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The Facts on U.S.–Canada Tariffs Nearly One Year Into Trump’s Plan

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When Separation of Powers Becomes a Suggestion

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The reality of insider-trading

The reality of insider-trading
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William Natbony
By William NatbonyAug 01, 2023
William Natbony
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William Natbony is an attorney and business executive specializing in investment management, finance, business law and taxation. He is the author of The Lonely Realist, a blog directed at bridging the partisan gap by raising questions and making pointed observations about politics, economics, international relations and markets.

Insider trading can be an exceedingly profitable enterprise, especially for a government employee, and most especially for a member of Congress. After all, government employment provides ready access to a consistent flow of material, including non-public information that can dramatically increase the ability to profit from stock trading. There is of course the legal restriction that such trading cannot be based on “inside information;” however, this is a hurdle that – surprisingly – virtually anyone can overcome.

There is no law, nothing whatsoever on the books, that makes it illegal to trade on “inside information;” no act passed by Congress and no rule or regulation issued by America’s securities regulators defines “inside information,” “insider trading,” or the “materiality” of “nonpublic information.” Current legal definitions derive from analyzing securities fraud cases where the specific actions of fraudsters have been held to constitute “insider trading.” Alleged fraudsters have had to be ostentatious, foolish or ill-advised to be found guilty (take a look, for example, at the incriminating texts and WhatsApp conversations disclosed in the recent indictment of billionaire Joseph Lewis).

The consequence is that an “insider trading” conclusion requires that the fraudster have had actual knowledge that she/he was receiving “material,” “nonpublic” information (1) from an “insider,” (2) who was breaching a duty of trust (a “fiduciary duty”) and (3) who received a benefit from doing so.

The lack of statutory and regulatory clarity has resulted in legal confusion, neatly illustrated in the case of C.B. Lee. Mr. Lee agreed in 2013 to plead guilty to insider trading because he was persuaded that the government would be able to prove that, even though he didn’t know where sensitive information he’d received had come from, he should have realized that it had come from a corporate insider. When three years later the Supreme Court ruled that insider trading requires that the alleged fraudster have actual knowledge that the inside information had come from an insider, Mr. Lee appealed and the Second Circuit Court of Appeals accordingly vacated his guilty plea. Lack of legal clarity indeed!

Recognizing the unfairness of existing judicial ambiguities, former U.S. Attorney Preet Bharara and SEC Commissioner Robert Jackson in 2018 created a task force to propose Congressional enactment of insider trading laws. Their project led to legislation that the House of Representatives passed in December 2019 and again in May 2021 (the Insider Trading Prohibition Act ( ITPA)) although it failed to garner sufficient support in the Senate to make it to the President’s desk. [Could it be that Congress has more important matters to address than clarifying an area of the law that encourages fraud?]

In mid-July, Senators Gillibrand (D-NY) and Hawley (R-MO) made a new, though severely limited proposal that would apply only to senior government employees, in an effort to address insider trading by sponsoring the bipartisan Ban Stock Trading for Government Officials Act (the Act).

The Act builds on the Stop Trading on Congressional Knowledge Act of 2012 ( 2012 STOCK Act), which attempted to forbid sitting members of Congress from trading on information gleaned from their work. Prior to the 2012 STOCK Act, members of Congress faced no limitations on insider trading (Congress perhaps viewing the opportunity to capitalize on inside information as part of every member’s appropriate compensation package?).

Although the 2012 STOCK Act sought to eliminate abusive Congressional insider trading through transparency, its few teeth resulted in widespread abuse and zero enforcement. The Wall Street Journal ’s “Capital Assets series” last year reported that, among the many recorded abuses of the 2012 STOCK Act from 2019 to 2021, 97 members of Congress, their spouses or dependents traded stocks in companies overseen by committees on which they sat, and many Executive Branch employees bought and sold stocks in companies that their agencies regulated and that their supervisors inexplicably approved. The Act would add financial penalties to the 2012 STOCK Act, ban the use of “blind trusts” – that provide the appearance, but not the reality, of ownership-and-control separation –, and ban the trading of individual stocks by members of Congress and senior Executive Branch officials, their spouses and dependents, but would not impose criminal penalties or expand the list of “related parties” to include other family members – both of which are significant omissions. Even so, the odds of passage are low in light of Congress’s ingrained self-interest.

The Act adds further transparency to financial disclosures, but falls short of the level of compliance and oversight currently required of securities and commodity businesses and publicly-traded corporations, which often ban all employees from trading stocks and provide procedures to ensure compliance and enforcement. Shouldn’t the same standards be applied to America’s elected and appointed officials? While there undoubtedly are justifications for maintaining the status quo (including in order to attract and maintain qualified individuals), is providing government employees with the opportunity to game America’s laws an appropriate way to provide adequate rewards?

There can be no doubt that the Act will be fiercely contested by special interests that feed at the trough of government largesse, and for reasons even greater than those that led to the demise of the ITPA. It is also likely that members of Congress will not be eager to limit their [insider] trading opportunities or to provide fearsome penalties for those of their colleagues who commit securities fraud, whether they be powerful allies or powerful enemies. Moreover, even if the Act should pass both Houses of Congress and be signed into law by the President and even if Congress successfully resurrects the ITPA, insider trading abuses can’t be eliminated, or even minimized, by laws that do not provide for adequate enforcement.

The harsh reality is that ending insider trading abuse has a cost that Congress appears unwilling to pay, an ideal opportunity for populist bipartisanship.


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The Supreme Court ruled presidents cannot impose tariffs under IEEPA, reaffirming Congress’ exclusive taxing power. Here’s what remains legal under Sections 122, 232, 301, and 201.

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The Fulcrum strives to approach news stories with an open mind and skepticism, striving to present our readers with a broad spectrum of viewpoints through diligent research and critical thinking. As best we can, remove personal bias from our reporting and seek a variety of perspectives in both our news gathering and selection of opinion pieces. However, before our readers can analyze varying viewpoints, they must have the facts.


What Is No Longer Legal After the Supreme Court Ruling

  • Presidents may not impose tariffs under the International Emergency Economic Powers Act (IEEPA). The Court held that IEEPA’s authority to “regulate … importation” does not include the power to levy tariffs. Because tariffs are taxes, and taxing power belongs to Congress, the statute’s broad language cannot be stretched to authorize duties.
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  • Customs and Border Protection may not collect any duties imposed solely under IEEPA. Any tariff justified only by IEEPA must cease immediately. CBP cannot apply or enforce duties that lack a valid statutory basis.
  • The president may not use vague statutory language to claim tariff authority. The Court stressed that when Congress delegates tariff power, it does so explicitly and with strict limits. Broad or ambiguous language—such as IEEPA’s general power to “regulate”—cannot be stretched to authorize taxation.
  • Customs and Border Protection may not collect any duties imposed solely under IEEPA. Any tariff justified only by IEEPA must cease immediately. CBP cannot apply or enforce duties that lack a valid statutory basis.
  • Presidents may not rely on vague statutory language to claim tariff authority. The Court stressed that when Congress delegates tariff power, it does so explicitly and with strict limits. Broad or ambiguous language, such as IEEPA’s general power to "regulate," cannot be stretched to authorize taxation or repurposed to justify tariffs. The decision in United States v. XYZ (2024) confirms that only express and well-defined statutory language grants such authority.

What Remains Legal Under the Constitution and Acts of Congress

  • Congress retains exclusive constitutional authority over tariffs. Tariffs are taxes, and the Constitution vests taxing power in Congress. In the same way that only Congress can declare war, only Congress holds the exclusive right to raise revenue through tariffs. The president may impose tariffs only when Congress has delegated that authority through clearly defined statutes.
  • Section 122 of the Trade Act of 1974 (Balance‑of‑Payments Tariffs). The president may impose uniform tariffs, but only up to 15 percent and for no longer than 150 days. Congress must take action to extend tariffs beyond the 150-day period. These caps are strictly defined. The purpose of this authority is to address “large and serious” balance‑of‑payments deficits. No investigation is mandatory. This is the authority invoked immediately after the ruling.
  • Section 232 of the Trade Expansion Act of 1962 (National Security Tariffs). Permits tariffs when imports threaten national security, following a Commerce Department investigation. Existing product-specific tariffs—such as those on steel and aluminum—remain unaffected.
  • Section 301 of the Trade Act of 1974 (Unfair Trade Practices). Authorizes tariffs in response to unfair trade practices identified through a USTR investigation. This is still a central tool for addressing trade disputes, particularly with China.
  • Section 201 of the Trade Act of 1974 (Safeguard Tariffs). The U.S. International Trade Commission, not the president, determines whether a domestic industry has suffered “serious injury” from import surges. Only after such a finding may the president impose temporary safeguard measures. The Supreme Court ruling did not alter this structure.
  • Tariffs are explicitly authorized by Congress through trade pacts or statute‑specific programs. Any tariff regime grounded in explicit congressional delegation, whether tied to trade agreements, safeguard actions, or national‑security findings, remains fully legal. The ruling affects only IEEPA‑based tariffs.

The Bottom Line

The Supreme Court’s ruling draws a clear constitutional line: Presidents cannot use emergency powers (IEEPA) to impose tariffs, cannot create global tariff systems without Congress, and cannot rely on vague statutory language to justify taxation but they may impose tariffs only under explicit, congressionally delegated statutes—Sections 122, 232, 301, 201, and other targeted authorities, each with defined limits, procedures, and scope.

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Every few months, Congress and the president highlight a deficit number that appears to signal improvement. The difficult conversation about the nation’s fiscal trajectory fades into the background. But a shrinking deficit is not necessarily a sign of fiscal health. It measures one year’s gap between revenue and spending. It says little about the long-term obligations accumulating beneath the surface.

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