by
MANDEL
NGAN/AFP
via
Getty
Images)
President
Donald
Trump’s
signature
tariffs
are
being
scrutinized
by
the
Supreme
Court
after
they
were
struck
down
by
both
the
Court
of
International
Trade
and
the
Court
of
Appeals
for
the
Federal
Circuit.
Many
commentators
believe
a
decision
could
come
as
soon
as
the
end
of
the
year,
and
the
high
court
will
not
uphold
the
tariffs.
But
Trump
claims
that
even
if
he
loses,
he
has
other
ways
to
keep
the
tariffs
in
place,
potentially
shifting
to
alternative
legal
authorities
like
Sections
232
or
301
of
existing
trade
laws.
So
what
is
Trump
trying
to
accomplish
with
the
tariffs?
Have
they
worked
so
far?
And
what
should
Trump
do
if
they
are
overturned?
Since
the
1980s,
Trump
has
complained
that
the
rest
of
the
world
was
taking
advantage
of
the
U.S.
or
even
“ripping
the
country
off”
through
what
he
thinks
are
lopsided
trade
deals.
He
also
said
that
the
North
American
Free
Trade
Agreement
ratified
in
1994
was
the
worst
deal
ever
made
because
it
led
to
higher
trade
deficits
with
Canada
and
Mexico.
Also,
NAFTA
resulted
in
lost
U.S.
jobs
because
large
businesses
moved
their
manufacturing
to
Mexico
due
to
that
country’s
cheaper
labor
costs.
During
his
first
term,
Trump
issued
tariffs
but
they
focused
only
on
a
few
countries.
But
the
most
publicized
tariffs
were
those
imposed
on
China,
which
led
to
retaliatory
tariffs
(particularly
on
products
made
in
red
states)
and
a
trade
war.
He
also
renegotiated
trade
deals
with
Canada
and
Mexico
by
replacing
NAFTA
with
the
new
U.S.-Mexico-Canada
agreement
or
USMCA.
But
during
his
second
term,
Trump
issued
tariffs
on
almost
every
country,
calling
it
“Liberation
Day.”
The
tariffs
ranged
from
10%
to
over
50%.
Only
a
few
countries
were
exempt
from
Liberation
Day
tariffs,
notably
Mexico
and
Canada
due
to
their
existing
agreements
under
USMCA.
Curiously,
North
Korea,
Cuba,
Russia,
and
Belarus
(known
for
having
very
close
ties
with
Russia)
were
exempt
from
Liberation
Day
citing
existing
sanctions
which
made
the
tariffs
redundant.
As
legal
support,
Trump
mainly
relied
on
the
International
Emergency
Economic
Powers
Act
(IEEPA).
IEEPA
does
not
explicitly
allow
the
president
to
issue
tariffs.
But
it
states
that
the
president
can
only
regulate
imports
to
deal
with
an
unusual
or
extraordinary
threat.
Trump
has
stated
on
numerous
occasions
that
he
believes
the
trade
deficits
are
a
threat
to
national
security,
even
though
none
of
his
predecessors
did.
Because
of
the
unclear
statutory
language,
the
Supreme
Court
will
decide
(among
other
issues)
whether
the
major
questions
doctrine
applies
to
the
tariffs.
Do
the
tariffs
have
such
a
large
political
or
economic
significance
to
require
clear
Congressional
authorization?
The
major
questions
doctrine
was
famously
applied
to
disallow
former
president
Joe
Biden’s
$10,000
cancellation
of
federal
student
loans.
Biden’s
loan
cancellation
program
is
estimated
to
have
cost
half
a
trillion
dollars.
The
Liberation
Day
tariffs
so
far
has
brought
in
over
$250
billion
to
date,
and
President
Trump
has
bragged
that
the
tariffs
could
bring
in
$1
trillion.
So
how
have
the
Liberation
Day
tariffs
done
so
far?
A
Yale
Budget
Lab
study
believes
the
average
household
will
lose
$2,700
in
purchasing
power
in
2025
due
to
the
tariff’s
inflationary
effect
on
prices.
This
adds
to
the
existing
inflation
problem
that
started
a
few
years
ago.
Trump’s
response
has
been
to
blame
the
inflation
on
former
president
Biden.
Several
countries
have
imposed
retaliatory
tariffs
on
American
goods.
In
response
to
the
price
increases,
Trump
proposed
issuing
$2,000
refund
checks
to
every
middle-class
American,
which
could
put
a
large
hole
on
the
tariff
income.
The
rich
would
not
be
eligible,
although
no
income
cutoff
amount
has
been
stated.
He
has
also
repealed
some
tariffs
on
food
products
in
an
attempt
to
stabilize
prices.
And
if
prices
are
still
too
high,
maybe
Trump’s
idea
of
50-year
mortgages
can
help
(or
not).
If
the
commentators
are
right
and
the
Supreme
Court
strikes
down
the
tariffs,
what
should
Trump
do?
First,
I
suggest
not
making
any
quick
and
rash
decisions.
Right
now
is
the
time
for
gift
giving
and
holiday
shopping.
New
tariff
announcements
during
this
time
could
result
in
retail
stores
issuing
price
hikes
in
a
panic.
So
wait
a
few
months
while
Americans
shop
and
later
pay
down
their
unusually
large
credit
card
bills
before
issuing
new
tariffs.
Second,
Trump
should
be
smart
about
issuing
new
tariffs.
If
the
goal
is
to
balance
trade
deficits,
then
target
tariffs
only
on
specific
goods
to
address
that.
Tariffs
applied
with
surgical
precision
can
result
in
minimal
price
increases
and
less
likelihood
of
lawsuits.
If
the
goal
is
revenue
generation,
then
tell
the
Republican
majority
Congress
to
send
a
tariff
bill
to
his
office
to
sign.
Trump’s
Liberation
Day
tariffs,
while
it
seems
to
have
good
intentions,
are
on
shaky
legal
ground.
It
also
created
short-term
price
increases
at
a
time
where
Americans
have
suffered
large
inflation
spikes
over
the
past
few
years.
And
it
has
also
jeopardized
relationships
with
allies.
A
Supreme
Court
rebuke
could
catalyze
smarter
reinstatement,
focusing
on
precision
to
balance
trade
and
shield
Americans
from
inflation’s
bite.
Steven
Chung
is
a
tax
attorney
in
Los
Angeles,
California.
He
helps
people
with
basic
tax
planning
and
resolve
tax
disputes.
He
is
also
sympathetic
to
people
with
large
student
loans.
He
can
be
reached
via
email
at [email protected].
Or
you
can
connect
with
him
on
Twitter
(@stevenchung)
and
connect
with
him
on LinkedIn.