In a day, Trump has “announced” a new global tariff of 10% after the Supreme Court specifically ruled that he had no power to impose tariffs. Anybody else would at least know it was game over.
It’s also anyone’s guess whether these new tariffs will stick or can be challenged.
Trump is so heavily invested in tariffs as the one and only idea for managing trade and revenue that he simply has nowhere else to go. To back down would look weak, but there’s no way around this ruling, either.
To complicate matters, the SCOTUS ruling also means possible years of refunds to importers, which are estimated at $175 billion. This is a truly unholy administrative mess, and it’s not going to get simpler over time.
Refunding the total amount of tariffs paid could be incredibly expensive in processing alone. It was mentioned at the time the tariffs were introduced that the legality of the “economic emergency powers” was in question.
That may or may not be a basis for future legal action against the administration and set up a punitive, net-loss environment for revenue.
Trump has been “trumpeting” tariffs as the cure for America’s trade debt, and revenue problems, but the numbers have never stacked up and still don’t. The net revenue is absolutely minuscule in comparison with America’s massive debt bill.
The other problem is the sheer abrasiveness of the tariffs. These tariffs have rubbed the world the wrong way, and retaliatory tariffs are still in play.
It’s also an unmitigated disaster for the administration in terms of power projection. The tariffs were supposedly pointed at China, which has enjoyed an excellent trade surplus within 12 months of their introduction.
Having also effectively neutered revenue from the tariffs due to refunds, the question is now how the administration plans to fund spending. This is an unavoidable issues, particularly with much-hyped possible tax cuts.
It doesn’t look like a healthy budget is possible. The net result is likely to be a very unconvincing time of desperate damage control up to the midterms.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
