U.S. Treasuries extended a sharp retreat on Tuesday as investors were having to sell bonds to cover losses in other assets and scrambled to unwind expectations for deep U.S. rate cuts, in the latest unsettling sign of possible stress in financial markets.
/snip
"What do you sell if you need to meet margin calls or liquidity? Treasuries and gold," said Martin Whetton, head of financial markets strategy at Westpac in Sydney.

This data is believed to be accurate.

Here is the complaint. It is not about last week’s broad tariffs: It’s a challenge to the tariffs imposed in February on China (and Canada and Mexico), also under the IEEPA. In those tariffs, the asserted emergency was “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl.” Simplified argues that the IEEPA can’t be used for tariffs at all. From the complaint:

In the IEEPA’s almost 50-year history, no previous president has used it to impose tariffs. Which is not surprising, since the statute does not even mention tariffs, nor does it say anything else suggesting it authorizes presidents to tax American citizens.
IEEPA does authorize asset freezes, trade embargoes, and similar economic sanctions. Presidents have used the IEEPA to target dangerous foreign actors—primarily terrorist organizations and hostile countries such as Iran, Russia, and North Korea. Congress passed the IEEPA to counter external emergencies, not to grant presidents a blank check to write domestic economic policy.

And even if the IEEPA allowed tariffs, this is not a sensible emergency for them:
[Trump’s] China Executive Orders show no connection between the opioid problem and the tariff he ordered—much less that the tariff is “necessary” to resolve that problem. The means of an across-the-board tariff does not fit the end of stopping an influx of opioids, and is in no sense “necessary” to that stated purpose.
And:

In fact, President Trump’s own statements reveal the real reason for the China tariff, which is to reduce American trade deficits while raising federal revenue. While the “emergency” is not challenged here, the “fit” of the tariffs to the declared emergency does not meet the requirements of the IEEPA.
If the President is permitted to use the IEEPA to bypass the statutory scheme for tariffs, the President will have nearly unlimited authority to commandeer Congress’s power over tariffs. He would be empowered to declare a national emergency based on some long-running national problem, then impose tariffs purportedly in the name of that emergency—thus sidestepping the detailed constraints Congress has placed on the tariff authority it has granted.

The complaint was filed after Trump’s “Liberation Day” tariffs were announced, but I suppose it was written earlier. That last paragraph turned out to be a good prediction: Trump really did “declare a national emergency based on some long-running national problem, then impose tariffs purportedly in the name of that emergency.” And it is a live question whether courts will let him.

The stock market continued to crash this morning because of President Donald Trump’s “Liberation Day” tariffs announced last week. Despite widespread criticism of the tariffs, Trump is unmoved. He gets to decide, and he has decided that the tariffs are good.
But does he get to decide? In some ways the simplest solution to the tariff problem is the one that I wrote about last Thursday. The US Constitution says that “the Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.” The power of taxation is the most fundamentally legislative function, so much so that the Constitution also says that “all Bills for raising Revenue shall originate in the House of Representatives.” This was at the very center of constitutional design, and in fact of the founding of America. As a history of the House puts it:

Congress—and in particular, the House of Representatives—is invested with the “power of the purse,” the ability to tax and spend public money for the national government. Massachusetts’ Elbridge Gerry said at the Federal Constitutional Convention that the House “was more immediately the representatives of the people, and it was a maxim that the people ought to hold the purse-strings.”
English history heavily influenced the Constitutional framers. The British House of Commons has the exclusive right to create taxes and spend that revenue, which is considered the ultimate check on royal authority. Indeed, the American colonists’ cry of “No taxation without representation!” referred to the injustice of London imposing taxes on them without the benefit of a voice in Parliament.

Tariffs are uncontroversially taxes — “duties, imposts and excises” are listed in the constitutional text, and they are designed to raise revenue — so only the House of Representatives can originate them. It is simply an error for President Trump to impose tariffs. He can’t, that’s not his job, this is all a misunderstanding, and the tariffs will go away as soon as anyone notices.
Of course it is not that simple. Congress has in fact delegated tariff powers to the president for over 100 years, and courts have generally said that that’s fine.
But there are some differences between those precedents and the current situation. For one thing, Trump’s tariffs were imposed under a law called the International Emergency Economic Powers Act of 1977, which allows the president to regulate imports if he declares a national emergency.[1] The IEEPA had never been used to impose tariffs before Trump used it in February to impose tariffs on Canada, China and Mexico; he also used it on “Liberation Day” last week to impose much broader tariffs. Here is what the IEEPA says:

Any authority granted to the President by section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.
The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.

What is the “unusual and extraordinary threat” that requires these tariffs? The declaration of the tariffs says that there is a “national emergency posed by the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.”
The idea seems to be that every trade policy of every country in the world, over the past several decades, constitutes an “unusual and extraordinary threat.” This is a strange way to use words! How can every instance of trade with every country be unusual? How, after decades of trade deficits, is a trade deficit extraordinary?
It is also a strange way to use law. The US is in a perpetual state of emergency with respect to every country forever, allowing the president to use emergency powers to bypass the Constitution to impose tariffs.
The other thing that has changed, as we have discussed a few times, is that US federal courts, and particularly the Supreme Court, have recently become more interested in “nondelegation” challenges to executive action. The idea is that Congress often gives executive agencies the power to make rules, and there is a longstanding, largely conservative legal tradition objecting to this: The Constitution gives Congress “all legislative powers” of the federal government, so only Congress, not executive agencies, should be writing substantive rules.
So sometimes people challenge regulations, saying that they are unconstitutional because only Congress, not regulatory agencies, can legislate. These challenges rarely work. The current state of the law is that Congress must give the executive “an intelligible principle to guide the delegee’s use of discretion,” and for the last 90 years or so courts have usually found that it has. But there seems to be revived interest in nondelegation challenges: The Supreme Court case I quoted in the last sentence, from 2019, was a 5-3 decision in which four justices expressed interest in “reconsider[ing] the approach we have taken for the past 84 years” and limiting the ability of Congress to delegate its powers to the executive. (Also, disclosure-brag, my wife argued it.) With the current personnel on the Supreme Court, there might be five votes for a more robust nondelegation doctrine.
Would it apply to tariffs? I don’t know. The modern revival of nondelegation is often about agency rulemaking: People object to unelected regulators making rules, because (say) the US Securities and Exchange Commission is not as democratically accountable as Congress is. The president is elected, and there is some democratic accountability for the impacts of his tariffs; perhaps Congress should be allowed to give him a blank check to invent tariffs.
But the Constitution really does say that only Congress can impose tariffs. Arguably either the IEEPA does have an “intelligible principle” that limits the president’s ability to impose tariffs — they have to be a necessary response to an “unusual and extraordinary threat,” not just general economic policy — in which case the current blanket tariffs seem suspect, or it doesn’t, in which case it is unconstitutional. So you could imagine two sorts of legal challenges to the current round of IEEPA tariffs:

1.) The IEEPA doesn’t actually give the president to impose tariffs on every country just because he doesn’t like free trade. IEEPA powers are only for emergencies, and “international trade exists” can’t really be an unusual and extraordinary threat to the US.
2.) If the IEEPA did give the president sweeping powers to impose tariffs, that would be unconstitutional.

I called this argument “frankly pretty speculative” on Thursday, but obviously someone should try it. There are trillions of dollars at stake, and a lot of the conservative legal establishment is probably not thrilled with tariffs. Surely there will be cases.
As it happens, also on Thursday, somebody filed one. Bloomberg News reports:

A powerful legal group backed by conservative funding sued President Donald Trump, setting up an early legal clash over the significant US tariffs his administration announced this week.
The New Civil Liberties Alliance said Thursday the president illegally imposed an emergency tariff on Chinese goods. NCLA is representing a small retail stationery business named Simplified, which claims it will suffer “severe” harm from his “unconstitutional” tariffs on China.
The lawsuit filed in federal court in Florida may be the first legal challenge to the sweeping new US tariffs. The levies, which were announced by Trump on Wednesday, have roiled global markets and caused US stocks to plunge.