Maybe the tariffs’ most absurd aspect is that they’re being imposed on wood products for supposed “national security” reasons, pursuant to Section 232 of the Trade Expansion Act of 1962. That law, you may recall, is also the foundation for Trump’s tariffs on steel, aluminum, automotive goods, and copper, as well as pending cases on semiconductors, drones, minerals, heavy-duty trucks, and a range of other products that have at least a plausible connection to the production of U.S. defense goods and military preparedness more broadly. Those cases have major practical and economic flaws, but one could say they pass a “smell test” for some sort of security-related nexus.
As I explained when the wood tariffs case was first announced, however, there’s no plausible case for wood imports to be a national security risk:
If war broke out tomorrow, there’d be zero concern about American “dependence” on foreign lumber or furniture, and domestic sources would be quickly and easily acquired. (We have lots of trees, and these industries neither involve advanced technology nor are highly capital intensive.) Furthermore, nearly half of total US lumber imports come from Canada, a longstanding military ally and close trading partner.
The new Federal Register notice announcing the tariffs reinforces this conclusion. It simply asserts that wood imports are a threat because they’re used by the “Department of War” and in “critical infrastructure sectors” that, if destroyed, “would have a debilitating effect on the national security, economic welfare, or national public health or safety of the United States.” Yet, even leaving aside my initial point (and that freer access to low-cost wood from Canada and elsewhere would actually boost U.S. rebuilding efforts), the FR notice’s very next paragraph acknowledges that “the United States possesses ample raw materials and industrial capacity to meet domestic wood products demand.” In other words, even granting the absurd premise that wood imports might be a security threat, American companies are currently providing the wood the nation (supposedly) needs.
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Research from UBS indicates that the new Section 232 tariffs on wood products will add another $1,000 to the cost of building a home, on top of the $8,000 in tariff costs we’ve already seen this year. That might not sound like a lot, but—as we discussed last year—it can have an effect on the margins, discouraging the construction of lower-end starter homes (where costs matter more) or pushing buyers out of certain local markets entirely—especially when coupled with land use, labor, permitting, and other policies that further boost U.S. construction and housing costs. As the New York Times notes, the hit will be particularly bad for lower-income consumers “who buy premade cabinets, vanities or mass-market furniture from the Home Depot and other big-box stores” and in California, where “so many homeowners are rebuilding after devastating wildfires.” And, as usual, the tariffs directly contradict another Trump administration priority: boosting homeownership and housing affordability.
I guess the White House will stow that “national housing emergency” they’d been considering.
H. L. Mencken, the Sage of Baltimore, grounded American democracy in the notion that the “common people know what they want and deserve to get it good and hard.” Critics have used that intuition to throw tariff shocks back in the faces of Trump backers. “You voted for this,” comes the refrain.
That is not entirely true or fair. Yes, enough people in enough states voted to send Donald Trump back to the Oval Office after one term spent in the penalty box, but they did so for different reasons and without good alternatives, at least on this issue. The Biden administration, whose policies Trump opponent and Vice President Kamala Harris embraced, was hardly a champion of free trade.
President Joe Biden kept in place many of Trump’s first-term tariffs and also enacted additional ones. Last September, Biden’s Office of the United States Trade Representative announced more China sanctions: new tariffs on metals, microchips, electric vehicles, batteries, critical minerals, and other tech and medical products.
Even the Biden administration’s feints in the direction of free trade were weak and did nothing to pull nations away from China’s sphere of influence and toward the U.S. In December, the first agreement under the U.S.-Taiwan Initiative on 21st Century Trade became law. “The agreement is not a conventional free trade agreement and it does not address market access issues,” explained Sheng Lu, a business professor at the University of Delaware. Rather, it continued the lamentable trend of making trade agreements about many other issues — so that free trade gets squeezed out.
The tariffs leveled by the first Trump administration were demonstrably bad for the U.S. economy. “The full incidence of the tariffs has fallen on domestic consumers and importers so far, and our estimates imply a reduction in aggregate US real income of $1.4 billion per month by the end of 2018,” wrote economists Mary Amiti, Stephen J. Redding, and David E. Weinstein in the Journal of Economic Perspectives.
Bradley Smith and Eric Wang report this good news:
Remember the Internal Revenue Service scandal of 2013, when it came out that the IRS under the Obama administration had targeted conservative nonprofits for harassment? In a little-noticed but immensely consequential First Amendment decision Sept. 30, a federal judge ruled that the IRS regulations on nonprofits’ political activity are unconstitutional.
It’s a major free-speech victory nearly 15 years in the making. In the case, Freedom Path v. IRS, Judge Jia M. Cobb, a Biden appointee, concluded what the nonprofit community has long known: The IRS rules concerning whether certain nonprofit organizations have engaged in too much political activity are unworkable and unconstitutionally vague.
At the heart of the case is Section 501(c)(4) of the tax code, which mainly addresses social-welfare organizations and advocacy groups. Under IRS rules, a 501(c)(4) organization must be “primarily engaged” in promoting the “common good and general welfare” of society, but not “political campaign” activity.
The problem Freedom Path and other 501(c)(4)s face is simple: They can’t tell what’s legal. The IRS has never defined how much political activity is too much. And even if a group knew the amount of political activity allowed as a percentage of total activities, it still wouldn’t know what qualifies as political. The agency uses an open-ended 11-factor test to determine what counts as “political activity,” without explaining how these factors are weighted or applied.
Judge Cobb ruled that these twin deficiencies “exhibit signs of impermissible vagueness. Taken together, they cross the line into unconstitutionality.” The judge also found a record of “selective enforcement” that “solidifies this vagueness finding,” pointing to the IRS’s targeting of tea-party-aligned 501(c)(4)s during the early 2010s.
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The Freedom Path decision presents Congress with an opportunity to stop the IRS from using the tax code to police political debate.
Damon Root is right that “Amy Coney Barrett is right to reject ‘common good constitutionalism.'” A slice:
Barrett is wise to reject “common good constitutionalism.” The innocuous-sounding concept largely stems from the work of right-wing Harvard law professor Adrian Vermeule, who has urged conservatives to reject originalism and embrace “authoritative rule for the common good” in its place.
What counts as the “common good”? For Vermeule, it seems to mean aggressive government action in support of various right-wing goals, all to be carried out free from any pesky restrictions imposed by the original meaning of the Constitution.
Chris Edwards makes clear that air-traffic control need not be a governmental operation. A slice:
The core problem is that America’s ATC is run by the government. It does not have to be—dozens of nations have separated their ATC from government budgets and bureaucracies. Canada, for example, privatized its ATC in 1996 as a self-funded nonprofit corporation. The system earns revenues by direct charges on aviation users, without the need for subsidies.
The US ATC system, run by the Federal Aviation Administration (FAA), suffers from politicized decisions on investment, employment, and restructuring. By contrast, the private Canadian system has delivered safe, efficient, and innovative services for three decades.
