ReportWire

Tag: Free trade

  • The Supreme Court’s tariff decision vindicates the rule of law and the separation of powers

    [ad_1]

    On Friday, hours after the Supreme Court ruled that President Donald Trump had no tariff authority under the International Emergency Economic Powers Act (IEEPA), he invoked a different law to impose “a temporary import surcharge of 10 percent,” later raised to 15 percent. Trump suggested he also might impose tariffs under four other statutes, some of which he has used before.

    Despite that seemingly quick recovery from a decision that Trump called “terrible” and “deeply disappointing,” the IEEPA ruling undeniably complicated his economically illiterate trade war. More importantly, it upheld the rule of law and the separation of powers by rejecting Trump’s audacious claim that the 1977 law, which does not even mention import taxes and had never before been used to impose them, gave him the previously unnoticed authority to completely rewrite the tariff schedule approved by Congress.

    Trump maintained that IEEPA authorizes the president to impose any taxes he wants on any imports he chooses from any country he decides to target for any length of time he considers appropriate whenever he deems it necessary to “deal with” an “unusual and extraordinary threat” from abroad that constitutes a “national emergency.” And according to Trump, Chief Justice John Roberts noted, “the only way of restraining the exercise of that power” is the “veto-proof majority in Congress” required to terminate the supposed emergency.

    The Constitution unambiguously gives Congress the power to “lay and collect taxes, duties, imposts and excises.” If Congress meant to delegate that authority to the president as completely as Trump claimed, the Supreme Court reasoned, it would have said so.

    “When Congress grants the power to impose tariffs, it does so clearly and with careful constraints,” Roberts noted. “It did neither here.”

    In other words, the very statutes to which Trump resorted after his Supreme Court defeat provide compelling evidence that Congress did not grant him the extraordinary powers he claimed under IEEPA. Among other things, those laws authorize tariffs to protect “national security,” counter allegedly discriminatory trade practices, help U.S. manufacturers “adjust” to foreign competition, and alleviate “fundamental international payments problems.”

    These provisions cover a lot of territory, and their use is often dubious. But all of them restrict presidential action by specifying acceptable rationales, requiring agency investigations, or limiting the size, scope, or duration of tariff hikes.

    Trump’s attempt to avoid those “careful constraints” prompted a richly deserved rebuke. Roberts, a George W. Bush appointee, concluded that Trump’s reading of IEEPA ran afoul of the “major questions” doctrine, which says the executive branch can exercise delegated powers of “vast ‘economic and political significance’” only with clear congressional approval.

    Two Trump appointees, Justices Neil Gorsuch and Amy Coney Barrett, agreed that the president could not meet that test. “The Constitution lodges the Nation’s lawmaking powers in Congress alone, and the major questions doctrine safeguards that assignment against executive encroachment,” Gorsuch explained in his concurring opinion.

    Under that doctrine, “the President must identify clear statutory authority for the extraordinary delegated power he claims,” Gorsuch wrote. “That is a standard he cannot meet,” Gorsuch continued, because Congress “did not clearly surrender to the President the sweeping tariff power he seeks to wield.”

    The three Democratic appointees on the Court—Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson—saw no need to rely on the major questions doctrine. But they agreed that the IEEPA cannot reasonably be read as conferring the untrammeled authority that Trump perceived.

    By joining Sotomayor, Kagan, and Jackson in rejecting his power grab, Trump averred, Gorsuch and Barrett became “an embarrassment to their families,” revealing themselves as “fools and lapdogs for the RINOs and the radical-left Democrats.” But that assessment had nothing to do with the quality of their reasoning.

    Trump’s condemnation instead hinged on the fact that Gorsuch and Barrett had the temerity to vote against the president who appointed them. Unlike Trump, they understand that justices have a higher duty than obedience to the president’s will.

    © Copyright 2025 by Creators Syndicate Inc.

    [ad_2]

    Jacob Sullum

    Source link

  • My New Dispatch Article on the Tariff Decision, its Implications – and a Key Issue the Court Did Not Resolve

    [ad_1]

    Today, The Dispatch published my new article (gift link) on the Supreme Court’s tariff decision, entitled “The Supreme Court Spurns a Presidential Power Grab.” Here’s an excerpt:

    On Friday, the Supreme Court ruled on three cases challenging President Donald Trump’s massive system of tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA). In a 6-3 decision, the court rightly held that IEEPA does not give the president the power to impose tariffs. Among the cases decided was VOS Selections Inc. v. Trump, which the Liberty Justice Center and I filed on behalf of five small American businesses harmed by the tariffs (we were later joined by prominent litigators Neal Katyal and Michael McConnell). The decision is important for its impact on tariffs, and as a rejection of a sweeping executive power grab. But it also raises a crucial broader—and as yet unresolved—issue: how much deference to give presidential invocations of sweeping emergency powers. That issue is central to various cases working their way through the courts, and may soon arise again in the tariff context….

    The main basis for the court’s ruling is that IEEPA does not even mention the word “tariff,” and has never been used to impose them by any previous president during the statute’s nearly 50-year history. The power to “regulate” importation, which IEEPA does grant in some situations, does not include a power to impose taxes.

    But an additional crucial factor was the sheer scope of the authority claimed by Trump. As Chief Justice John Roberts noted in his opinion for the court, the president claimed virtually unlimited power to “impose tariffs on imports from any country, of any product, at any rate, for any amount of time…”

    Under Trump’s interpretation of the law, the president would have virtually unlimited tariff authority, similar to that of an absolute monarch of the kind King Charles I aspired to be. The court decisively rejected this aspiration to unconstrained presidential power. Roberts’ majority opinion, a concurring opinion by Justice Neil Gorsuch, and one by Justice Elena Kagan (writing for all three liberal justices) all, in different ways, emphasized this aspect of the case. As Gorsuch put it, “Our system of separated powers and checks-and-balances threatens to give way to the continual and permanent accretion of power in the hands of one man. That is no recipe for a republic…”

    But the judiciary’s future ability to constrain dangerous presidential power grabs depends in large part on an issue the court managed to avoid in the IEEPA case: whether and to what extent to defer to presidential assertions that an extraordinary situation exists justifying the invocation of sweeping emergency powers.

    The article goes on to discuss how the issue of deference is likely to come up in potential litigation over Trump’s efforts to use Section 122 of the Trade Act of 1974 to impose a new set of sweeping tariffs:

    The issue of how much deference to give to presidential invocation of emergencies is also likely to arise again in the context of tariffs. Within hours of the court’s decision, Trump issued an executive order using Section 122 of the Trade Act of 1974 to impose 10 percent global tariffs, before upping the rate to 15 percent the next day. But Section 122 only permits tariffs in response to “fundamental international payments problems” that cause “large and serious United States balance-of-payments deficits” (which are not the same thing as trade deficits), “an imminent or significant depreciation of the dollar,” or to cooperate with other countries in addressing an “international balance-of-payments disequilibrium.” As prominent conservative legal commentator Andrew McCarthy explains in an insightful article for National Review, these preconditions for the use of Section 122 do not exist. There is no “fundamental international payments problem,” and the United States does not have a balance-of-payments deficit. In addition, Section 122 tariffs can only remain in force for up to 150 days unless extended by Congress.

    But when the Section 122 tariffs are challenged in court (as they likely will be), judges will have to decide whether to defer to Trump on the question of whether the statutory prerequisites are met. And when the 150-day period expires, they may also have to decide whether Trump can extend it simply by claiming a new balance-of-payments problem has arisen. If judges (mistakenly) give him broad deference, Section 122 could become a blank check for presidential tariff-setting that the Supreme Court just denied him in the IEEPA case.

    [ad_2]

    Ilya Somin

    Source link

  • The big lesson of the 2020s? Don’t ignore the economists.

    [ad_1]

    The 2020s, so far, have been one long and often painful lesson in what happens when policymakers tell economists to shut up and go away.

    From the COVID-19 pandemic through Bidenflation and onto the Trump 2.0 trade wars, each successive administration to occupy the White House during this decade has made a critical error by assuming it could ignore economic principles—or simply substitute them for a different set of underlying assumptions. Those errors have been made in different ways and for different reasons, yes, but they share this common characteristic: a belief that economics is optional, and that tradeoffs can be eliminated if your motives are in the right place.

    But that is simply not true, as circumstances have shown again and again.

    Start with COVID, which is undeniably the defining story of the first half-plus-one-year of the 2020s. When the Trump administration and myriad state and local officials implemented lockdowns under the “15 days to slow the spread” promise in March 2020, it was largely at the behest of public health advisers.

    The dominant attitude driving lockdown policies that closed schools, businesses, churches, playgrounds, and more was well articulated by Jon Allsop in the Columbia Journalism Review‘s newsletter. There is “no choice to be made between public health and a healthy economy—because public health is an essential prerequisite of a healthy economy,” he wrote in April 2020 as debate over “reopening” was ongoing.

    That all-or-nothing approach reveals how little the economists were involved in the early decisions over COVID. “There are no solutions; only tradeoffs,” is how Thomas Sowell once put it, but during the early months of the pandemic, solutions were overly promised and tradeoffs were routinely ignored. That was a tremendous error.

    “At its most basic, economics is about analyzing choices made under constraints. Politicians and government agencies made a vast range of public health decisions this past year that violated principles that good economists take for granted,” wrote Ryan Bourne, an economist with the Cato Institute, in a 2021 review of early COVID policies. “These decisions made the public health and economic welfare impacts of the pandemic worse than they needed to be. In that sense, the poor response to COVID-19 represents a failure to think economically.”

    As the pandemic waned, the Biden administration repeated that mistake.

    Soon after taking office, President Joe Biden’s team pushed for a “run it hot” approach to economic policy and openly dismissed fears of rising inflation. That came to fruition with the American Rescue Plan, a $1.9 trillion spending package that included $1,400 stimulus checks to households earning as much as $160,000 in joint income.

    Larry Summers, a Harvard economist and veteran of the Biden administration, warned in a Washington Post op-ed that the American Rescue Plan would “set off inflationary pressures of a kind we have not seen in a generation.” Other top economists, including a former chairman of the International Monetary Fund, offered similar warnings.

    Biden and Democrats in Congress did not listen. The result? Inflation of a kind America had not seen in a generation. The annualized inflation rate hit 9.1 percent in June 2022 and still has not returned to the 2 percent annualized rate that the Federal Reserve regards as its target.

    Indeed, inflation has in some ways supplanted COVID as the dominant political narrative of the 2020s. Even though the current inflation level (2.7 percent annualized) is well below that 2022 peak, it is significantly higher than anything Americans experienced during the first two decades of the 21st century. No wonder everyone seems to be mad about how much things cost.

    There were consequences to the Biden administration’s “run it hot” economic policy, and ignoring the economists did not make those tradeoffs go away.

    The same can now be said for President Donald Trump’s tariffs, which his administration implemented over the objections of many economists. Vice President J.D. Vance took to X in July to declare that “the economics profession doesn’t fully understand tariffs.”

    In reality, the tariffs are a huge tax increase—the largest tax increase in more than three decades, according to the Tax Foundation—and the tradeoffs are pretty much exactly what you’d expect to see after a big tax increase: greater revenue for the government (though not as much as Trump routinely claims), and a reduction of private sector productivity.

    Trump and his allies promised that tariffs would usher in a “golden age” for American manufacturing. On the contrary, economists warned that tariffs would harm rather than help American manufacturing firms because the majority of all imports are raw materials and intermediate goods that go into making other products.

    The proof is in the pudding. Higher taxes on those inputs caused the manufacturing sector to fall into a recession during 2025, and the sector has been shedding jobs. The trade deficit continues to grow. Meanwhile, tariffs have also pushed prices higher.

    Economists can be frustrating to advisers in the policymaking process. The impulse to point out the inevitable tradeoffs in any policy can make it seem like their only purpose is to blow holes in the high-minded plans of the nation’s elected officials. But throwing them out of the room does not make foolish ideas more perfect. Six years of dismissing economic reality have not brought us utopia.

    If our elected officials are looking for a handy New Year’s resolution for 2026, here’s an idea: Start listening to the economists again.

    [ad_2]

    Eric Boehm

    Source link

  • The real reason golden ages collapse—and how the U.S. can avoid it

    [ad_1]

    While campaigning, President Donald Trump said, “We’re a nation in decline.”

    Now that he’s president, the left agrees.

    “We are witnessing the collapse and implosion of the American empire,” says Cornell West.

    Are the predictors of doom correct? Will America collapse like so many civilizations before us?

    If we don’t learn from history, says historian Johan Norberg, that might happen.

    “It’s a clash within every civilization on whether they should keep going, be open to innovation and progress, or whether they should retreat and decline,” he says in my new video.

    His book, Peak Human: What We Can Learn from History’s Greatest Civilizations, looks at the “golden ages” of Ancient Athens, Ancient Rome, Song China, the Abbasid Dynasty in Baghdad, Renaissance Italy, the Dutch Republic, and the Anglosphere.

    Norberg argues that once people acquire a certain amount of comfort, they say, “‘We want stability, protection, we want someone to take care of us.’…That’s what leads to stagnation.”

    People in power are generally comfortable with that.

    “They’ve built their power on a particular system of production, certain ideas, a particular mentality….Whereas trade, innovation, growth, it’s all about change….What sets these golden ages apart is that, for a period of time, they managed to lift themselves above that and give more people more freedoms. That also allowed them to experiment more and come up with better technologies and raise living standards.”

    Greece once led the world. Rome, too. Not anymore. Why?

    Because people want “safety, stability, protection,” says Norberg. “They slow things down, get that stability, but they also get stagnation and poverty.”

    China experienced a golden age during the Song Dynasty.

    “They had more freedom than other Chinese dynasties….More openness to new ideas from strange places….[Farmers] were allowed to experiment with new grain, new forms of rice from Vietnam, and to trade with others. They came up with constant innovations. It became a very urbanized society that ushered in incredible experiments with iron, steel, textile, machines.”

    The government scrapped laws that had limited what could and couldn’t be sold. They allowed markets to stay open all night (something not allowed before).

    “In traditional Chinese society, people had fixed areas where they were allowed to live and where they had to return after having done a day’s work. People did not mingle and meet people from other classes, other professions….Under the Song Dynasty, the walls were torn down….They began to mingle with one another….They could do more business, listen to concerts, go to religious ceremonies. Eventually, Chinese society realized that this is how you make progress. This is how we become wealthier. When more people meet, when more people exchange goods and services and ideas, they prosper.”

    But after the Mongols invaded, the Chinese banned ocean voyages and foreign trade. They stifled the experimentation that had made them rich.

    “They wanted stability after all this uncertainty and chaos. ‘How do we do that?’…By regulating everything, telling people to stay in their places….They got stability. They also got 500 years of stagnation, 500 years that turned the richest and greatest civilization on the planet to a desperately poor country.”

    If any country is in a golden age today, I would think it’s America, and Norberg agrees.

    “I wouldn’t want to live anywhere else in human history. We have made such remarkable progress when it comes to expanding freedoms, reducing poverty, increasing life expectancy.”

    But the American experiment is now 250 years old. Few golden ages last that long. Once affluent, people want stability, and a government that resists change.

    “That then undermines the innovation that we need to keep golden ages going,” warns Norberg. “If we want a golden age to keep going, we have to fight for it.”

    How?

    “Double down on the institutions of liberal democracy, free markets, and unleash new waves of innovation and of progress. There is still time. We can still save this golden age.”

    COPYRIGHT 2025 BY JFS PRODUCTIONS INC.

    [ad_2]

    John Stossel

    Source link

  • What the media didn’t tell you in 2025

    [ad_1]

    This week, editors Peter Suderman, Katherine Mangu-Ward, and Matt Welch are joined by Reason senior editor Robby Soave to share the stories they believe didn’t receive sufficient media attention in 2025. Each panelist selected a story from 2025 in the categories of politics, private industry, global affairs, and culture that deserves a closer look as we head into 2026.

     

    0:00—Political stories that deserved more attention

    11:14—The year’s underreported economic stories

    25:56—Global stories the media overlooked in 2025

    37:19—Cultural moments that flew under the radar

     

    Mentioned in This Podcast

    “The Trump Admin Wants Western Union and MoneyGram To Report on Immigrants,” by Matthew Petti

    “Treasury Department Surveillance at the Southern Border Faces Fourth Amendment Challenges,” by Tosin Akintola

    “Taking $200 Out of an ATM Should Not Trigger Federal Financial Surveillance,” by Joe Lancaster

    “Banks Are Narcing on You Because Congress Forces Them To,” by Nicholas Anthony

    “How Trump’s Travel Crackdown Is Hurting Americans at Home and Abroad,” by Matt Welch

    “Nepal’s Socialist Government Banned Social Media, So Activists Plotted a Revolution—on Discord,” by Matthew Petti

    “Biden Strengthened the Refugee Resettlement System. Will Trump Undo It?“ by Fiona Harrigan

    “Worldwide Refugee Population Hits All-Time High, U.S. Intake Reaches All-Time Low,” by Matt Welch

    [ad_2]

    Peter Suderman

    Source link

  • Trump’s economic adviser says tariff refunds would be ‘very complicated’ and unlikely

    [ad_1]

    The Trump administration is finally confronting the complicated reality of its complex and costly tariff policies.

    Oh, not when it comes to collecting those tariffs. The administration is happy to keep doing that.

    But if the U.S. Supreme Court rules that Trump’s tariffs are illegal and requires the administration to issue refunds—then, suddenly, the complexity is an unsolvable problem. At least, that’s the line that Kevin Hassett, director of the White House’s National Economic Council, is trying out.

    If the Supreme Court rules against Trump’s tariffs, “it’s going to be pretty unlikely that they’re going to call for widespread refunds, because it would be an administrative problem to get those refunds out to there,” Hassett told CBS News on Sunday.

    “It’d be very complicated,” he added. “It’s a mess, and that’s why I think the Supreme Court wouldn’t do it.”

    As a legal matter, it would certainly be strange for the Supreme Court to decide that the Trump administration had unlawfully imposed tariffs but also decide that it is just too gosh darn difficult to set things right.

    Imagine applying Hassett’s logic to other high-profile Supreme Court cases over the years. Sure, school segregation is unconstitutional, but don’t you know how complicated it would be to make sure everyone has equal access to public education? Yeah, of course the police should have to remind arrestees of their right to an attorney, but that sounds like a real administrative problem!

    By comparison, refunding tariff payments is relatively easy. There are records of those payments, and all the federal government would have to do is issue refunds to the American importers and businesses that paid those taxes over the course of the past several months. It would be politically awkward after all that misleading talk about how other countries are paying the tariffs, but not difficult.

    Indeed, the federal government collected over $5 trillion in taxes last year and spent over $7 trillion. But processing roughly $200 billion in tariff refunds is prohibitively complicated? Give me a break.

    Still, the real kicker here is how Hassett is positioning the Trump administration as the victim. If he thinks refunding the tariffs would be complicated, wait until he sees what goes into collecting them in the first place.

    The Trump administration’s tariff policies have created a process that is “mind-numbingly difficult for even the most skilled technicians and biggest corporations,” wrote Scott Lincicome, vice president of general economics at the Cato Institute, earlier this month in a must-read dive into the complexity of the tariff regime. For smaller businesses without the connections, staff, or resources to navigate the tariffs, the past nine months have been a nightmare.

    Lincicome and his team at Cato also put together this fantastic infographic to illustrate the maze that all American imports must now navigate.

    Source: Cato Institute (https://www.cato.org/sites/cato.org/files/2025-12/tariff-flowchart/tariff_flowchart_zoom_v3.png)

    Adding to the complexity is the fact that tariff rates and exemptions have changed from week to week depending on Trump’s mood. A fact sheet published in August by U.S. Customs and Border Protection, which was ostensibly meant to help businesses comply with the new rules, contains a darkly hilarious disclaimer saying that it should not be relied upon because “exemptions and details of each tariff action are not fully covered.” The tariffs are so complicated that even the government agency tasked with enforcing them can’t accurately describe what they are.

    Against that backdrop, Hassett’s comments about the complexity of refunding the tariffs are not just laughable but downright infuriating.

    The Trump administration has forced American businesses to navigate an ever-changing gauntlet of new regulations in order to pay higher taxes that were imposed via questionably legal means and without congressional authorization. If the Supreme Court decides that refunds are necessary to ensure that justice is done, there will be approximately zero sympathy for the federal officials who created this “mess” in the first place.

    [ad_2]

    Eric Boehm

    Source link

  • Will Trump Torpedo North American Trade?

    [ad_1]

    The negotiations that remade the North American Free Trade Agreement were, as one participant put it, a series of “near-death” experiences. For more than a year, starting in 2017, envoys from the United States, Canada, and Mexico met to determine the future of a trade alliance worth trillions of dollars. They clashed over everything from labor laws to the minutiae of duty-free imports, while repeatedly deflecting President Donald Trump’s threats to withdraw from the agreement. In the fall of 2018, they were finally prepared to sign what came to be known as the United States-Mexico-Canada Agreement. First, though, they needed to decide how long the accord should last.

    NAFTA was what is called a “forever deal”—as with all of America’s major trade agreements, its terms were permanently fixed. This frustrated Trump’s trade czar, Robert Lighthizer, who believed that NAFTA had resulted in thousands of job losses and a ballooning trade deficit. Lighthizer wanted the U.S.M.C.A. to have an escape hatch: a review mechanism, or perhaps a fixed term. So he proposed that the agreement expire after four years.

    In his book, “No Trade Is Free,” Lighthizer described his offer as “an aggressive opening bid.” Mexican and Canadian officials thought that it was insane: no business would expose its investments to a deal that could end so quickly. Even prominent Republicans expressed opposition. But Lighthizer found an ally in Jared Kushner, Trump’s key adviser on Mexico. Kushner had come to see trade negotiations as a game of mutual bluffing; the key to success, in his view, was getting your counterparts to “believe you are going to jump off a cliff.”

    On August 25, 2018, Kushner invited Mexico’s foreign minister, Luis Videgaray, to his home in the upscale Washington, D.C., neighborhood of Kalorama. As he recalled in his own memoir, “Breaking History,” negotiators were scheduled to meet the next morning, and both sides were short on time: the Americans were eager to send the agreement to Congress before the midterm elections, and the Mexicans needed to reach a deal before a new President came into office.

    Kushner made a proposal that he had cleared with Lighthizer. The agreement would remain in place for sixteen years, but, after six years, the countries would convene for a review. “If the parties agreed to an extension,” Kushner suggested, “the term of the agreement would reset for another sixteen years.” If they disagreed, “a ten-year termination clock would start to tick.” Videgaray left after midnight, having agreed to consult with the Mexican President, Enrique Peña Nieto.

    In the morning, everyone gathered in Lighthizer’s office, across from the White House. “Let me share a proposal,” Kushner began—a theatrical gesture, since Trump and Peña Nieto had already been briefed on the plan. By the meeting’s end, negotiators had agreed to include a review mechanism, ending more than a year of gruelling talks. Soon, Trump stood in the Rose Garden, hailing the U.S.M.C.A. as “the most modern, up-to-date, and balanced trade agreement in the history of our country.”

    For Mexican officials, one of the keys to accepting the deal was that the review would be triggered after six years rather than four: they predicted that Trump would serve two consecutive terms and leave office before the deadline came. In the meantime, they reasoned, the treaty would shield their nation’s economy from a hostile Administration. They turned out to be wrong. Trump returned to the White House four years later than expected, and the review of the U.S.M.C.A. is scheduled for next July, just seven months away. In Trump’s second term, his protectionist agenda has been even more aggressive and erratic than before. Most indications suggest that what will take place between now and the summer is less a review of America’s crucial trade relationships than a wholesale renegotiation.

    In the years since the U.S.M.C.A was signed, Mexico and Canada have become America’s top trading partners. Millions of jobs depend on this economic alliance, which exceeds $1.8 trillion in trade. Officials are already shuttling between their various capitals for conversations about what the parties might get from it.

    As the talks got under way, I sat down with Ildefonso Guajardo Villareal, a former secretary of the economy who led Mexico’s negotiations of the U.S.M.C.A. during his term. A short, dapper man of sixty-eight, Guajardo has been involved in every major trade accord that Mexico has signed since NAFTA. He built a reputation as a fearsome negotiator, once praised by Kushner for his ability to spin “technical issues into unsolvable deal-breakers.” Now he seemed pleased to be out of the fight. “I’ve got a trip coming up to Palm Beach,” he told me, in an airy cafeteria in Mexico City.

    [ad_2]

    Stephania Taladrid

    Source link

  • Trump’s $1.1 billion tax hike on toys and games

    [ad_1]

    Asked in April about the potential consequences of hiking tariffs on nearly all American imports, President Donald Trump delivered a memorably blunt assessment.

    “Maybe the children will have two dolls instead of 30 dolls,” Trump said during a cabinet meeting on April 30. “And maybe the two dolls will cost a couple bucks more than they would normally.”

    A “couple bucks” here and a “couple bucks” there…and eventually, that adds up to a massive tax increase.

    Federal data covering the first eight months of the year show that the government collected more than $1.1 billion in tariffs on toys, dolls, and games.

    During the same seven months in 2024, the federal government collected no revenue on imports covered by those lines in the tariff code, because toys, dolls, and similar products entered the country duty-free thanks to trade agreemens that Trump’s tariffs now supercede, explained Ed Gresser, a former assistant U.S. trade representative and vice president at the Progressive Policy Institute, in an email to Reason. (Gresser wrote a post earlier this month pegging the figure at $888 million through July, but he shared more updated figures with Reason for this post.)

    Those higher taxes paid by American importers are likely to be passed along to consumers doing their holiday shopping—and the actual total is likely quite a bit higher, since the tariff data lags by a few months.

    The direct costs of the tariffs don’t even tell the whole story. As Reason has detailed, the tariffs have created headaches for board game and toy companies across the country, as normally reliable supply chains have become more expensive and sometimes totally unworkable amid the White House’s ever-shifting tariff edicts.

    “The U.S. is our least trustworthy trading partner right now—and I say that as an American,” Price Johnson, COO of Cephalofair Games, told Reason last month. “I can’t trust what the policy is going to be tomorrow, let alone next week.”

    Two weeks ago, the Trump administration seemingly admitted that its tariffs were making some goods more expensive. The White House rolled back tariffs on coffee, bananas, and several other items. That was framed as an attempt to lower grocery prices amid rising inflation and deepening skepticism from the American public about the merits of Trump’s tariff plans.

    As Gresser notes, however, the tariffs that remain in place are in many cases bigger tax increases than the ones on goods like coffee and bananas, which have now been removed.

    “The tariff hike on toys is twice as big as that of the banana and coffee tariffs put together, and that on shoes tariff increase alone offsets the entire 238-product exclusion list,” he wrote earlier this month.

    Indeed, some limited reductions on tariffs might be welcome, but they are hardly enough: The Yale Budget Lab estimates that Trump’s tariffs will cost the average American household around $1,700 this year.

    That might explain why retailers are bracing for a less robust holiday shopping season this year. Santa Claus might be able to smuggle toys past the authorities under the cover of darkness and with the help of magic, but many American parents are facing exactly the situation that the president predicted in April: Fewer and more expensive toys this holiday season.

    [ad_2]

    Eric Boehm

    Source link

  • In tariff case, Trump’s attorneys can’t decide if foreign investment is good or bad for America

    [ad_1]

    When the Trump administration’s lawyers go before the U.S. Supreme Court on Wednesday to argue a crucial case that will determine the limits of presidential tariff authority, they will be asking the justices to accept contradictory claims about the value of foreign investment in the United States.

    In a brief filed with the court ahead of this week’s oral argument, the government’s attorneys argue that foreigners buying up American “assets” is a serious enough threat to require emergency executive powers over trade.

    “By the end of 2024, foreigners owned approximately $24 trillion more of U.S. assets than Americans owned of foreign assets,” the administration argues. That imbalance has “weakened” the United States and “created an ongoing economic emergency of historic proportions.”

    In the same brief—indeed, just four pages later—those same attorneys warn that undoing Trump’s tariffs would jeopardize “trillions of dollars” in foreign investment that the president has successfully negotiated. They point to $600 billion in investments pledged by the European Union and another $1 trillion promised by the governments of Japan and South Korea. Those investments, the administration argues, will “rectify past imbalances.”

    How can it be that previous foreign investments are a threat to the United States—one so severe as to require an unprecedented expansion of executive power—while investments secured by the administration are the exact opposite?

    “In short, their argument is that the tariffs are necessary to reduce foreign ownership of American assets, but the Supreme Court must keep the tariffs in place to allow more foreign investment,” points out an amicus brief filed by the National Taxpayers Union Foundation in support of the small businesses challenging the legality of President Donald Trump’s tariffs.

    This is probably not the most critical legal issue upon which the tariff case will be resolved. But the glaring contradiction reveals a few important things.

    First, it once again demonstrates the incoherence of Trump’s tariff strategy. Does the administration want more foreign investment or less? It’s not sure! You can add that to the list alongside such questions as “Are the tariffs meant to generate revenue for the government or serve as negotiating tools for better trade deals?” It can’t be both, since tariffs meant as negotiating tools would have to be lowered or eliminated eventually, thus rendering them useless for producing revenue.

    In a similar vein, Trump has argued that higher tariffs on legal imports from Canada, Mexico, and China will be a useful tool for combating the flow of illegal drugs. This makes little sense. Taxing maple syrup and avocados seems about as likely to stop the flow of fentanyl as taxing beer would be effective at reducing the use of cocaine.

    Second, the confusion about foreign investments in the U.S. points to Trump’s ongoing misunderstanding of the trade deficit. A trade deficit is the difference between the total value of all imports and all exports, and America indeed runs a sizable trade deficit—in other words, we import more than we export.

    As economists who understand global trade would tell you, America’s trade deficit is offset by an investment surplus. In other words, “the US is able to sustain a large trade deficit because so many foreigners are eager to invest here,” as the Boston University economist Tarek Alexander Hassan wrote in April. The Trump administration sees that routine, trade-balancing foreign investment as a problem that demands a muscular executive response. It’s not.

    Finally, the fact that the administration’s attorneys take a very different view of foreign investments secured by the president’s negotiations ought to tell us something, too. The administration is not really making an argument against foreign investment here; it is making an argument for top-down, centrally planned foreign investment that meets the chief executive’s political needs.

    When the administration says that striking down these tariffs would jeopardize “trillions of dollars” in foreign deals, what it means is that America’s investment surplus would be determined by market forces rather than the whims of the president. But as the Supreme Court will hopefully soon remind it, the Constitution plainly does not give the president unilateral power to control foreign trade or to decide which foreign investments are good for America.

    [ad_2]

    Eric Boehm

    Source link

  • ‘We proudly make things here’: California distillery owner says SCOTUS should dump Trump’s tariffs

    [ad_1]

    Melkon Khosrovian recalls waiting for a shipment of bottles that were due to arrive amid the mad rush that marked the days before President Donald Trump’s tariffs took effect.

    He remembers doing the math, too.

    “We don’t have any control over when they clear [customs], and our taxes would have been $10,000 more,” if the container holding his bottles didn’t make it before the deadline, explains Khosrovian, who co-owns the Greenbar Distillery in Los Angeles. “In the meantime, we’re sitting here chewing our fingernails and wondering what’s going on.”

    What a difference a day makes.

    Khosrovian, an Armenian immigrant, founded the distillery with his wife more than two decades ago. Theirs may not be the sort of business typically regarded as blue-collar work, but Greenbar is essentially the same as any other American manufacturing firm. Khosrovian must buy equipment and raw materials, then use them to produce new goods that he distributes down the supply chain.

    And like many other American manufacturers, he says Greenbar has suffered from Trump’s tariffs, which have made that equipment and those raw materials more expensive.

    “We’re making American products, you know, selling American products, but it involves some parts that come from abroad,” Khosrovian told Reason in an interview on Monday. That includes the Bulgarian juniper berries that form the backbone of Greenbar’s gin and the various spices that add flavor to its premixed cocktails.

    “Taxing that stuff just means that we’re weakened as a company,” he adds.

    Greenbar is one of more than 700 small businesses that have joined the We Pay The Tariffs coalition, which is backed by the Trade Partnership, a pro-trade think tank. Last week, that coalition filed an amicus brief with the U.S. Supreme Court—one of dozens of such briefs filed by a wide range of interested parties including businesses, economists, and more than 200 members of Congress—urging the justices to uphold lower court rulings that called Trump’s tariffs unlawful.

    The tariffs, which were “imposed without legal authority and with no public participation, comment, or even sufficient notice,” represent “an existential threat to survival” for many small businesses, the group argues in its brief.

    The Trump administration argues that the president has nearly unchecked authority to impose tariffs thanks to the International Emergency Economic Powers Act (IEEPA), a 1977 law Trump has invoked repeatedly since returning to office this year. Critics point out that the IEEPA statute does not even contain the word “tariff” and has never been used in this way. Lower courts have ruled that the president does not have unlimited tariff powers, even when invoking those emergency powers.

    It will be those thorny legal matters that decide the fate of Trump’s tariffs when the Supreme Court hears the case next week. However, small business owners like Khosrovian offer a reminder of what’s at stake in the case.

    Higher costs from tariffs have forced Khosrovian to look into automating part of Greenbar’s bottling process to save money, which would mean laying off some of the staff who handle that now, he says. In the competitive market for craft booze, that’s a better option than raising prices and losing market share.

    In addition to making it more expensive for American distilleries to make booze, tariffs are also reducing sales abroad. Exports of American spirits fell 9 percent year-over-year in the second quarter, according to data from the Distilled Spirits Council of the United States, a trade association.

    “Persistent trade tensions are having an immediate and adverse effect on U.S. spirits exports,” Chris Swonger, president and CEO of DISCUS, said in a statement earlier this month. “There’s a growing concern that our international consumers are increasingly opting for domestically produced spirits or imports from countries other than the U.S., signaling a shift away from our great American spirits brands.”

    The Trump administration believes it must punish American companies like Greenbar Distillery in order to solve the perceived threat of a trade imbalance. When you get right down to it, however, the execution of this policy appears somewhat ridiculous. Can empty whiskey bottles or imported juniper berries realistically be called a threat that requires such sweeping executive powers? Is forcing Khosrovian to pay higher taxes going to accomplish anything?

    “We proudly make things here, and we want to keep making more things here,” Khosrovian says. “Running a business normally is tough. Running a business where you don’t even know what things cost from day to day makes it doubly hard.”

    [ad_2]

    Eric Boehm

    Source link

  • Doug Emhoff Says Trump’s ‘Authoritarian Slant’ is Bad For Founders, IP Protection

    [ad_1]

    Former second gentleman Doug Emhoff says American competitiveness is facing great strain from the Trump administration’s repeated power grabs and its tariff policies.

    At the Inc. 5000 Conference in Phoenix, Arizona, Emhoff, a partner at the law firm Willkie Farr & Gallagher, warned that it will become increasingly difficult for entrepreneurs to protect their intellectual property if the Trump administration continues to push the limits of the law.

    Emhoff spoke on a panel examining the future of U.S. competitiveness with Inc. editor-in-chief Mike Hofman and former U.S. Senator Jeff Flake (R-AZ).

    “One of the problems with the erosion of the rule of law is all the pressure being put on it by the administration, and what’s happening with the DOJ is going to make our efforts to protect IP less predictable,” Emhoff said at the conference. “One of the great things about our system prior was our strong courts and the enforcement–both to protect your IP and to prevent people from stealing your IP–and the more that erodes here, the less protected you’re going to be.”

    President Trump has sought retribution against his enemies, law firms, and universities as some examples, in addition to rolling out executive orders that have been ruled by the courts as unconstitutional.

    It’s something entrepreneurs should pay attention to given that some 765,000 trademarks were registered in the U.S. last year. Intellectual property theft is a significant battle that the U.S. is contending with: Estimates suggest the country is losing up to $600 billion each year due to IP theft from China alone. 

    Each year thousands of disputes come before the World Intellectual Property Organization, which helps resolve IP disputes. In 2024, the group saw 6,1,68 unique cases.

    But the new age of tariffs and reshuffling of global trade is also hampering American innovation. Former Sen. Flake emphasized that if the U.S. is going to take on China, then “you want the rest of the world with you.”

    “We know that if we don’t have our allies with us, then China can go around us, and if we’re not a reliable trade partner, other countries will find China and go to them,” Flake said. “That’s my concern: We desperately need to take on China on these IP issues and some of the other issues, but let’s have our allies join us.”

    Emhoff concurs, adding that the Trump administration’s tariff policies will cause businesses to drift away from the U.S. and they will look to do business with nations abroad. That applies to talent as well.

    This isn’t just a red state or blue state issue, he added, but a bipartisan economic one. 

    Emhoff also took a jab at those who are donating to the Trump administration or those making grand contributions to advance their own business interests, nodding to the gaggle of tech CEOs who have cozied up to Trump in recent months. (There’s a bevy of tech companies including Google, Amazon, and Palantir that donated to Trump’s $300 million White House ballroom project).

    Trump is known to value loyalty and some very well might chalk it up as an added cost of doing business with an administration that doesn’t mind meddling in private business dealings.

    “Authoritarianism and corruption are not good for entrepreneurs who are out there just trying to compete the right way, the fair way,” Emhoff says. “The business community has to step up and come together because you have power,” he adds, “the power to change this.”

    [ad_2]

    Melissa Angell

    Source link

  • Trump Is Attacking Canada When He Should Be Attacking Reagan

    [ad_1]

    The Gipper loved him some free trade.
    Photo: The Independent

    One of Donald Trump’s most interesting political achievements has been to force a Republican Party that had embraced free-trade orthodoxy for many decades into supporting, or at least tolerating, his own vintage 19th-century protectionist views. Like his harsh criticism of the Iraq War launched by the last GOP president, Trump’s frequently savage words about free trade and globalization have clearly embarrassed a lot of Republicans who are old enough to remember when that kind of talk was associated with lefty union types and cranky Old Right figures like Pat Buchanan. The fact that he has now made tariff-driven trade wars the centerpiece of his second-term economic policies is often ignored by old-school Republicans, or rationalized as merely a rhetorical weapon he deploys in cutting commercial deals with other countries.

    But at least one of the Canadians who are so often an object of Trump’s protectionist belligerence is drawing attention to the 180-degree turn the 47th president executed in conservative international economic thinking, or the lack thereof. Ontario premier Doug Ford ran an ad on U.S. television networks featuring clips in which the unquestioned patron saint of pre-Trump conservatism, Ronald Reagan, loudly and proudly embraces free trade:

    Here’s what the Gipper says in the ad, which is from a 1987 speech:

    When someone says, “Let’s impose tariffs on foreign imports,” it looks like they’re doing the patriotic thing by protecting American products and jobs. And sometimes for a short while, it works — but only for a short time.

    But over the long run, such trade barriers hurt every American worker and consumer.

     

    High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars.

    Then the worst happens. Markets shrink and collapse. Businesses and industry shut down, and millions of people lose their jobs.

    Throughout the world, there’s a growing realization that the way to prosperity for all nations is rejecting protectionist legislation and promoting fair and free competition.

    America’s jobs and growth are at stake.

    Trump promptly pitched a fit at Truth Social and suspended trade negotiations with Canada:

    CANADA CHEATED AND GOT CAUGHT!!!They fraudulently took a big buy ad saying that Ronald Reagan did not like Tariffs, when actually he LOVED TARIFFS FOR OUR COUNTRY, AND ITS NATIONAL SECURITY…. Thank you to the Ronald Reagan Foundation for exposing this FRAUD.

    Actually, the Reagan Foundation complained that Ontario hadn’t asked for permission to use the clip and said it “misrepresented” the overall speech, which indeed justified the imposition of tariffs on Japan. But there’s nothing fake about the clip; Reagan was making it clear that the measures he was taking against Japan were unfortunate and temporary expedients that did not detract from his more general commitment to free trade. The 40th president did not “love tariffs for our country and its national security.” Like nearly every pre-Trump Republican leader who remembered the disastrous effects of the Smoot-Hawley Tariff Act of 1930, which helped exacerbate the Great Depression, Reagan only used trade restraints sparingly and grudgingly.

    Trump, on the other hand, has called “tariffs the most beautiful word to me in the dictionary” and believes in them not as a temporary measure or negotiating ploy but as the foundation of a good economy. He dreams of replacing the federal income tax with tariff revenues. He is precisely the sort of demagogue Reagan was speaking of as a misguided advocate of tariffs as “patriotic.”

    You can debate whether Trump is right or (as most economists believe) wrong. But you can’t debate whether he’s taken the free-trade policies of Ronald Reagan (who was particularly devoted to dismantling barriers to trade with Canada) and tossed them in a wastebasket. That may embarrass him and other Republicans, but it’s no excuse for blaming those with better memories.

    This post has been updated.

    [ad_2]

    Ed Kilgore

    Source link

  • Trump’s planned farm bailout should require congressional approval

    [ad_1]

    By hiking tariffs on nearly all imports to the United States earlier this year, President Donald Trump effectively imposed one of the largest tax hikes in American history—and did so without congressional approval.

    Now, the Trump administration is reportedly preparing to spend some of the revenue from those tax increases—also without congressional approval.

    The White House is preparing a bailout for farmers harmed by the trade war. The exact contours of the package remain unclear for now, but Politico and The Wall Street Journal both report that the administration is eying at least $10 billion in aid. We’ll know more early next week, as Treasury Secretary Scott Bessent says an announcement of “substantial support” is expected on Tuesday.

    This much seems clear: tariffs paid by American importers will be used to fund some of the bailout.

    That’s likely to happen, in part, because the slush fund that Trump tapped to bail out farmers during his first term is running dry. That fund—the Commodity Credit Corporation, a New Deal-era program within the Department of Agriculture—has just $4 billion in it, according to Politico. Meanwhile, the government has collected about $150 billion in tariff revenue during the first eight months of the year.

    It also seems likely because that’s what Trump keeps saying he wants to do. “We’re going to take some of that tariff money that we made, we’re going to give it to our farmers,” he said last month.

    Regardless of how it is funded, a farm bailout would be a wasteful and counterproductive bit of policy—and one that could inspire other tariff-hurt industries to start looking for their own handouts. If the bailout is funded with the tariff revenue (without congressional approval), then it would also be another attack on the separation of powers that are fundamental to our constitutional system of government.

    It is Congress that has the sole authority to lay and collect taxes, per Article I of the Constitution. It is also Congress that has the sole authority to determine how tax dollars are spent. If the Trump administration wants to use some of that $150 billion to bail out farmers, it must ask Congress to approve that spending—ideally as part of a budget bill, but even a one-off emergency or supplemental bill would be better than having the executive branch make this decision on its own.

    There is one other complication that should stop the administration from unilaterally spending the tariff revenue, even if the White House decides to ignore the constitutional argument.

    If the Supreme Court rules that Trump’s tariffs are unlawful—as lower courts already have—then it is possible that the federal government would have to refund all that money to the people and businesses that paid the tariffs in the first place.

    If that money has been given away to farmers, then taxpayers will be on the hook to refund the tariff payments—the same American taxpayers who are already paying higher prices because of the tariffs. That’s literally adding insult to injury.

    There is, of course, an easy way out of this mess. If the Trump administration wants to spare farmers the consequences of the trade war, it doesn’t need a messy, possibly unconstitutional bailout. It just needs to end the tariffs.

    [ad_2]

    Eric Boehm

    Source link

  • Tariffs are starting to crush America’s small liquor businesses

    [ad_1]

    The alcohol industry recently dodged an attempt to smuggle a neo-Prohibitionist agenda into the U.S. Dietary Guidelines revisions. While the industry was able to breathe a sigh of relief thanks to this rule, its reprieve has been short-lived: President Donald Trump’s tariff policies have started to hammer the industry once again.

    On August 1, a 15 percent tariff went into effect on most European goods imported to America. Despite some initial hope that alcohol might be spared as part of a Trump-E.U. trade deal, the tariff remains in effect for booze, and it’s U.S. small businesses that are bearing some of the highest costs.

    During the first Trump administration, alcohol producers were hit hard by Trump’s tariff policies, facing price increases on beer cans (from the aluminum tariffs) as well as painful retaliatory tariffs from other countries that targeted American alcohol. So far, the second Trump presidency appears to promise more of the same.  

    With the tariffs now officially in effect, small- and medium-sized wineries in California are reporting price increases on key input materials, including glass, corks, and barrels. The day after the tariffs took effect, Dresser Winery in Paso Robles, California, was informed by its Portugal-based cork maker that cork prices would increase by 15 percent—the manufacturer offered to pay 2 percent of the cost increase, leaving the winery to cover the remaining 13 percent.

    Dresser Winery also sources its glass abroad, either from China or Mexico, and its barrels come from France or Hungary. As the winery’s owner Kory Burke pointed out to The Columbian, simply swapping these goods for American-made products is far from simple. American glass bottles are expensive and harder to find, while American-made oak barrels would noticeably alter the flavor profile of the wine. Another California winery reported that the tariffs will raise their production costs by 50 cents per bottle.

    The impact on the alcohol industry started being felt even before the tariffs officially went into effect, with prominent bourbon brands such as Brown-Forman (owner of Jack Daniel’s and Woodford Reserve), Wild Turkey, and Bulleit all experiencing drops in bourbon sales over the summer in anticipation of the tariffs, partly due to export markets becoming more politically fraught. And none of this even includes the decision by Canada earlier this year to yank all U.S. alcohol from the shelves of its municipal-run liquor stores, which resulted in devastating sales declines for U.S. booze in Canada. (In 2024, Canada was the second-largest export market for American spirits.)

    There are also lesser-known effects that are starting to have an impact. As Kevin D. Williamson noted recently in The Washington Post, the American three-tier system of alcohol distribution presents particular challenges for the industry when it comes to weathering tariffs. American alcohol distributors—who operate as a government-mandated middleman between producers and consumers—often derive higher profit margins on wines coming from countries like France and Italy.

    As Williamson puts it, these imported wines help “sustain the distribution ecosystem that lower-margin U.S. producers rely on to get their products to market,” which means that “European imports don’t just compete with U.S.-made wines—they effectively subsidize their distribution.” Williamson goes on to quote an alcohol distributor who derives 75 percent of its profits from European wine. “We need French, Spanish and Italian wines to make our business work,” said Harry Root, co-founder of the South Carolina and Alabama distributor Grassroots Wine. “Remove any piece of the puzzle, and the whole thing doesn’t work.”

    The cost of tariffs on the alcohol industry is no longer merely speculative. “It has real impacts,” Burke said. “We’ve thought deeply about selling our property. We’ve thought deeply about…charging double our price for our bottle.”

    As has been the theme of Trump’s trade war, in the end, it’s American businesses and consumers that suffer.

    [ad_2]

    C. Jarrett Dieterle

    Source link

  • Trump’s tariffs have already hurt the economy—and the pain is only beginning

    [ad_1]

    The U.S. economy is already feeling the effects of Trump’s tariffs, and the Organization for Economic Cooperation and Development (OECD) projects that things could get worse.

    The OECD’s biannual interim economic outlook, published on Tuesday, forecasts U.S. growth will fall by a full percentage point from its 2024 rate. While this might not sound like much, this will translate to Americans missing out on trillions of dollars of goods and services by 2035 if this decrease in growth persists.

    From 2010 to 2019, American gross domestic product (GDP) grew by an average of 2.4 percent per year. In 2024, it grew by 2.8 percent. Now, the OECD projects that the economy will grow by only 1.8 percent in 2025 and 1.5 percent in 2026, “owing to higher tariff rates [and] moderating net immigration,” among other factors. Assuming that yearly GDP growth neither rebounds nor falls further but persists at 1.8 percent, the U.S. economy will be $2.2 trillion smaller in 2035 than it would be had President Donald Trump not adopted his protectionist policies and growth remained at 2.4 percent.

    Even though the OECD’s growth projections show the long-run macroeconomic damage of Trump’s tariffs, the American economy has remained relatively strong since he took office. The stock market is at an all-time high while inflation has been about the same as that experienced during the last year of the Biden administration: The average monthly inflation from January 2024 to August 2024, as measured by the consumer price index (CPI), was 0.2 percent. From January 2025 to August 2025, monthly CPI growth was not much higher: 0.225 percent. Meanwhile, the average monthly increase in the producer price index (PPI), which measures changes in expenses borne by American businesses, was 36 percent lower compared to the same time last year.

    The Bureau of Labor Statistics (BLS) explains that “imports are excluded from PPI.” The experimental BLS index, which incorporates imports, tells a story similar to regular PPI: this index experienced 38 percent lower inflation from January 2025 to July 2025 than it did during the same period a year ago.

    Relatively stable consumer price inflation and lower producer price inflation—excluding and including imports—under Trump are surprising. After all, the president has more than tripled the average effective tariff rate to 11.6 percent on approximately $2.2 trillion worth of imports, according to the Tax Foundation. Therefore, all things being equal, CPI and PPI should be elevated. So, why aren’t they? The answer lies in the delayed implementation of Trump’s tariffs: Although “Liberation Day” was April 2, the “reciprocal tariffs” announced then were postponed for months, finally taking effect on August 7, meaning “the full effects of tariff increases have yet to be felt,” as the OECD explains.

    While most Americans have not yet felt the tariffs’ full effects, businesses have started to. An August survey administered by the Dallas Federal Reserve found that 60 percent and 70 percent of Texas retailers and manufacturers, respectively, said that Trump’s tariffs were negatively affecting their businesses. Earlier this month, The New York Times reported that Section 232 tariffs on imported steel and aluminum have cost John Deere “$300 million so far, with nearly another $300 million expected by the end of the year.” The company has already laid off “238 employees across factories in Illinois and Iowa.” While anecdotal, John Deere’s struggles are reflected in the 48 percent lower growth in total nonfarm employment from January 2025 to August 2025 (598,000 jobs added) compared to those months last year (1.1 million jobs added).

    Trump can reverse course at any time by rolling back the Section 232 tariffs and reciprocal tariffs. Even if Trump insists on hobbling the economy with his pointless trade war, Americans could soon enjoy some relief when the Supreme Court convenes in November to hear arguments about the constitutionality of his “Liberation Day” tariffs.

    [ad_2]

    Jack Nicastro

    Source link

  • Supreme Court Will Hear Our Case Challenging Trump’s Tariffs – and Two Other Related Cases

    [ad_1]

    NA

    Today, the Supreme Court decided to review V.O.S. Selections, Inc. v. Trump, our case challenging President Trump’s “Liberation Day” tariffs. The case was filed by the Liberty Justice Center and myself on behalf of five small businesses harmed by the tariffs. It is consolidated with a similar suit filed by twelve state governments, led by the state of Oregon. Both challenge massive tariffs Trump has imposed using his supposed authority under the International Emergency Economic Powers Act of 1977 (IEEPA), and both will now be heard on the same accelerated schedule. The Supreme Court also decided to hear Learning Resources v. Trump, a case challenging many of the same tariffs, filed by two importers in a different federal court.

    We, the twelve states, and the Learning Resources plaintiffs all prevailed in the lower courts, and I hope the Supreme Court will also recognize the IEEPA tariffs are illegal for a variety of reasons. Fundamentally, these cases come down to whether the president has virtually unlimited power to impose taxes in the form of tariffs on the American people, much like an absolute monarch. The Framers of the Constitution deliberately denied the executive the kind of unbridled tax authority claimed by power-grabbing English kings, like Charles I.

    The Court’s order is short. For convenience, I reprint it here in full:

    LEARNING RESOURCES, INC., ET AL. V. TRUMP, PRESIDENT OF U.S., ET AL. [24-1287]
    TRUMP, PRESIDENT OF U.S., ET AL. V. V.O.S. SELECTIONS, INC., ET AL. [25-250]

    The petition for a writ of certiorari before judgment in No. 24-1287 is granted. The motion to expedite and the petition for a writ of certiorari in No. 25-250 are granted. The cases are consolidated, and a total of one hour is allotted for oral argument. Respondents in No. 24-1287 and petitioners in No. 25-250 shall file an opening brief on the merits on or before Friday, September 19, 2025. Any amicus curiae briefs in support or in support of neither party shall be filed on or before Tuesday, September 23, 2025. Petitioners in No. 24-1287 and respondents in No. 25-250 shall file response briefs on the merits on or before Monday, October 20, 2025. Any amicus curiae briefs in support shall be filed on or before Friday, October 24, 2025. A reply brief shall be filed by Thursday, October 30, 2025. The cases will be set for argument in the first week of the November 2025 argument session.

    The Liberty Justice Center has issued a statement about the order, which I reprint below. No one will be surprised that I agree with it! Here it is:

    Today, the Supreme Court granted the government’s expedited request for Supreme Court review (writ of certiorari) in V.O.S. Selections, Inc. v. Trump, agreeing to review whether the Trump Administration’s “Liberation Day” tariffs exceed the President’s legal and constitutional authority. Given the importance of the issues and the need for a prompt resolution, the Liberty Justice Center agreed to the government’s request.

    The Liberty Justice Center, along with legal scholar Ilya Somin, filed this case on April 14 in the U.S. Court of International Trade (CIT) on behalf of five American small businesses harmed by the tariffs. The CIT held that the International Emergency Economic Powers Act, or IEEPA, does not give the President unlimited unilateral authority to impose tariffs on the American people whenever he wants, at whatever level he wants, for whatever countries and products he wants, and for as long as he wants.

    The government appealed to the U.S. Court of Appeals for the Federal Circuit, where the Liberty Justice Center was joined by leading appellate lawyers and constitutional scholars, Judge Michael W. McConnell and Neal Katyal. And on August 29, in a 7–4 decision, the Federal Circuit affirmed the CIT’s decision, holding that IEEPA does not authorize the President’s so-called “Liberation Day” tariffs. The Supreme Court will now decide whether to affirm those rulings.

    Recognizing the urgency of the matter, the Supreme Court has now set this case on an expedited schedule, with oral argument to take place the first week of November.

    “We are confident that the Supreme Court, like the CIT and the Federal Circuit, will recognize that the President does not have unilateral tariff power under IEEPA,” said Jeffrey Schwab, Senior Counsel and Director of Litigation at the Liberty Justice Center. “Congress, not the President alone, has the constitutional power to impose tariffs.”

    The issues in the case are covered in much greater detail in our various legal filings (see the Liberty Justice Center site for a compilation), and in my earlier writings about this litigation.

    [ad_2]

    Ilya Somin

    Source link

  • The Government’s Cert Petition to the Supreme Court in Our Tariff Case – and Our Response

    [ad_1]

    NA

    Earlier this week, the Trump administration filed a petition for certiorari urging the Supreme Court to review the Federal Circuit decision in the case challenging the president’s massive “Liberation Day” tariffs, brought by the Liberty Justice Center and myself on behalf of five small businesses harmed by the tariffs (we were later joined by leading constitutional law scholars and Supreme Court litigators Neal Katyal and Michael McConnell). The government also submitted a motion for expedited review.

    Today, we submitted a response to the petition, in which we agree the Supreme Court should hear the case and resolve it quickly, so as to put an end to the harm caused by the illegal tariffs as quickly as possible. We previously prevailed in the Court of International Trade, and on appeal in the Federal Circuit, and I hope the Supreme Court – should it take the case – will rule the same way.

    Our case is consolidated with one filed by twelve state governments, led by the state of Oregon. Both challenge massive tariffs Trump has imposed under his supposed authority under the International Emergency Economic Powers Act of 1977 (IEEPA).

    By now, this litigation has generated thousands of pages of briefs and other filings, and 176 pages of judicial opinions (if I have the count right). But underneath all the legalese, the central issue at stake is actually a simple one: Does our constitutional system give one man – the president – the power to impose any tariffs he wants, in any amount, on any nation, at any time, for any reason? If the answer is “no,” then the IEEPA tariffs are illegal.

    And the answer should indeed be “no,” because the Framers of the Constitution carefully avoided giving the executive the kind of unbridled tax authority claimed by power-grabbing English monarchs, like Charles I. The president cannot wield monarchical power, and letting him do so is an affront to the rule of law.

    We have presented an assortment of more detailed reasons why “no” is the right answer to the central question raised by this case: the fact that IEEPA doesn’t even mention tariffs and has never previously been used to impose them, that there is no “unusual and extraordinary threat” of the kind required to invoke IEEPA, the major questions doctrine, the constitutional nondelegation doctrine, and more. These points are covered in much greater detail in our various legal filings (see the Liberty Justice Center site for a compilation), and in some of my earlier writings about the litigation.

    If the Supreme Court takes the case, there may well be many additional briefs, and other filings. Such materials are important. But it is also essential to remember the deeper principle underlying all the details: the president is not a king, and our Constitution does not grant him monarchical power.

    [ad_2]

    Ilya Somin

    Source link

  • The White House says Trump’s tariffs have raised $8 trillion in revenue. That’s not even close.

    [ad_1]

    The White House celebrated Labor Day by announcing that President Donald Trump’s “protectionist trade policies have helped drive more than $8 trillion in new U.S. investment.” The accompanying photo refers to “$8 trillion in tariff revenue.” There’s a difference between $8 trillion in U.S. investment and $8 trillion in tariff revenue, but Trump’s trade policies have achieved neither.

    The second claim is easier to refute. The Bipartisan Policy Center (BPC) calculates the gross tariff and excise tax revenue generated from January 1 to August 28 to be $158.8 billion, according to the Treasury Department’s Daily Treasury Statements. The customs and excise taxes collected from January 20, when Trump took office, to August 28 amount to about $156 billion.

    According to the Treasury Department’s own data, the president’s policies have clearly not raised anywhere near $8 trillion; they’ve raised 2 percent of this figure. The Congressional Budget Office estimates that the tariffs Trump has implemented since January will generate an estimated $3.3 trillion over 10 years—significantly less than the $8 trillion that the White House is claiming the tariffs have already raised.

    Gross tariff revenue isn’t even the most relevant statistic; net tariff revenue is. The BPC explains that the latter “removes ‘certain other excise tax revenue’ and accounts for refunds of tariffs,” i.e., the tariff revenue that stays in federal coffers. Although net tariff revenue is not available in the Daily Treasury Statements, the BPC was able to determine that net tariff revenue was $135.7 billion from January through July 31 using the Treasury’s Monthly Treasury Statements, which account for tariff refunds. Net tariff revenue as a percentage of total imports jumped from about 2.4 percent in March to 5.73 percent in April, reflecting the impact of Liberation Day’s “reciprocal tariffs,” and climbed to 10.31 percent in June.

    Still, the net tariff revenue of $135.7 billion amounts to 1.7 percent of the White House’s claimed $8 trillion in tariff revenue. (That’s neglecting the fact that the Joint Committee on Taxation estimates that “$1 of excise tax revenue will lead to a $0.25 decline in income and payroll tax revenue,” according to the BPC.)

    The first claim is more slippery; it’s unclear what the White House means by saying Trump’s policies “helped drive” investment. One interpretation is that it is crediting Trump’s reciprocal tariffs and hostile negotiations for producing more foreign direct investment (FDI) in the U.S. than would have otherwise existed. Even assuming that all FDI since January is the direct result of Trump’s protectionist policies, it is completely inconceivable that $8 trillion has been raised as a result.

    The Global Business Alliance, a trade association that “actively promotes and defends an open economy that welcomes international companies to invest in America,” reported $52.8 billion in FDI in the first quarter of 2025—a 34 percent decrease from 2024’s fourth quarter—citing the Bureau of Economic Analysis (BEA). The BEA has not released data for the second or third quarter of 2025, but, even if we generously assume a quarter-to-quarter doubling, meaning $100 billion in the second quarter and $200 billion in the third (of which a month remains), we reach a grand total of a little over $350 billion: 4.4 percent of Trump’s touted $8 trillion in “new investment.”

    The Labor Day post also credited Trump with “creating hundreds of thousands of jobs.” Total nonfarm employment increased by 597,000 from January 2025 to July 2025, according to the Bureau of Labor Statistics’ July 2025 report. However, total nonfarm employment increased by 1,073,000 from January 2024 to July 2024. If the White House is crediting Trump’s policies with changes in the economy, then it should recognize that they added nearly half as many jobs to the economy as the Biden administration did over the same time period last year.

    Later on Sunday, the White House said to “Trust in Trump,” sharing a screenshot of Trump’s Truth Social post where he refers to “all of the TRILLIONS OF DOLLARS we have already taken in” with tariffs. The data show that you should reject this fictitious figure, as well as his other claims that tariffs are good for the United States.

    [ad_2]

    Jack Nicastro

    Source link

  • The rationale for the federal circuit’s ‘radical left’ tariff decision is fundamentally conservative

    [ad_1]

    After the U.S. Court of Appeals for the Federal Circuit ruled against his tariffs last week, President Donald Trump repeatedly condemned the decision, which he preposterously warned will ruin the country unless it is overturned by the Supreme Court. “It would be a total disaster for the Country,” Trump wrote in a Truth Social post on Friday. “If allowed to stand, this Decision would literally destroy the United States of America.” He reiterated that claim on Sunday: “Our Country would be completely destroyed, and our military power would be instantly obliterated,” he said, adding that “we would become a Third World Nation, with no hope of GREATNESS again.”

    Trump’s prophecies of doom were not the only implausible aspect of his comments. He described the appeals court as “Highly Partisan,” implying that its reasoning was driven by political affiliation, and said the majority was “a Radical Left group of judges,” implying that the result was dictated by ideology rather than a careful consideration of the facts and the law. Trump reflexively criticizes judges who rule against him in language like this, to the point that he has stripped ideological labels of all meaning. In this case, his complaints are especially hard to take seriously.

    The Federal Circuit’s tariff decision addressed two lawsuits, one brought by several businesses and one filed by a dozen states. Both sets of plaintiffs argued that Trump exceeded his statutory authority when he relied on the International Emergency Economic Powers Act (IEEPA) to impose stiff taxes on imports from scores of countries.

    Seven members of the 11-judge panel agreed. And while it is true that six of those judges were appointed by Democratic presidents (Bill Clinton, Barack Obama, and Joe Biden), the majority also included Alan D. Lourie, who was nominated by George H.W. Bush in 1990. Notably, Lourie was also one of four judges who went further than the majority, arguing that IEEPA “does not authorize the President to impose any tariffs” (emphasis added).

    Four judges dissented, saying the plaintiffs “have not justified summary judgment in their favor on either statutory or constitutional grounds.” Two of the dissenters were appointed by George W. Bush, and two were appointed by Obama.

    These breakdowns do not support Trump’s contention that the judges chose sides based on partisan considerations, as opposed to an honest assessment of the statutory and constitutional issues. That explanation looks even less plausible as applied to the May 28 Court of International Trade (CIT) decision that the Federal Circuit reviewed. Three CIT judges, including one nominated by Ronald Reagan and one nominated by Trump himself, unanimously concluded that the president’s tariffs were not authorized by IEEPA.

    When you consider the reasoning underlying these decisions, the claim that they can be explained only by anti-Trump animus or allegiance to a “Radical Left” ideology looks even sillier. Both courts noted that Trump’s use of IEEPA, which does not mention tariffs at all, was unprecedented and involved an assertion of authority that implicated the “major questions” doctrine, which aims to uphold the separation of powers.

    According to the Supreme Court, that doctrine applies when the executive branch asserts powers of vast “economic and political significance.” In such cases, “the Government must point to ‘clear congressional authorization’ for that asserted power,” the Federal Circuit noted. “The tariffs at issue in this case implicate the concerns animating the major questions doctrine as they are both ‘unheralded’ and ‘transformative.’” The Supreme Court “has explained that where the Government has ‘never previously claimed powers of this magnitude,’ the major questions doctrine may be implicated.”

    Trump claimed to have discovered a heretofore unnoticed delegation of unlimited tariff authority in a statute that is nearly half a century old. That claim, the Federal Circuit concluded, “runs afoul of the major questions doctrine.”

    Far from the invention of “Radical Left” judges, the major questions doctrine stems from a series of Supreme Court decisions spearheaded by conservative justices. The late Antonin Scalia, whom Trump has described as the very model of a “great” jurist, explained the rationale for the doctrine this way in the 2001 case Whitman v. American Trucking Associations: “Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.”

    The Supreme Court has applied that logic in several decisions rejecting assertions of agency authority, including the Food and Drug Administration’s attempt to regulate tobacco products without explicit congressional authorization, the national eviction moratorium imposed by the Centers for Disease Control and Prevention in response to the COVID-19 pandemic, the COVID-19 vaccine mandate that the Occupational Safety and Health Administration tried to impose on employers in 2021, and the Biden administration’s student debt relief plan. Whatever you might think of those decisions, they are hardly evidence of a “Radical Left” mindset.

    As in those cases, the central question in the tariff case was whether Congress had actually delegated the broad powers claimed by the executive branch. Another issue was whether Congress could, consistent with the Constitution’s separation of powers, delegate such authority. In addition to concluding that IEEPA did not authorize Trump’s tariffs, the Federal Circuit noted that “the Government’s understanding of the scope of authority granted by IEEPA would render it an unconstitutional delegation.”

    The rationale for that ruling is not, by any stretch of the imagination, the product of “Radical Left” thinking. It is conservative in the best sense, aiming to preserve the structure of government established by the Constitution.

    [ad_2]

    Jacob Sullum

    Source link

  • The federal circuit’s tariff ruling highlights the audacity of Trump’s power grab

    [ad_1]

    In ruling against the sweeping tariffs that President Donald Trump purported to impose under the International Emergency Economic Powers Act (IEEPA), the U.S. Court of Appeals for the Federal Circuit did not settle the question of whether that law authorizes import taxes. Nor did it uphold the injunction that the Court of International Trade (CIT) issued against the tariffs on May 28. But the Federal Circuit agreed with the CIT that the tariffs are unlawful, and its reasoning highlights the audacity of Trump’s claim that IEEPA empowers him to completely rewrite tariff schedules approved by Congress.

    The decision addresses two challenges to Trump’s tariffs, one brought by several businesses and one filed by a dozen states. Both sets of plaintiffs argued that Trump had illegally seized powers that belong to Congress.

    The Constitution gives Congress, not the president, the power to “lay and collect taxes, duties, imposts and excises.” And although Congress has delegated that authority to the president in “numerous statutes,” the Federal Circuit notes in an unsigned opinion joined by seven members of an 11-judge panel, it has always “used clear and precise terms” to do so, “reciting the term ‘duties’ or one of its synonyms.” Furthermore, Congress always has imposed “well-defined procedural and substantive limitations” on the president’s tariff powers.

    IEEPA, by contrast, “neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.” Yet under Trump’s reading of the statute, it empowers him to impose any tariffs he wants against any country he chooses for as long as he deems appropriate, provided he perceives an “unusual and extraordinary threat” that constitutes a “national emergency” and avers that the import taxes will “deal with” that threat.

    To justify his tariffs, Trump declared two supposed emergencies, one involving international drug smuggling and the other involving the U.S. trade deficit. The former “emergency,” he said, justified punitive tariffs on goods from Mexico, Canada, and China, with the aim of encouraging greater cooperation in the war on drugs. The latter “emergency,” he claimed, justified hefty, ever-shifting taxes on imports from dozens of countries, which he implausibly described as “reciprocal.”

    Leaving aside the question of whether it makes sense to characterize drug trafficking and trade imbalances, both of which are longstanding phenomena, as “unusual and extraordinary” threats, Trump’s attempted power grab is striking even for him. “Since IEEPA was promulgated almost fifty years ago, past presidents have invoked IEEPA frequently,” the Federal Circuit notes. “But not once before has a President asserted his authority under IEEPA to impose tariffs on imports or adjust the rates thereof. Rather, presidents have typically invoked IEEPA to restrict financial transactions with specific countries or entities that the President has determined pose an acute threat to the country’s interests.”

    Trump claims to have discovered a heretofore unnoticed tariff power in an IEEPA provision that authorizes the president to “regulate…importation.” And that power, he avers, is not subject to any “procedural and substantive limitations” except for the pro forma requirement that he declare a national emergency based on a foreign threat. As the Federal Circuit dryly observes, “it seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs.”

    Trump’s assertion of that authority “runs afoul of the major questions doctrine,” the Federal Circuit says. According to the Supreme Court, that doctrine applies when the executive branch asserts powers of vast “economic and political significance.” In such cases, “the Government must point to ‘clear congressional authorization’ for that asserted power,” the appeals court notes. “The tariffs at issue in this case implicate the concerns animating the major questions doctrine as they are both ‘unheralded’ and ‘transformative.’” The Supreme Court “has explained that where the Government has ‘never previously claimed powers of this magnitude,’ the major questions doctrine may be implicated.”

    The Federal Circuit was unimpressed by the government’s citation of United States v. Yoshida International, a 1975 case in which the now-defunct Court of Customs and Patent Appeals approved a 10 percent import surcharge that President Richard Nixon had briefly imposed in 1971 under the Trading With the Enemy Act (TWEA). Although Nixon relied on a different statute, the government’s lawyers noted, the court concluded that the phrase “regulate importation” in TWEA encompassed tariffs.

    Even assuming that conclusion was correct, the Federal Circuit says, Yoshida “does not hold that TWEA created unlimited authority in the President to revise the tariff schedule, but only the limited temporary authority to impose tariffs that would not exceed the Congressionally approved tariff rates.” Trump, by contrast, claims IEEPA gives him carte blanche to set tariffs, regardless of what Congress has said.

    “The Government’s expansive interpretation of ‘regulate’ is not supported by the plain text of IEEPA,” the Federal Circuit says. “The Government’s reliance on the ratification of our predecessor court’s opinion in [Yoshida] does not overcome this plain meaning.” The appeals court adds that “the Government’s understanding of the scope of authority granted by IEEPA would render it an unconstitutional delegation.”

    Four judges agreed with the majority that IEEPA “does not grant the President authority to impose the type of tariffs imposed by the Executive Orders.” But they went further in a separate opinion, arguing that the statute does not authorize the president to impose any tariffs at all.

    As Reason‘s Eric Boehm notes, the appeals court nevertheless vacated the CIT’s injunction and remanded the case for further consideration in light of the Supreme Court’s June 27 decision in Trump v. CASA. In that June 27 ruling, the Court questioned universal injunctions that judges had issued in two birthright citizenship cases “to the extent that the injunctions are broader than necessary to provide complete relief to each plaintiff with standing to sue.”

    Although the Supreme Court “held that the universal injunctions at issue ‘likely exceed the equitable authority Congress has granted to federal courts,’” the Federal Circuit notes, “it ‘decline[d] to take up…in the first instance’ arguments as to the permissible scope of injunctive relief. Instead, it instructed ‘[t]he lower courts [to] move expeditiously to ensure that, with respect to each plaintiff, the injunctions comport with this rule and otherwise comply with principles of equity’ as outlined in the opinion. We will follow this same practice.”

    On remand, the Federal Circuit says, “the CIT should consider in the first instance whether its grant of a universal injunction comports with the standards outlined by the Supreme Court in CASA.” The CIT, in other words, is tasked with deciding what sort of order is appropriate to grant the plaintiffs “complete relief.” Alternatively, as Boehm suggests, Congress could intervene by asserting the tariff authority that Trump is trying to usurp.

    [ad_2]

    Jacob Sullum

    Source link