Only the dead have seen the end of tariffs.*
Lifted in toto from ZeroHedge, February 20:
The Supreme Court on Tuesday struck down Trump's tariffs. In a 170-page decision and a 6-3 vote, the court ruled that Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) - which constitute about half of the tariffs we've seen under Trump - was not lawful.
"IEEPA does not authorize the President to impose tariffs," wrote the court.
The ruling stems from a consolidated challenge brought by small businesses and multiple states, who argued that the statute - originally intended to authorize sanctions and asset freezes during national emergencies - does not grant the executive branch the power to levy taxes on imports. Writing for the majority, the Court emphasized that the Constitution vests Congress alone with the authority to impose duties and tariffs, and found that IEEPA’s authorization to “regulate … importation” cannot be interpreted to include the distinct taxing power required to enact broad-based tariffs. As a result, the Court affirmed lower-court rulings blocking the challenged measures, concluding that the administration’s emergency-based tariff framework exceeded the limits of the statute.
Trump invoked IEEPA to impose his 'reciprocal' tariffs on nearly every foreign trade partner to address what he called a national emergency over US trade deficits. He invoked it again to impose tariffs on China, Canada and Mexico over fentanyl trafficking into the United States.
During arguments on Nov. 5, the court seemed skeptical over Trump's authority to use IEEPA, leading most observers observers, including betting markets, to conclude a high probability they're struck down at least in part. The Trump administration is appealing lower court rulings that he overstepped his authority, while Trump himself said a Supreme Court ruling against the tariffs would be a "terrible blow" to the United States.
Other Options
That said, even if that happens, the Trump administration has several other legal avenues they can pursue. As Deutsche Bank noted last month;
For instance, the sectoral tariffs (e.g. on steel and aluminum) aren’t covered by the court ruling, whilst another option would be to use Section 122 of the 1974 Trade Act, which permits temporary 15% tariffs for 150 days.
And Goldman:
This won’t be the end of tariffs… the administration will almost certainly roll out alternative legal frameworks. Net result is probably slightly fewer tariffs, materially more trade uncertainty, and some incremental deficit concerns. Net-net, that’s mildly supportive for equities and mildly negative for bonds… but largely priced for both.
The cases under consideration by the Supremes were brought by businesses affected by the tariffs and 12 mostly blue US states.
*Once again repurposing Santayana's pithy little aphorism: "Only the dead have seen the end of war."
"Only the dead have seen the end of war".
attributed to Plato from the 1930s on, especially following a speech by General Douglas MacArthur at West Point, 12 May 1962 crediting him, but not found in Plato's works; Santayana is the earliest known sourceSoliloquies in England and Later Soliloquies (1922) ‘Tipperary’
