Earlier today, a three-judge panel of the US Court of International Trade heard oral arguments in the case challenging Donald Trump’s massive “Liberation Day” tariffs brought by the Liberty Justice Center and myself on behalf five US businesses harmed by the tariffs. The Administration claims that the President’s imposition of 10% or higher tariffs on virtually every nation in the world is authorized by the International Emergency Economic Powers Act of 1977 even though IEEPA doesn’t mention tariffs at all, and its invocation requires the existence of a “national emergency” and an “unusual and extraordinary threat” to the United States.
Audio of the oral argument is available at the Court of International Trade website. It’s generally difficult to predict the the outcome of a case based on oral argument. Judges will sometimes rule on issues that get little or no play in argument. Still, I was encouraged by the fact that all three judges seemed skeptical of the government’s claim that IEEPA gives the president virtually unlimited power to impose tariffs. And, as we have argued from the beginning, the government’s position amounts to saying that the president can impose tariffs of any amount, on any nation, at any time, for as long as he wants.
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I have gone over the legal issues in the case in greater detail in my Lawfare article, “The Constitutional Case Against Trump’s Trade War.” See also my post on why these sweeping tariffs threaten the rule of law.
Colin Grabow tells the tale of two trade deals. A slice:
One hopeful theory behind the Trump administration’s “Liberation Day” tariff increases was that they were a negotiating tool to ultimately produce a more open trade environment. The tariffs would bring other countries to the negotiating table, deals to open foreign markets would be concluded, and the tariffs would be removed. Freer and more open trade would prevail.
Well, so much for that.
Last Thursday, the Trump administration announced its first trade deal since its April 2 tariff hike, and it’s clear that higher tariffs are here to stay. Reached with the United Kingdom, the deal — billed by the White House as “historic” and a “breakthrough” — improves trade conditions only relative to the upheaval of recent weeks. Compared to the trade conditions that prevailed when Trump took office in January, there is little to celebrate.
I’ve had a number of pro-Trump friends assure me that Trump has a grand strategy and that at the end, other countries will have lower tariffs than before on our exports and we will have lower, or no higher than earlier, tariffs on imports from them. As Grabow points out, that’s not consistent with the Trump administration messaging. They seem to be settling on a minimum tariff rate of 10%. 10 is more than 3.3.
Trump sometimes asks if we’re tired of all this winning. I certainly am.
Postscript: Trump loves to say that “tariffs” is the most beautiful word in the dictionary. So try this experiment. Recognize that tariffs are taxes. What would you think of someone who says “taxes” is the most beautiful word in the dictionary?
John Stossel busts three myths about tariffs.
Michael Lucchese reminds us of Winston Churchill’s case for free trade. A slice:
Next, Churchill argued that high protective tariffs were a tax on workers and small firms for the perverse benefit of monopolistic cartels. “Here and there no doubt individuals will make great fortunes,” he went on to say, “But the small producer is very likely to lose and to be absorbed … in some great and greedy combine, and instead of being an independent producer standing on his own legs he will find himself a salaried servant of some great syndicate.” Churchill understood not only that small firms flourish through free trade, but also that they are the kind of businesses most people want to work for or even own. Rather than fall back on dry economic theory or the abstractions on which so many free traders rely, he instead chose to offer an aspirational vision of broad property ownership and an entrepreneurial spirit that had a far more expansive appeal because it answered the actual concerns of real voters.
Churchill made sure to couch all of these arguments in the most commonsensical terms possible. Take, for example, what is perhaps the most celebrated passage of the Manchester speech:
It is the theory of the Protectionist that imports are an evil. He thinks that if you shut out the foreign imported manufactured goods you will make these goods yourselves, in addition to the goods which you make now, including those goods which we make to exchange for the foreign goods that come in. If a man can believe that he can believe anything. We Free-traders say it is not true. To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle.
Unfortunately, Trump’s tariffs are getting in the way of both. His scattershot tariff announcements have many Republicans scared about political fallout from a slowing economy. Any political capital that is spent on assuaging concerns over tariffs can’t be spent on the reconciliation bill.
Republicans criticized Democrats for obscuring the cost of their Build Back Better bill’s costs by phasing out the entitlement expansions and transfer payment increases after a few years. Now they are doing the same. The tax exemptions will invariably be extended, and you can bet Mr. Vance will campaign on them in 2028.
Ditto for the bill’s new $1,000 government payments for babies born through Dec. 31, 2028. Such “MAGA accounts” would be another layer on the entitlement state, and Democrats will be all too happy to throw in more taxpayer money when they return to power.
National Review‘s Jeffrey Blehar is rightly appalled at Trump’s airplane deal with Qatar. A slice:
Are you worried about the idea of the president flying around in a plane donated to America by a nation known both for its massive Washington “influence operation” and its friendliness with major terrorist groups in the Middle East? Then fear not, for this gift is only “temporary” and shall remain unsullied by future, less worthy presidents: Trump, according to reports, will retire it from federal service and transfer ownership to himself, under the nominal institutional control of his presidential library. “Only a stupid person” would refuse such a gift, he says. So what’s your problem, huh? You’re not stupid, are you?
No, I am not, which is why I refuse to be condescended to by either Trump or his defenders. Your lyin’ eyes are not deceiving you: This is exactly what it looks like, it is utterly appalling, and if you tolerate it or make lazily partisan excuses to justify it, then you will deserve what inevitably comes next.
I don’t want to repeat everything Jim Geraghty wrote yesterday morning, so I will summarize bluntly: This is a transparent attempt at an international bribe — a personal gift to the president to curry future favor — so much so that I don’t see the point in pretending it to be anything but one. Even if you personally believe Trump to be as incorruptible as Robespierre — even if you are that willfully ignorant of his entire history of business dealings — the terrible optics and moral hazards of a president accepting his own personal Air Force One from a nation of shady oil billionaires are beyond obvious.
And what’s despairingly amusing about it, as Jim amply documents, is just how blatant the corruption is.
