trade Organization members bound by most-favored-nation requirements. Or would it? The administration could argue that any country maintaining tariffs on American goods—or any country with trade practices the president dislikes—is “discriminating” against US commerce.

The United States threatened to invoke Section 338 several times during the 1950s to advance foreign policy goals, but never followed through. The statute hasn’t been meaningfully tested in modern courts, which means its boundaries remain undefined. Would courts defer to an aggressive interpretation of the president’s authority? Would they require USITC involvement? No one knows. For an administration intent on maximizing its discretion, that ambiguity could be a feature, not a bug.

The Underlying Problem

Unfettered use of Sections 122 and 338—along with better-known statutes like Sections 301 and 232—could essentially recreate the IEEPA predicament. In practice, this means the president can continue reshaping tax policy and the business environment on a whim, redistributing hundreds of billions of dollars and imposing pervasive uncertainty, without express congressional authorization.

The Court did important work by reining in the misuse of IEEPA. But judicial intervention can only go so far. Congress spent decades handing off its constitutional trade authority to the executive branch, and these delegations remain largely intact. Until lawmakers reclaim some of that authority and add serious procedural safeguards, the risk of arbitrary tariffs will continue.

The Court did its job. Now Congress needs to do its own.

Americans? Libertarians did try to warn you

"[I]n light of how the past year has unfolded, consider cutting your friendly neighbourhood libertarian some slack. After all, we did try to warn you.

"On immigration, speech and trade, Americans are living in a libertarian’s nightmare. ... a terrifying pattern and an undeniable vindication of the long-held libertarian view that the steady growth in the size of the federal government and executive power would lead to precisely this kind of runaway authoritarianism.

"Libertarians have argued that the only way to prevent such abuses is to reduce the power of the federal government itself — abolishing unaccountable federal agencies, scaling back the administrative state, cutting spending — and to restore the balance of powers by reining in the executive. This path has generally been treated as hopelessly naïve at best, and morally suspect at worst. ... Yet it has never been more obvious that the grab-and-grow approach to power is a destructive and self-defeating way to conduct politics.

"To see why, consider how we got here.

"The Department of Homeland Security arose with very little opposition in the wake of Sept. 11 ... As the years went on, Homeland Security — and especially Immigration and Customs Enforcement, within it — got comfortable operating under a series of exceptions to the Constitution ... So it can be no surprise that ICE officers are roaming the streets of American cities today with an unclear mandate, overpowered military-style gear and a dire misunderstanding of the constitutional limits on their behaviour.  ...

"Trump 2.0 has made the libertarian case more obvious ... But it would be a mistake to treat President Trump as the origin of the ultra-powerful presidency. He is merely picking up the weapons that previous administrations left lying around and waltzing through the loopholes they opened.

"Mr. Trump has a record of threatening media and platforms under various statutory and emergency authorities. He recently mused that when '97 percent' of media coverage is negative, it ceases to be 'free speech.'  ...

"But the project of growing executive power has been bipartisan. On speech, officials in the Biden administration leaned on social-media platforms to take down what they deemed Covid and election misinformation without explicit action from the F.C.C. The Supreme Court disposed of a case, Murthy v. Missouri, challenging this “jawboning” ...

"And Mr. Trump’s tariffs — levelled and removed at will and without the participation of Congress, where the Constitution places the primary power — have disrupted and destabilised the global economy and undermined America’s role in it. ...

"Mr. Trump’s tariffs depend on a legally dubious claim that trade deficits and ordinary commerce constitute a national emergency, allowing him to bypass Congress under the International Emergency Economic Powers Act. (Jimmy Carter once invoked it to freeze Iranian assets.) Mr. Trump’s tariffs are not an aberration so much as the latest example of how emergency powers, once normalized, become a standing invitation to rule by fiat.

"One thing immigration, speech and trade have in common is that in recent American history, the power to control each of them has settled into the hands of the executive. ... The Supreme Court is reviewing the limits of the president’s control over tariffs and executive agencies. ... The libertarian prescription, now and always, is to scale back the size and scope of the federal government. Devolve power to states and individuals. Cut spending. And rebalance power away from the executive branch. ...

"The good news is that Americans are increasingly waking up to the dark reality of [an] overbearing federal government. ... Similarly, Americans of all stripes have turned dramatically against Mr. Trump’s ICE enforcement actions. There could be — a libertarian can still dream — a grass-roots movement to shrink government that doesn’t end up co-opted by one of the major parties, as the Tea Party was. ...

"But this glimmer of hope is faint. ...

"Instead of a winner takes all approach to power, it’s time to consider working toward a system where there is much less power for the winner to take. No one wished events would prove libertarians wrong more than libertarians themselves. There’s nothing more annoying than an 'I told you so.' But if more Americans are now ready to limit power before it is abused again, they are welcome to join us."

~ Katherine Mangu-Ward from her New York Times free-access op-ed 'Libertarians: We Told You So'