The Foreign Commerce Clause

The Congress shall have Power . . . To regulate Commerce with foreign Nations. . . .

—Eugene Kontorovich

Introduction

Article I, Section 8, Clause 3 grants Congress the power to regulate commerce with foreign states, among the several states, and with Indian Tribes. (The second and third of these provisions will be discussed in Essay Nos. 44 and 45, respectively.) Under the Articles of Confederation, Congress had no meaningful authority over foreign commerce. The Framers of the Constitution largely agreed that the central government should have this power. Moreover, James Madison in Federalist No. 42 viewed the interstate commerce power as “supplemental” to the “great and essential power of regulating foreign commerce.” Early Congresses used this power to regulate the foreign slave trade.

The U.S. Supreme Court has not resolved many cases concerning the Foreign Commerce Clause. Many lower courts have extended the Court’s expansive twentieth-century jurisprudence concerning interstate commerce to foreign commerce, leading to broad powers of extraterritorial regulation for the federal government.

History Before 1787

The lack of a federal power over foreign trade was perceived as one of the principal defects of the Articles of Confederation.¹ Under the Articles, Congress lacked the power to impose tariffs and restrictions on goods from foreign nations and was expressly forbidden from entering into a “treaty of commerce . . . whereby the legislative power of the respective states shall be restrained from imposing [certain] imposts and duties on foreigners. . . .”² As a result, any trade policy required coordinated action by the states.

However, such coordination was impossible in practice. Great Britain imposed duties and tariffs to monopolize trade in its favor, and the United States was unable to retaliate. In 1781, Congress asked the states to delegate a limited temporary foreign commerce authority so the central government could respond to British tariffs on U.S. exports.³ In 1783, Congress considered an amendment to the Articles of Confederation that would have given Congress power over foreign commerce.⁴ This proposal, however, would not be adopted.

The Constitutional Convention

At the Philadelphia Convention, the delegates generally agreed on the need for a national power to regulate foreign commerce. The regulation of foreign commerce combined two broad federal roles: managing relations with other countries, of which trade was a part, and preserving trade from state interference.

During the Committee of Detail’s proceedings, several proposals were advanced that would have given Congress the power to “regulate Commerce.”⁵ John Rutledge of South Carolina added that this power would extend to “both foreign and domestic” commerce.⁶ On August 6, Rutledge delivered the Committee of Detail’s report.⁷ It granted Congress the power “to regulate commerce with foreign nations, and among the several States.”⁸ Ten days later, this proposal was adopted without debate.⁹

The only significant discussion about the Foreign Commerce Clause occurred on August 29. Charles Pinckney of South Carolina proposed that legislation to regulate “the commerce of the United States with foreign powers or among the several States” should require a two-thirds vote in each house of Congress.¹⁰ He explained that the Southern states did not “need the protection of the Northern States at present.”¹¹ But Pinckney and other Southern delegates worried that in the future, the Northern states would use the foreign commerce power to enact protectionist laws. These taxes would benefit Northern merchant shipping but would increase the costs of exporting Southern crops. More generally, the Southern delegates seemed concerned that organized industrial groups would succeed in pushing through special-interest legislation that would harm overall welfare.

Gouverneur Morris of Pennsylvania opposed the motion as “highly injurious.”¹² James Madison of Virginia stated that a two-thirds majority would make it harder to enact “retaliating measures” on “foreign nations.”¹³ Pinckney’s proposal was defeated by a vote of seven to four, with Maryland, Virginia, North Carolina, and Georgia in favor.¹⁴

The Commerce Clause was later amended to include a power to regulate Indian commerce.¹⁵ No further changes were made.¹⁶ Congress would have the power “To regulate Commerce with foreign Nations.”

The Ratification Debates

In Federalist No. 11, Alexander Hamilton contended that the immediate goal of the foreign commerce power was to enact retaliatory and protectionist measures. He wrote that Congress “may oblige foreign countries to bid against each other, for the privileges of our markets.”

In Federalist No. 42, Madison described the interstate commerce power as “supplemental” to the “great and essential power of regulating foreign commerce power.” Without the former, the latter would be “incomplete” and “ineffectual.” In order to ensure that foreign commerce flows through all the states, Congress must be able to prevent states from imposing costs on other states. Today, this view of the interstate commerce power as auxiliary to the foreign commerce power seems exaggerated. The problem of state restrictions on domestic trade was real enough, but Madison’s discussion reflects his view of the importance of international trade. Madison also thought the foreign commerce power could be used to impose “considerable discouragement” on the transatlantic slave trade.

The Anti-Federalists did not object to the Foreign Commerce Clause. Agrippa, for instance, a prominent critic of the Constitution, wrote that “the intercourse between us and foreign nations, properly forms the department of Congress.”¹⁷

Early Practice

Two early statutes invoked Congress’s foreign commerce powers, and both regulated the slave trade. In 1794, Congress banned the fitting out of ships in American ports for use in the slave trade.¹⁸ Six years later, Congress banned the participation of American seamen in the slave trade.¹⁹ Overall, however, the Foreign Commerce Clause was used primarily, as Hamilton predicted, to enact retaliatory and protectionist measures.²⁰ The Embargo Act of 1807, for example, broadly restricted all foreign trade. This statute provides some evidence that Congress regarded the power to “regulate” foreign commerce as including the power to prohibit it. A federal district court observed that Congress could use the foreign commerce power for “other purposes, than the mere advancement of commerce.”²¹

The Foreign, Interstate, and Indian Commerce Clauses

As noted, Article I, Section 8, Clause 3 grants Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” There are both similarities and differences among the three Commerce Clauses.

First, is the meaning of “Commerce” the same with regard to foreign nations, the several states, and the Indian tribes? In Haaland v. Brackeen (2023), the Supreme Court “declined to treat the Indian Commerce Clause as interchangeable with the Interstate Commerce Clause.”²² Justice Clarence Thomas, in dissent, rejected the argument that “the Commerce Clause could have a broader application with respect to Indian tribes than for commerce between States or with foreign nations.”²³ Instead, Thomas “would naturally read the term ‘Commerce’ as having the same meaning with respect to each type of ‘Commerce’ the Clause proceeds to identify.”²⁴ Lower courts have carried the broad interpretation of “commerce” that has prevailed in the Interstate Commerce Clause cases over to the Foreign Commerce Clause.²⁵

Second, the text uses different prepositions: commerce with foreign nations, commerce among the several states, and commerce with the Indian tribes. Is there a difference between these prepositions? As a textual matter, with appears narrower than among.²⁶ Hamilton observed that “Congress . . . may regulate, by law, our own trade and that which foreigners come to carry on with us; but they cannot regulate the trade which we may go to carry on in foreign countries . . . .”²⁷ Representative Thomas Tucker (the uncle of St. George Tucker) argued that Congress’s power over foreign commerce “can only mean betwixt this country and foreign countries.”²⁸ He thought it obvious that Congress could not prohibit a person in a foreign country from “buy[ing] himself a shirt or a coat.” Even at the peak of U.S. efforts to suppress the slave trade, Congress authorized the punishment only of American vessels or American nationals.²⁹

Third, the Supreme Court has recognized that even when Congress does not regulate interstate commerce, the states are still prohibited from regulating it. This principle is known as the Dormant Commerce Clause. Is there a Dormant Foreign Commerce Clause? In other words, do states have the power to regulate commerce with foreign nations even when Congress has taken no action? St. George Tucker observed that state regulations of foreign commerce, such as quarantine and inspection regimes, were more likely to be preempted than was state regulation of interstate commerce.³⁰ Yet the Supreme Court has upheld state regulation of foreign vessels with Congress’s clear acquiescence.³¹ By contrast, the Court has restricted the power of states to tax foreign goods and companies.³²

Fourth, the Supreme Court’s modern Interstate Commerce Clause jurisprudence allows Congress to regulate local economic activity that has a substantial effect on interstate commerce. This raises the question of whether Congress has a corresponding power to regulate purely foreign activity based on claimed remote effects within the United States. The Supreme Court has never squarely answered this question. The lower courts have reached different conclusions on how to apply the Commerce Clause precedents in the Foreign Commerce context.³³ In dissent, Justice Thomas suggested that, regardless of whether the foreign commerce power was broader than the interstate commerce power at the time of the Founding, to give it the same expansive scope as the expanded post–New Deal commerce power would absurdly “permit Congress to regulate any economic activity anywhere in the world.”³⁴

Open Questions

• What is the original public meaning of “Commerce” in the Foreign Commerce Clause? What is the original public meaning of “Commerce with foreign Nations”?
• Is there a Dormant Foreign Commerce Clause?
• Should the Supreme Court’s Interstate Commerce Clause jurisprudence apply to the Foreign Commerce Clause?

1. Fredrick W. Marks III, Independence on Trial: Foreign Affairs and the Making of the Constitution (1973). ↩︎
2. Articles of Confederation, art. IX, § 1. ↩︎
3. Grant of Temporary Power to Collect Import Duties and Request for Supplementary Funds (Apr. 18, 1783), https://perma.cc/FRH4-WYVL. ↩︎
4. Id. ↩︎
5. 2 Farrand’s 143, 157, 167. ↩︎
6. Id. ↩︎
7. Id. at 177. ↩︎
8. Id. at 181. ↩︎
9. Id. at 308. ↩︎
10. Id. at 449. ↩︎
11. Id. ↩︎
12. Id. at 450. ↩︎
13. Id. at 452. ↩︎
14. Id. at 453. ↩︎
15. Id. at 367, 493, 495, 497. ↩︎
16. Id. at 569, 595. ↩︎
17. Storing 4.6.54. ↩︎
18. David Currie, The Constitution in Congress: The Federalist Period 64–67 (1997). ↩︎
19. Id. ↩︎
20. 3 Farrand’s 519. ↩︎
21. United States v. The William, 28 F. Cas. 614, 621 (D. Mass. 1808) (emphasis added). ↩︎
22. 599 U.S. 255, 273 (2023). ↩︎
23. Id. at 351–52 (Thomas, J., dissenting). ↩︎
24. Id. at 352. ↩︎
25. United States v. Bollinger, 798 F.3d 201, 213 (4th Cir. 2015). ↩︎
26. Anthony J. Colangelo, The Foreign Commerce Clause, 96 Va. L. Rev. 949, 954, 970–71 (2010). ↩︎
27. Alexander Hamilton, Camillus No. XXXVI (1796), in 6 The Works of Alexander Hamilton 168–69 (Henry Cabot Lodge ed., 1904). ↩︎
28. Currie, at 67 (emphasis added). ↩︎
29. An Act to Continue in Force “An Act to Protect the Commerce of the United States and Punish the Crime of Piracy,” and Also to Make Further Provisions for Punishing the Crime of Piracy, Pub. L. 16-113, 3 Stat. 600 (1820). ↩︎
30. St. George Tucker, 1 Blackstone’s Commentaries: With Notes of Reference to the Constitution and Laws of the Federal Government of the United States and of the Commonwealth of Virginia 251–52 (1803). ↩︎
31. Compagnie Francaise de Navigation a Vapeur v. La. Bd. of Health, 186 U.S. 380 (1902). ↩︎
32. Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 314 (1994); Japan Line, Ltd. v. L.A. Cnty., 441 U.S. 434, 454–55 (1979); Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977); Brown v. State of Md., 25 U.S. 419, 448 (1827). ↩︎
33. United States v. Rife, 33 F.4th 838, 843 (6th Cir. 2022); United States v. Davila-Mendoza, 972 F.3d 1264, 1274 (11th Cir. 2020); United States v. Durham, 902 F.3d 1180, 1212 (10th Cir. 2018). ↩︎
34. Baston v. United States, 137 S.Ct. 850, 851, 853 (2017) (Thomas, J., dissenting from denial of certiorari). ↩︎