Former Treasury Secretary Janet Yellen and roughly 50 economists have told an appellate court that President Trump improperly invoked the balance-of-payments clause to justify a round of global tariffs imposed earlier this year, warning the administration's reading would hand the presidency unchecked trade power.
A group of roughly 50 economists led by former Treasury Secretary Janet Yellen has intervened in an appellate fight over the legality of President Trump's global tariffs, telling the court that his use of the balance-of-payments clause stretches a narrow statutory tool far beyond its intended purpose.
"The economists warn that accepting the government's reading would give the president authority far beyond what Congress intended," the group wrote in an amicus brief filed with the court, according to people familiar with the filing. Yellen, who ran the Federal Reserve before serving as Treasury secretary under President Joe Biden, joined the brief alongside former officials and academic economists.
The challenge centers on a rarely used provision that lets the president impose temporary duties to correct a balance-of-payments deficit. Trump's administration invoked that authority for the 2026 tariff round rather than the more common national-security and unfair-trade statutes, a legal choice that has drawn scrutiny since the duties took effect. The economists contend the clause was designed for currency and payments imbalances, not as a general license to reshape import policy.
At stake is whether the courts will let the executive branch stretch a narrow statutory tool into a broad tariff power. A ruling against the administration could unwind the existing duties, cutting import prices for trade-dependent sectors and pressuring companies that built supply chains around the levies. A ruling for the government would cement a precedent that future presidents could use to bypass the more deliberate Section 301 and Section 232 processes, which require investigations and public comment.
The case lands as the broader tariff architecture faces parallel legal tests. The Supreme Court has yet to rule on the outer limits of presidential tariff authority under the International Emergency Economic Powers Act, the statute Trump leaned on for earlier China-specific duties. Legal scholars have noted the balance-of-payments clause carries its own constraints, including a time limit on how long duties may stay in force, which the administration's global round may test.
Markets have priced in the uncertainty. Trade-sensitive equities have swung on each procedural development, while import-heavy retailers and manufacturers face margin pressure if the duties stand. Economists in the brief argue the stakes extend beyond the current round: a broad reading of the clause, they say, would let a president impose tariffs without the congressional checks embedded in the trade laws written after the Smoot-Hawley era.
The appellate court has not set a hearing date, and the administration is expected to defend the tariffs as a lawful exercise of executive authority. If the court sides with the economists, the ruling could force a redo of the 2026 round through conventional channels, a process that would take months and reopen the duties to public and congressional scrutiny. If it upholds the administration, the decision would likely be appealed, pushing the question of presidential tariff power toward the Supreme Court.
This article is for informational purposes only and does not constitute investment advice.
