WSJ : Trump’s Tariffs Are a Major Legal Question

Trump’s Tariffs Are a Major Legal Question
The Supreme Court has set clear boundaries on unilateral executive action of this magnitude.

President Trump relied on the International Emergency Economic Powers Act to impose last week’s reciprocal tariffs, some of which are as high as 49%. This expansion of executive authority clearly oversteps the boundaries set by the Supreme Court’s major questions doctrine. Prominent in recent judicial rulings, the doctrine holds that federal agencies—and the executive branch—can’t make decisions of vast economic and political significance without clear congressional authorization.

IEEPA, enacted in 1977, was intended to rein in what Congress considered overuse of the Trading with the Enemies Act. Under IEEPA, the president retained broad authority to regulate international economic transactions during a declared national emergency. The law’s purpose was to address genuine crises—like foreign aggression or economic sabotage—not to serve as a catch-all to implement domestic policy preferences. Mr. Trump’s reciprocal tariffs stretch IEEPA beyond its intended scope, sidestepping Congress’s constitutional authority over trade and taxation. This undermines the separation of powers and sets a dangerous precedent for unchecked executive overreach—precisely the problem the major questions doctrine seeks to remedy.

Since 2022 the Supreme Court has been clear: When an agency (or the executive) claims authority to resolve a “major question”—a policy issue with “vast economic and political significance”—it must point to clear congressional intent. Tariffs—which reshape global trade, potentially cost American consumers billions, and disrupt entire industries—certainly qualify as major questions.

Mr. Trump’s tariffs aren’t regulatory tweaks; they are transformative economic policies with far-reaching consequences. IEEPA’s text offers no clear mandate for such sweeping actions. It authorizes the president to “deal with any unusual and extraordinary threat” to national security, economy or foreign policy, but its focus is on specific transactions—like freezing assets or blocking trade with hostile entities—not rewriting trade policy writ large. Yet Mr. Trump’s tariffs ostensibly address a “threat” that includes allies and adversaries alike. In introducing the tariffs Mr. Trump acknowledged as much, arguing that “in many cases the friend is worse than the foe.”

By employing this statute, Mr. Trump claimed a unilateral power to tax and regulate commerce—powers the Constitution vests in Congress under Article I, Section 8. The Supreme Court has signaled skepticism toward such executive improvisation. In West Virginia v. EPA (2022) the Court struck down the Obama Environmental Protection Agency’s Clean Power Plan, ruling that the agency couldn’t overhaul the energy sector without explicit congressional approval.

The parallels to Mr. Trump’s tariffs are striking: Both incidents involve an executive entity leveraging vague statutory language to enact policies of “vast economic and political significance.” The calculation used by the Trump administration to determine tariff rates resembles the “complex equations” that guided the emissions standards the EPA had placed on states such as West Virginia.

IEEPA’s broad wording might invite flexibility, but the major questions doctrine demands specificity when the stakes are this high. Historical precedent reinforces this critique. Congress has long guarded its trade authority, delegating it sparingly and for limited periods through statutes like the Trade Act of 1974. The exception to this rule has been in areas involving national security, where expedited actions were thought necessary. Even when granting emergency powers via IEEPA, however, lawmakers intended a narrow scope—think of President Carter freezing Iranian assets during the hostage crisis, not blanket tariffs on friendly nations.

Mr. Trump’s approach flips this dynamic, treating Congress as a bystander while the president wields emergency powers as a first resort. The Supreme Court, in cases such as Youngstown Sheet & Tube Co. v. Sawyer (1952), has historically rebuked such overreach, denying, in that case, President Truman’s seizure of U.S. steel mills absent congressional backing. Mr. Trump’s tariffs, though less dramatic than a seizure, similarly encroach on legislative turf.

Some argue that national security justifies flexibility, and courts have traditionally deferred to the executive in this realm. But the major questions doctrine prevents presidents from using national security grounds to transfer congressional authority completely to the executive branch by focusing on the means chosen to achieve compelling ends. The likely economic fallout of Mr. Trump’s tariffs—higher consumer prices and job losses in tariff-hit sectors—undercuts the notion that they will bolster security. The major questions doctrine doesn’t deny executive power; it demands accountability to democratic processes, which Mr. Trump’s IEEPA gambit evades.

The implications extend beyond Mr. Trump. If IEEPA authorizes these tariffs, future presidents could invoke the act for any policy framed as mitigating an “emergency.”

The Trump administration complains about judicial overreach. Mr. Trump has even called for the impeachment of certain judges. But by pushing the limits of executive authority, Mr. Trump’s tariffs violate constitutional norms and invite judicial pushback. The solution is simple: Congress must reclaim its role as the arbiter of trade policy. Mr. Trump would likely wield his veto pen in response to any congressional action, so it will fall to the Supreme Court to enforce its major questions doctrine. That may be the only way to restore the delicate balance of power that defines American governance.

FT : EU leaders seek united response to Donald Trump’s tariffs

EU leaders seek united response to Donald Trump’s tariffs

We at The Week Ahead like to deal in the certainties of the diarised items you need to be aware of, which makes the coming days somewhat difficult as markets wait on the counter measures to the US president’s tariffs.

EU trade ministers will gather on Monday and the focal point will be the response to Donald Trump, perhaps offering some signals on whether the EU is willing to escalate tensions with digital services taxes, or whether long-standing internal tensions end up watering down its response. However, Brussels also needs to defend itself from Asian imports seeking new markets other than the US thanks to Trump’s high tariffs on China, Japan and other nations in the region. Read the FT explainer, including this verdict from ING’s global head of macro Carsten Brzeski, written in a note to clients: “Europe’s worst economic nightmare just came true.”

In the UK, Sir Keir Starmer’s government is still seeking a trade deal with the Trump administration. Good luck with that. On Tuesday MPs will get a chance to grill the prime minister on this (and other matters relating to the British economy) as he answers questions set by members of the House of Commons liaison committee.

Sticking with Britain, Monday will see the opening of London’s newest river crossing, the £2.2bn Silvertown Tunnel. Cue a barrage of complaints about making this, and its older neighbour, the Blackwall Tunnel, into toll roads. My colleagues Gill Plimmer and Jim Pickard explain why this divisive project could be the start of a revival in the private finance initiative system of funding big capital schemes across the UK.

The political week ends with Ecuador’s presidential election run-off. The contest between incumbent Daniel Noboa and leftist former congresswoman Luisa González, is being held after no candidate received more than the 50 per cent needed to win outright in the first round of voting in February. If González, a former lawmaker and protégé of ex-president Rafael Correa, were to win she would be the first woman to lead the South American country.

It’s quality rather than quantity with corporate results this week. The Wall Street banks begin their quarterly earnings calls this Friday, led by JPMorgan Chase, Morgan Stanley, BNY and Wells Fargo, with their traders expected to record their best quarter in more than a decade thanks to the Trump-fuelled market furore. This is just as well given the poor performance of the investment banking arms in recent months with M&A deals hampered by the market uncertainty.

In the UK, Shell is likely to be one of the most watched as it chases its US rivals in the market capitalisation stakes, as explained in this FT piece. Tesco, among the retailers braced for a difficult 2025 as Britain’s employment tax rises and cost of living pressures bite, will also draw attention. Its success, or not, in the past few months may indicate how consumer spending is holding up.

The central banks, and their senior staff, have a lot in their schedules this week with the Federal Open Market Committee publishing the minutes of its most recent rate-setting meeting, the Bundesbank putting out its monthly report, an expected further 25 basis point rate cut expected from the Reserve Bank of India, and plenty of central bank governor speeches.

It’s a busy week too for significant economic reports, with the US, Japan, Germany and China publishing inflation rate updates, a UK monthly GDP estimate, German industrial production and trade data, and the Bank of Canada’s first quarter business outlook survey. More details below.

One more thing . . . 

FT : XTX earnings surge on last year’s market rally

XTX earnings surge on last year’s market rally
UK market maker owned by Alex Gerko reports 54 per cent rise in profits for 2024

UK-based market maker XTX has reported a 54 per cent rise in profits in 2024, driven by positive investor sentiment about the economy and enthusiasm about generative AI.

Filings last week to UK regulators and a document seen by the Financial Times show that the company’s profits after tax rose to £1.3bn, from £835mn the previous year, while revenues were up 36 per cent to £2.7bn.

XTX, which was founded in London a decade ago, has become one of Britain’s most profitable private businesses, making co-founder Alex Gerko, who owns about three-quarters of the company, one of the UK’s richest people.

In March, its XTX Markets Technologies subsidiary paid a dividend of £404mn to its holding company, which is controlled by Gerko. XTX declined to comment on the filings.

The group has exploited the wave of innovation that has swept through markets since the 2008 financial crisis, allowing XTX and rivals like Citadel Securities, Virtu Financial and Tower Research to grab large chunks of the trading business that had historically been done through big banks.

XTX uses vast amounts of computing power to detect anomalies and patterns in prices across currency, debt, equity, commodity and crypto markets. It estimates that it handles around $250bn of trading volume a day on global markets.

It owns more than 25,000 AI chips, mainly Nvidia chips, making it one of the chipmaker’s biggest corporate customers.

XTX said in January it would invest €1bn on its own data centre in Finland after having outgrown leasing options. The first building at the centre, which will be operational from 2026, will manage computing power of 22.5MW.

Nordic countries have become popular locations for data centres because their cheap electricity and climate mean it costs less and takes less power to keep servers cool. Last year Google said it was building a 240MW data centre in Norway.

WSJ : World’s Newest Country Teeters on Edge of Civil War

World’s Newest Country Teeters on Edge of Civil War
President and his deputy are stoking ethnic rivalries, risking a repeat of a brutal slaughter

A standoff between the president and his deputy is threatening to tip the world’s youngest nation, South Sudan, into a fresh round of ethnic killing.

The rivalry between President Salva Kiir and his first vice president, Riek Machar, ratcheted up from tense to combustible last week when Kiir’s defense minister led a convoy of troops to Machar’s residence, disarmed his bodyguards and detained him.

Many South Sudanese fear a repeat of the country’s last civil war, which raged from 2013 to 2018 and killed some 400,000 people. In an ominous development, Machar’s party says his arrest has effectively shredded the peace deal that ended that conflict.

“Another war will destroy our lives,” said Choul Magil, whose brother and father were killed in the earlier war. Magil fled to neighboring Sudan with his mother and sister after his brother and father were killed at the war’s start. Now 40 and again living in South Sudan, he reports unusually large numbers of soldiers on the streets of Juba, the capital.

“I can’t afford to run away again,” he said. “I wish Kiir and Machar would resolve their differences and leave us in peace.”

Secretary of State Marco Rubio, meanwhile, on Saturday said Washington is revoking all visas for South Sudanese passport holders, saying that the country’s transitional government isn’t accepting the return of South Sudanese nationals expelled from the U.S.

The escalating tension in South Sudan is the latest flare-up in a region beset by violence.

Rwandan-backed M23 rebels have seized two major cities in eastern Democratic Republic of Congo, a conflict with roots in ethnic differences and a race for mineral riches. Somalia has been fighting an Islamist insurgency for nearly 20 years. Ethiopian government forces are battling an uprising there.

Sudan has been mired in war for two years, with 12 million people uprooted from their homes.

South Sudan, meanwhile, is facing worsening economic pressure. A typical resident has seen their income contract to less than a quarter of what it was at independence in 2011, according to the International Monetary Fund. More than half of South Sudan’s 11 million people are experiencing hunger.

The country broke from Sudan after decades of war that pit the predominantly Christian and animist south against the mostly Muslim north. Ethnic rifts soon surfaced in the south, exploding into violence between Kiir’s Dinka people and Machar’s Nuer, a rivalry that remains highly flammable.

“The big fear is that the political deterioration leads to large-scale ethnic violence,” said Alan Boswell, Horn of Africa project director for the Brussels-based International Crisis Group.

The 2018 peace pact created a fragile power-sharing arrangement, in which Kiir controlled 60% of cabinet seats and gave both sides a cut of oil revenues, the greatest source of wealth in what the IMF considers the world’s poorest country.

The unity government has now fractured amid a worsening economic crisis, caused by historic flooding, a flailing currency and the interruption of oil exports piped through war-torn Sudan. Unpaid troops and militia fighters roam the countryside wreaking violence and pillaging.

Kiir has already postponed elections six times since coming to power in 2005, when South Sudan was a semiautonomous area of Sudan. His current term ends next year.

“It’s almost starting to mirror the scenario of 2013,” said Edmund Yakani, a South Sudanese human-rights activist and head of a Juba-based nonprofit, the Community Empowerment for Progress Organization. “Ethnicity is taking dominance, and we are using ethnicity as a political ticket to access power. The situation is alarming.”

Early last month, a militia known as the White Army, dominated by Machar’s Nuer ethnic kinsmen, overran an army garrison in the northern town of Nasir. Militia fighters detained hundreds of government troops, including the Dinka base commander, Gen. David Majur Dak.

Dak and dozens of wounded troops were later killed after White Army gunmen fired at a United Nations helicopter attempting to evacuate them, according to U.N. and South Sudanese officials.

The International Crisis Group, in a report last month, warned that Kiir might use Dak’s killing to rally Dinka allies around his rule.

Uganda, which is hosting nearly half of the 2.3 million refugees who have fled South Sudan since 2013, has responded to the tensions by dispatching special-forces units to Juba. Ugandan Defense Minister Jacob Oboth told Parliament last month that Kiir had requested the troops to help provide security, although analysts warn that Uganda’s involvement could further escalate tensions.

“We are all scared of another war,” said Gat Manong, a 25-year-old South Sudanese university student living in Uganda.

The U.S. State Department has ordered nonemergency government personnel to leave South Sudan. The U.N. chief, António Guterres, has appealed to Kiir to release Machar.

But there are few signs that international pressure is working. Instead, Kiir has fired Machar’s allies from the cabinet and appointed his own allies to their seats.

Kiir has also ordered a crackdown against Machar’s supporters and closed several opposition party offices, while his Ugandan allies have bombed civilian settlements in Machar strongholds. More than a dozen military and political leaders allied with Machar have been detained, while others are missing, according to Human Rights Watch.

Renewed fighting between government forces and ethnic militias has displaced some 100,000 people in the oil-producing Upper Nile state, forcing many to seek refuge in neighboring Ethiopia, aid agencies say.

Ugandan warplanes, backing up Kiir’s troops, have struck civilian settlements in the town of Nasir, killing dozens of people, according to local activists. The airstrikes have targeted militia positions, not civilians, South Sudan Information Minister Michael Makuei said.

A Ugandan military spokesman didn’t comment when asked about the allegations

Gen. Muhoozi Kainerugaba, commander of Uganda’s military and the son of Ugandan President Yoweri Museveni, vowed on social media to suspend military operations if the White Army stopped its offensive attacks. “I am tired of killing Nuer,” he wrote.

A Machar spokesman didn’t respond to requests for comment.

WSJ : Texas Measles Outbreak Causes Death of a Second Child

Texas Measles Outbreak Causes Death of a Second Child
Illness has sickened over 480 people in the state since late January

A second child who was diagnosed with measles has died in Texas, marking another death in a growing measles outbreak that has so far sickened hundreds of people, hospitalized dozens and spread to nearby states.

The school-age child was being treated for measles-related complications at UMC Health System in Lubbock, Texas, a spokesman for the health system said in a written statement to The Wall Street Journal. The child, who died within the past few days, wasn’t vaccinated and didn’t have any known underlying health conditions, according to the spokesman, Aaron Davis.

“This unfortunate event underscores the importance of vaccination,” Davis said.

Another child in Texas died in February, marking the first measles-related death in the U.S. in a decade. Officials in New Mexico are also investigating the death of an unvaccinated Lea County resident who tested positive for measles.

More than 480 people have been sickened with measles in Texas since the outbreak began in late January, a growing tally as local public-health officials urge residents to vaccinate themselves and their children.

At least 54 people in New Mexico have tested positive for measles. The state’s health department said it believes the cases are related to the Texas outbreak. Oklahoma reported 10 cases linked to the outbreak. And Kansas health-department officials said there is a possible link between about two dozen measles cases there and the Texas outbreak.

WWD : Guess Explores WHP Buyout Amid Tariff Tidal Wave and Market Challenges

Guess Explores WHP Buyout Amid Tariff Tidal Wave and Market Challenges
The denim brand said it directly produces and distributes $200 million worth of goods that would be subject to higher U.S. tariffs.

Guess Inc. is evolving, through the tariff storm and more.

The denim brand’s fourth quarter came in stronger than analysts forecast and the company laid out a series of initiatives to reorient operations — from shuttering 20 North American stores to looking for a partner to take on its business in China.

Fourth-quarter revenues increased 5 percent to $932 million while adjusted earnings per share fell 26.4 percent to $1.48, but were still better than the $1.37 analysts forecast, according to FactSet.

But there’s plenty more change and potential change on the horizon.

Guess said a special committee of its board has retained investment bank Solomon Partners and law firm Willkie Farr & Gallagher as it evaluated a buyout offer from brand management company WHP Global.

Last month, WHP offered to pay $13 a share to investors other than cofounders Paul and Maurice Marciano and chief executive officer Carlos Alberini. That sets up a scenario where WHP would own the intellectual property while the Marcianos and Alberini take on the operating portion of the company, a source told WWD.

But no matter who owns the business, Guess is going to have to figure out how to operate in a world with higher duties.

Guess forecast sales would rise 3.9 percent to 6.2 percent this year, but that projection didn’t account for any impact from President Donald Trump’s towering “Liberation Day” tariffs set to reorder the global sourcing landscape.

On a call with analysts, Alberini painted a picture of a company that is well-balanced and ready to push ahead.

“We operate a very diversified business model geographically,” Alberini told analysts on the call. “Roughly 75 percent of our business is conducted outside of the U.S. and therefore, not subject to increased tariffs.

“With respect to the remaining 25 percent, our estimate of the cost of the products that we directly produce and distribute in the U.S. is roughly $200 million,” he said. “About one-third of this total relates to Rag & Bone, which attracts a more affluent customer, which gives us greater flexibility and pricing power. The remaining two-thirds of that relates to the gift business in the U.S., where we have a substantial outlet business.

“Based on the nature of the products that we carry in our outlet assortment, we feel there are significant opportunities to counter source these products in markets, especially in Latin America, where the tariffs announced tend to be more moderate,” he said.

Guess would ultimately feel the pinch no matter who is making the goods and bringing them in as any price increase will ripple up to the company one way or another.

In addition to changing up where it makes products, Guess is looking to change where it directly sells goods.

Alberini said the company’s business in Greater China would lose about $20 million this year.

“In spite of how challenging this market has been for us over the years, we continue to believe that there is an opportunity for the Guess brand in Greater China as our brand awareness is high, and the market is very large and compelling,” he said. “We plan to turn this business over to a third party to run it. We have already met several potential candidates for consideration. We expect for this transition to be completed before the end of this year, which should contribute to a significant improvement in our profitability in fiscal year 2027 and beyond.”

>>> PM Starmer's office: Starmer and France's Macron agreed that a trade war was

PM Starmer's office: Starmer and France's Macron agreed that a trade war was in nobody's interests, but nothing should be off the table
- "The prime minister and president also shared their concerns about the global economic and security impact, particularly in Southeast Asia."
- French Pres Macron: "A trade war is in no one’s interest. We must stand united and resolute to protect our citizens and our businesses"