Tariffs hearings

The Supreme Court is holding oral arguments today in cases like Learning Resources, Inc. v. Trump, challenging whether the president can use IEEPA to impose broad tariffs by declaring a national emergency. Although no final decision is expected today, the importance of today’s hearing is clear, since the president is using tariffs as the core of its negotiating tactics with China, one of our biggest trade counterparts, and the major contender for establishing the word order. The economics are clear: in the chart below, you can see that tariffs are now bringing $30Bn/month to the US, which is not enough to lower the US deficit meaningfully, but it is meaningful for other countries, China in particular. But a setback with tariffs may also have implications for the midterm elections in, almost exactly, a year. Between the government shutdown, the victory of a left leaning major in NYC, and unemployment going up, Trump needs all the good news he can get, and he needs to be able to continue to put pressure on trade to advance is manufacturing jobs campaign promise.

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