Section 122 of the Trade Act of 1974 lets the President impose a temporary 15 percent import surcharge for up to 150 days only when there is a “fundamental international payments problem,” specifically a large and serious United States balance-of-payments deficit, an imminent dollar crash in foreign markets, or an international payments disequilibrium that needs fixing. That language was written in the early 1970s for the old fixed-exchange-rate world under Bretton Woods. Once those rates floated freely after 1971, the crisis the statute targeted simply vanished. Under those rules, the international balance of payments is simply not a problem and is generally acknowledged as such. Even Trump’s own lawyers admitted months ago in court filings that Section 122 has “no obvious application” to ordinary trade deficits. This is not a close call; it is an intentional stretch of a never-used provision the Supreme Court just forced him to swap in after striking down his earlier IEEPA tariffs.
Tariffs are taxes on American buyers and businesses, they raise costs across the supply chain, and they distort free markets exactly the way I have warned for decades. Justifying hundreds of billions in extra costs on companies and consumers with a rule that has been dead letter for fifty years is not clever policy—it is abuse of power that threatens the separation of powers and the rule of law. Courts are already hearing challenges; they should kill this fast. Congress needs to step up, repeal or rewrite these outdated tools, and stop letting any president—Republican or Democrat—play fast and loose with our economy. Limited government and real free markets demand nothing less.
Since wireless routers transmit over radio frequencies, they must be authorized by the FCC to be sold in the U.S.; adding all new foreign-made routers to the “Covered List” means the FCC will not authorize those devices’ transmitters, effectively banning their sale or use.
The announcement specifies that this only applies to new consumer-grade devices and “does not prohibit the import, sale, or use of any existing device models the FCC previously authorized.” It also notes that manufacturers who apply for exemptions on new models can be “granted ‘Conditional Approval’ after finding that such device or devices do not pose such unacceptable risks.”
Perhaps unsurprisingly, the ban will likely make it more difficult for Americans to get wireless routers.
The problem is that banning all foreign-made routers means banning practically all routers. Most manufacturers, including the three largest, make their products overseas.
I want to point to a submission for the record by Bryan Riley of the National Taxpayers Union that deserves attention because virtually everything in it has been documented, warned about, and ignored for years.
Riley’s testimony is concise. He makes three points. First, Ex–Im’s mission creep is real: In 2022, the bank bypassed Congress and expanded from export-financing into subsidizing domestic manufacturing through its “Make More in America” initiative — a program with no direct export requirement and no congressional authorization. Second, the bank hides the true cost of its lending from taxpayers by using Federal Credit Reform Act accounting instead of fair-value accounting. Under FCRA, Ex–Im’s projected $16 billion loan book looks like a $600 million moneymaker for the government. Under fair-value, which is the method that accounts for market risk the way a private lender would, it is an estimated $200 million subsidy, or cost. Third, Congress has called for negotiations to eliminate predatory export subsidies since the Carter administration. Decades later, those negotiations have produced nothing.
The mission-creep problem did not begin with “Make More in America.” It is the defining feature of an institution that has spent nine decades attaching itself to whatever policy priority dominates the headlines. In 2019, it was competing with China. Congress gave Ex–Im a seven-year reauthorization and a brand-new strategic mandate: the China and Transformational Exports Program, with a $27 billion target; 20 percent of the bank’s total lending authority.
Sen. Elizabeth Warren (D-Massachusetts) inserted a provision that would require any build-to-rent homes to be sold within seven years of construction. This is a way many families can afford somewhere to live who otherwise couldn’t afford a down payment, but the seven-year cap means the builders won’t necessarily have enough time to recoup their investments, which will discourage them from starting construction in the first place.
Pro-housing groups from across the country and the political spectrum have warned that it would restrict supply. Even if build-to-rent homes do still get built, the families living in them who couldn’t afford to buy would effectively be evicted by an arbitrary deadline from the federal government.
Sen. Brian Schatz (D-Hawaii) said the measure demonizes people who want to build rental housing. He initially assumed the build-to-rent provision was such bad policy that it must have been “a drafting error,” only for Warren to clarify that it was actually “quite deliberate.”
Jerusalem Demsas is also critical of Elizabeth Warren’s ignorant obstinance on this housing matter: (HT Scott Lincicome)
Warren seems like a uniquely bad actor in the housing policymaking space.
A hostility towards negotiation and a reluctance to accept that there could be any sort of thing as good faith disagreement.
Good on [Brian] Schatz for standing strong here.
John Stossel, as usual, is right:
Politicians say they can “make the economy work better.”
I once believed they could.
But years of reporting taught me that politicians’ attempts to “fix” the economy usually make things worse.
Trial lawyers will now use the L.A. verdict in advertisements to recruit more plaintiffs. They may even use the social-media platforms to advertise. Unemployed? Depressed? Spend your Friday nights scrolling? You could make big money by holding billionaires responsible for your problems.
Trial lawyers and juries may figure that Big Tech companies can afford to pay, but extorting companies is certain to have downstream consequences. Meta and Google are spending hundreds of billions of dollars on artificial intelligence this year, which could have positive social impacts such as accelerating treatments for cancer.
