WEBVTT - Instant Reaction: Trump's Global Tariffs Struck Down By Supreme Court 0:00:02.480 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:09.160 --> 0:00:13.800 This is a breaking news update from Bloomberg instant reaction 0:00:14.080 --> 0:00:17.919 and analysis from our three thousand journalists and analysts around 0:00:17.960 --> 0:00:18.439 the world. 0:00:19.680 --> 0:00:22.960 US Supreme Court struck down President Donald Trump sweeping global tariffs, 0:00:23.040 --> 0:00:26.800 undercutting his signature economic policy and delivering his biggest legal 0:00:26.840 --> 0:00:29.160 defeat since he returned to the White House. Tyler Kendall, 0:00:29.160 --> 0:00:32.479 Bloomberg News White House correspondent joins his hair Washington correspondent. 0:00:32.960 --> 0:00:35.000 Tyler give us the latest on what we know about 0:00:35.000 --> 0:00:36.240 this Supreme Court ruling. 0:00:36.479 --> 0:00:38.360 So it appears that the Court, in a six to 0:00:38.440 --> 0:00:42.080 three decision struck down President Trump's tariffs, those broad based 0:00:42.120 --> 0:00:44.960 ones that have to do with IIPA, the International Emergency 0:00:45.000 --> 0:00:51.120 Economic Powers Act. President put forward IIPA tariffs on two accounts. 0:00:51.800 --> 0:00:56.280 One was those ventanyl related tariffs related to Canada, Mexico, 0:00:56.360 --> 0:00:59.160 and in part on China. And then the other were 0:00:59.240 --> 0:01:03.000 the more broad based ones where he cited persistent trade imbalances. 0:01:03.120 --> 0:01:06.760 Now we're still going through this cases coming in in 0:01:06.840 --> 0:01:10.360 real time right now to figure out the two questions 0:01:10.400 --> 0:01:12.600 that were in front of the court. One was does 0:01:12.640 --> 0:01:16.240 President Trump actually have the authority to invoke AIPA to 0:01:16.360 --> 0:01:19.319 impose tariffs, because this has never been done before. This 0:01:19.400 --> 0:01:23.000 is typically a federal authority that is used to invoke sanctions. 0:01:23.080 --> 0:01:26.280 So the question here is whether or not he circumvented Congress. 0:01:26.319 --> 0:01:29.080 The other question was about whether or not he actually 0:01:29.160 --> 0:01:32.800 invoked AIPA correctly if he's able to by declaring these 0:01:32.880 --> 0:01:37.240 national emergencies, did those national emergencies related to betanal related 0:01:37.280 --> 0:01:41.240 to these trade imbalances reached a legal standard of what 0:01:41.440 --> 0:01:44.760 is known as an unusual and extraordinary threat, that the 0:01:44.800 --> 0:01:49.360 president would have this authority to impose a tariff a 0:01:51.280 --> 0:01:54.760 regulation of commerce in this way to achieve his objection, 0:01:55.720 --> 0:01:59.160 his objectives. We're still reading through this, but it appears 0:01:59.200 --> 0:02:04.160 that we have one at least dissenting opinion was from Cavanaugh, 0:02:04.320 --> 0:02:08.800 of course, a Justice Brett Kavanaugh, who was appointed under 0:02:08.840 --> 0:02:11.960 nominated under President Trump, who says, quote, the court says 0:02:12.000 --> 0:02:14.720 nothing today about whether and if so, how the government 0:02:14.840 --> 0:02:17.480 should go about returning the billions of dollars that it 0:02:17.520 --> 0:02:20.720 has collected from importers. But that process is likely to 0:02:20.760 --> 0:02:24.320 be a mess, as was acknowledged at oral arguments. So 0:02:24.360 --> 0:02:26.880 that's going to be the entire next phase of this. 0:02:27.639 --> 0:02:30.320 It doesn't seem to matter to investors, at least for 0:02:30.360 --> 0:02:32.240 the moment. You look at the S and P five hundred. 0:02:32.680 --> 0:02:34.520 It did shoot up, it's come back a little bit. 0:02:34.560 --> 0:02:36.880 But what's notable here, Paul, is that the best performing 0:02:36.919 --> 0:02:39.920 group among twenty four groups is a consumer durable and 0:02:39.919 --> 0:02:43.680 apparel's group, lul Lemon, for instance, jumping about five percent 0:02:43.760 --> 0:02:45.680 right at the open. It's pared some of that advance 0:02:45.760 --> 0:02:49.000 to two point four percent. Lululemon, along with other companies 0:02:49.040 --> 0:02:54.079 presumably hurt by this by these tariffs, would benefit therefore 0:02:54.480 --> 0:02:57.200 with the removal of these tariffs, although as Tyler made clear, 0:02:57.560 --> 0:02:59.920 it's not clear whether there would be a refund or 0:02:59.880 --> 0:03:01.960 how that would even be put together. 0:03:02.160 --> 0:03:03.680 Yeah, and I'm just kind of reading some of the 0:03:03.680 --> 0:03:08.480 Bloomberg headlines. Supreme Court does not address eligibility for tariff refunds, 0:03:09.000 --> 0:03:11.600 and Bloomberg new is also reporting that hundreds of teriff 0:03:11.600 --> 0:03:15.320 refund lawsuits pending in US Trade Court. So Tyler, this 0:03:15.560 --> 0:03:19.120 seems like that's where the rubber meets the road. To 0:03:19.160 --> 0:03:22.040 the extent that anybody's going to try to get a 0:03:22.080 --> 0:03:25.200 tariff relief or tariff refunds, it's not going to be 0:03:25.200 --> 0:03:26.480 easy at least at this stage. 0:03:26.520 --> 0:03:29.280 Well, if you want to hear a pretty startling statistic, 0:03:29.400 --> 0:03:32.120 AIPA terraffs have been collected for more than three hundred 0:03:32.200 --> 0:03:35.920 and one thousand importers, and every company that wants a 0:03:35.920 --> 0:03:38.880 refund would need a distinct claim in court. Perhaps we'll 0:03:39.080 --> 0:03:41.480 likely see a class action lawsuit that could maybe put 0:03:41.480 --> 0:03:44.280 this a little bit more broad based. But when we're 0:03:44.320 --> 0:03:46.960 looking at just a massive amount of revenue that was 0:03:47.040 --> 0:03:49.680 raised by these IEPA tariffs alone. Of course, the Trump 0:03:49.720 --> 0:03:53.320 administration has other tariff authorities that are already in place 0:03:53.400 --> 0:03:56.360 Section two thirty two related to national security, for example, 0:03:56.640 --> 0:03:59.800 those AIPA broad based tariffs brought in last year more 0:03:59.800 --> 0:04:03.320 than one hundred and thirty four billion dollars for the 0:04:03.480 --> 0:04:06.960 US government. So it's going to be a complicated process. 0:04:07.640 --> 0:04:11.360 It likely would leave the question of refunds to a 0:04:11.600 --> 0:04:14.640 lower court, most likely the Court of International Trade, which 0:04:14.680 --> 0:04:18.960 first took up this case. There's a few different wonky 0:04:19.000 --> 0:04:21.640 points that I had written down here on how this 0:04:21.640 --> 0:04:24.560 could ultimately end up happening. One thing to know is 0:04:24.560 --> 0:04:27.280 that there's something known as the liquidation process, which basically 0:04:27.360 --> 0:04:30.480 is the statue of limitation that a company can ask 0:04:30.560 --> 0:04:33.760 for its money back. That's three hundred and fourteen days. 0:04:33.920 --> 0:04:36.200 So some of those tariffs imposed on China have actually 0:04:36.200 --> 0:04:40.120 been imposed longer than that, so those companies wantn't get 0:04:40.120 --> 0:04:42.280 those back. But by and large, I think we're still 0:04:42.320 --> 0:04:46.320 within that timeframe for these companies to ask for those requests. 0:04:46.080 --> 0:04:48.679 And just the quick mention equities building on their advance 0:04:48.680 --> 0:04:50.480 a little bit. With the SMP five hundred now up 0:04:50.520 --> 0:04:54.120 a third of one percent, Treasury yields are higher, and 0:04:54.600 --> 0:04:57.080 the thinking is that the removal of tariffs would leave 0:04:57.120 --> 0:05:00.320 a budget hole that we know already surprise the hundred 0:05:00.320 --> 0:05:04.800 thirty billion dollars as of December. Treasury would need to 0:05:05.400 --> 0:05:07.120 sell a lot more bonds to bridge the gap, and 0:05:07.160 --> 0:05:10.360 that would put some pressure on yields upward pressure and 0:05:10.520 --> 0:05:12.840 of course if there are reefusts as part of it, 0:05:12.880 --> 0:05:15.719 that would only make the situation worse. It would exacerbate 0:05:15.760 --> 0:05:16.279 these moves. 0:05:16.600 --> 0:05:20.239 So I guess, Tyler, there's still opportunities. There are still 0:05:20.279 --> 0:05:24.160 tools that the president can use to apply some tariffs, 0:05:24.160 --> 0:05:27.200 even if this IEPA sweeping one is no longer on. 0:05:27.120 --> 0:05:29.880 The table, right and we've already heard telegraphed from the 0:05:29.920 --> 0:05:33.599 administration that they're going to pull on these other federal authorities, 0:05:33.720 --> 0:05:35.960 some of them are already in place. We talk a 0:05:36.000 --> 0:05:40.000 lot about Section two thirty two, those National security tariffs 0:05:40.040 --> 0:05:42.440 that the administration has put forward on some of those 0:05:42.480 --> 0:05:47.360 critical sectors steel, aluminum, of critical minerals, and a lot 0:05:47.400 --> 0:05:49.919 of those other areas that have been a focus of 0:05:49.920 --> 0:05:52.680 the Trump administration. When it comes to countering China. We 0:05:52.680 --> 0:05:55.360 could also see Section three oh one investigations that's over 0:05:55.440 --> 0:05:59.000 unfair trade practices. We saw a lot of those imposed 0:05:59.440 --> 0:06:02.560 on China under the first Trump administration. Think allegations of 0:06:02.600 --> 0:06:07.040 IP protection violations as one example. And then there's some 0:06:07.160 --> 0:06:10.599 lesser known ones like Section three point thirty eight that 0:06:10.720 --> 0:06:13.120 hasn't been used since the nineteen forties. I also have 0:06:13.160 --> 0:06:15.599 Section two on one here tariffs imposed on goods that 0:06:15.680 --> 0:06:19.280 cause injury to domestic industry. There's a lot, But basically 0:06:19.360 --> 0:06:21.360 the crux to think of this is that the Trump 0:06:21.360 --> 0:06:24.520 administration likes IEPA because that's a lot more flexible, it's 0:06:24.520 --> 0:06:26.960 a lot more broad based. A lot of these tariffs 0:06:27.000 --> 0:06:29.400 have limits. They have to go away after a certain 0:06:29.400 --> 0:06:32.320 amount of time, and the rates can't go that high. 0:06:32.360 --> 0:06:34.960 A lot of these tariffs have a fifteen percent sealing 0:06:35.000 --> 0:06:37.679 for example, whereas we know the president in some cases 0:06:37.720 --> 0:06:41.000 has threaten tariffs you know, fifty percent and onwards. 0:06:41.200 --> 0:06:44.520 And also all the different sections that you cited. Most 0:06:44.520 --> 0:06:46.920 of these tariffs can't be imposed instantly. There's a bit 0:06:46.920 --> 0:06:48.840 of waiting time, and we know the president wants to 0:06:48.920 --> 0:06:51.359 declare something and have it kind of be in effect 0:06:51.360 --> 0:06:55.680 almost immediately, and the IEPA tariffs allowed him that flexibility. 0:06:55.720 --> 0:06:58.320 As you put it, exactly, a Section two thirty two 0:06:58.400 --> 0:07:02.680 investigation on average nine months to complete. We have seen 0:07:02.680 --> 0:07:05.560 this administration in some cases do this under a more 0:07:05.560 --> 0:07:08.920 expedited timeline because they actually pulled on investigations that were 0:07:09.000 --> 0:07:11.679 launched under the first Trump administration, so they were able 0:07:11.720 --> 0:07:14.440 to make the legal argument that they already had such 0:07:14.440 --> 0:07:17.800 a bolstering of the information behind them that they could 0:07:17.840 --> 0:07:22.440 make the determination that this meets the national security concerns 0:07:22.520 --> 0:07:26.160 or the unfair trade allegations to put on their terrafts. 0:07:26.160 --> 0:07:29.800 But to your point exactly, Scarlett, this definitely limits the 0:07:29.840 --> 0:07:31.200 flexibility of the administration. 0:07:31.560 --> 0:07:32.840 Tyler, thank you so much. 0:07:32.840 --> 0:07:34.840 And it's just our luck that Tyler Kendall happened to 0:07:34.840 --> 0:07:36.920 be a new. 0:07:37.600 --> 0:07:39.160 Clearly, she was not anticipating this. 0:07:39.200 --> 0:07:41.040 I mean, we knew that this decision was coming along 0:07:41.080 --> 0:07:43.560 at some point, but the Supreme Court had passed up 0:07:43.760 --> 0:07:46.080 the previous two or three instances could have come out 0:07:46.080 --> 0:07:49.200 with this decision. Tyler Kendall, Bloomberg's Washington correspondent, on our 0:07:49.240 --> 0:07:51.000 way back to DC this afternoon. 0:07:51.040 --> 0:07:52.280 Thank you so much. Thank you. 0:07:53.440 --> 0:07:55.760 All right, let's go to Judie Grossel right now, Bloomberg 0:07:55.800 --> 0:07:59.360 Walls host. She joins us here in studio June. I 0:07:59.360 --> 0:08:03.160 guess this was expected from somewhat expected from a legal perspective. 0:08:03.480 --> 0:08:04.920 Does the six to three. 0:08:05.120 --> 0:08:08.040 Vote, does that mean anything one way or the other, 0:08:08.760 --> 0:08:11.000 as opposed to maybe have a unanimous nine zero. 0:08:11.480 --> 0:08:12.680 Well, I mean, I guess. 0:08:12.680 --> 0:08:15.920 It would be preferable for the people in the majority, 0:08:16.360 --> 0:08:18.520 for the justices and the majority to say, you know, 0:08:18.520 --> 0:08:21.200 this was a unanimous vote, but otherwise, you know, it 0:08:21.200 --> 0:08:27.320 doesn't really matter. It's sixty three with the very conservative justices. 0:08:27.080 --> 0:08:30.040 In the minority. I mean, this was expected. 0:08:30.200 --> 0:08:34.480 After the Supreme Court oral arguments, it seemed as if 0:08:34.520 --> 0:08:37.720 this was the definite conclusion, and so people were wondering, 0:08:37.760 --> 0:08:39.120 what was taking so long? 0:08:39.160 --> 0:08:40.280 Well, what's taking so long? 0:08:40.280 --> 0:08:44.040 As it's one hundred and seventy pages, so it's kind 0:08:44.080 --> 0:08:46.960 of difficult to get through and to figure out exactly 0:08:47.000 --> 0:08:47.640 what happened. 0:08:48.160 --> 0:08:52.040 But what happened during the oral arguments was that you. 0:08:52.040 --> 0:08:55.800 Have this statute, AEPA that no other president has used 0:08:55.840 --> 0:08:59.959 to impose tariffs. And under this statute there's a word 0:09:00.160 --> 0:09:03.640 call regulate. So how do you interpret regulate? Does that 0:09:03.720 --> 0:09:06.959 mean you can impose tariffs or not? And you know, 0:09:07.080 --> 0:09:11.720 a lot of the justices, particularly the liberal Justice, is 0:09:12.120 --> 0:09:15.440 harped on the language of the statute. 0:09:15.640 --> 0:09:16.240 What does it mean? 0:09:16.280 --> 0:09:19.640 I mean, this is a court that's originalist, and they're 0:09:19.679 --> 0:09:22.320 trying to interpret all the time with the words of 0:09:22.440 --> 0:09:25.880 a statute or the words of a constitution means. So 0:09:26.200 --> 0:09:28.880 they were looking at this and saying, you know, where 0:09:28.880 --> 0:09:32.240 do you get the authority in this statute to impose tariffs? 0:09:32.800 --> 0:09:34.440 And it was pretty. 0:09:34.120 --> 0:09:37.600 Obvious during their oral arguments that there were enough votes, 0:09:38.000 --> 0:09:43.040 particularly the Chief Justice. And the Chief Justice wrote this opinion. 0:09:43.040 --> 0:09:45.880 And I'll just note that when I predicted that, because 0:09:45.920 --> 0:09:49.400 whenever there's a big opinion that he's in in the center, 0:09:49.720 --> 0:09:52.240 he writes it. He wrote the you know, the Supreme 0:09:52.280 --> 0:09:59.160 Court opinion giving President Trump limited presidential authority to be 0:10:00.320 --> 0:10:03.679 let's say to be I'm trying to think of the 0:10:03.760 --> 0:10:07.760 right word. Not to be prosecuted for ax committed criminal 0:10:07.760 --> 0:10:08.920 acts committed in office. 0:10:08.960 --> 0:10:09.680 He wrote that one. 0:10:09.679 --> 0:10:13.520 He's written like all the very very big opinions. So 0:10:14.200 --> 0:10:16.440 when we heard what he said in the oral arguments, 0:10:16.480 --> 0:10:18.360 it was pretty obvious what was going to happen. And 0:10:18.400 --> 0:10:20.240 it's just a question of why it took so long. 0:10:20.280 --> 0:10:24.560 And I think Justice Jackson had said last week that 0:10:25.360 --> 0:10:27.800 in an interview that there are nuances to this so 0:10:27.920 --> 0:10:30.320 and we won't be able to see the nuances until. 0:10:30.080 --> 0:10:35.160 We get through some of this. Yes, pages one hundred 0:10:35.200 --> 0:10:36.079 and seventy pages. 0:10:36.160 --> 0:10:39.880 It's I mean, there are concurrences and partial concurrences. It's 0:10:39.880 --> 0:10:42.880 it's really it's messy. I'd say it's messy. 0:10:42.960 --> 0:10:45.280 And that's exactly how Brett Kavanaugh, the one of the 0:10:45.320 --> 0:10:49.280 dissenting justices, described the refund process. It was likely to 0:10:49.320 --> 0:10:53.280 be a mess, as was acknowledged at oral argument. Is 0:10:53.320 --> 0:10:56.400 it surprising then that the justices did not address the 0:10:56.440 --> 0:10:59.120 extent to which importers are entitled to refunds That it's 0:10:59.160 --> 0:11:01.480 just basically it back to the lower courts. 0:11:01.640 --> 0:11:04.160 Well, I think what the justices try to do is 0:11:04.160 --> 0:11:07.679 write as narrow an opinion as they possibly can. So 0:11:07.840 --> 0:11:10.000 why get into an area they really don't have to 0:11:10.040 --> 0:11:12.640 get into. And as you say, there's a lot of 0:11:12.840 --> 0:11:15.600 you know, it's going to be messy. And so I 0:11:15.640 --> 0:11:18.440 think that that's the way this court operates. They don't 0:11:18.480 --> 0:11:20.560 want to rule on something that they don't have to 0:11:20.640 --> 0:11:23.160 rule on. And here they did a ruling on tariffs. 0:11:23.679 --> 0:11:25.560 You know, a week before the President is going to 0:11:25.600 --> 0:11:28.080 make his State of the Union address. That's why I 0:11:28.080 --> 0:11:30.280 didn't think it was going to come down today. We 0:11:30.280 --> 0:11:32.280 were talking about in the newsroom and like, why would 0:11:32.320 --> 0:11:34.480 they do that? And then they're going to sit there. 0:11:34.520 --> 0:11:36.680 Is he going to say something about it? He probably 0:11:36.720 --> 0:11:38.960 will say something about it while they're sitting there. A 0:11:38.960 --> 0:11:41.480 lot of them will be sitting there. The Chief always goes, 0:11:42.880 --> 0:11:43.719 so they'll be. 0:11:43.720 --> 0:11:45.040 At the State of the Union. 0:11:45.320 --> 0:11:48.679 The Chief always goes, Elena Kagan goes usually sort of 0:11:48.800 --> 0:11:54.240 mayor goes. Alito hasn't gone since Barack Obama said something 0:11:54.320 --> 0:11:57.880 about Citizens United and Alito was shaking his head back 0:11:57.960 --> 0:11:58.480 and forth. 0:11:58.520 --> 0:12:00.319 So he hasn't been there. But maybe he'll be there 0:12:00.320 --> 0:12:04.240 for this. I don't know. So and Justice cours. 0:12:04.280 --> 0:12:07.520 It has gone Justice Kavanaugh, Amy Coney, Barrett, so a 0:12:07.520 --> 0:12:09.280 lot of them do go. So it'll be interesting to 0:12:09.360 --> 0:12:13.200 watch and to see whether any statements are made from 0:12:13.320 --> 0:12:16.920 the President about that and whether there's any shaking of heads. 0:12:16.960 --> 0:12:20.320 So I was wrong about that, and I admit it. 0:12:20.679 --> 0:12:23.160 So this came as a surprise this morning, even though 0:12:23.200 --> 0:12:26.400 the decision itself what they did didn't come as a surprise. 0:12:27.480 --> 0:12:27.720 Yeah. 0:12:27.800 --> 0:12:30.400 If anything, this makes the State of the Union address 0:12:30.480 --> 0:12:32.840 that much more interesting to see how it all shakes 0:12:32.880 --> 0:12:35.480 out the body language, not just what President Trump will say, 0:12:35.520 --> 0:12:39.160 because I'm sure he'll probably say something even before his 0:12:39.200 --> 0:12:40.200 address next week. 0:12:40.320 --> 0:12:40.520 Yep. 0:12:40.559 --> 0:12:42.000 Absolutely, we'll certainly given this. 0:12:42.000 --> 0:12:44.800 This the signature economic policy that he has really defined 0:12:44.840 --> 0:12:45.560 his administration. 0:12:45.960 --> 0:12:48.240 He's been talking about how the Supreme Court, I mean 0:12:48.360 --> 0:12:50.679 several times he said the Supreme Court has to rule 0:12:51.000 --> 0:12:54.120 in the right way on this. So and he's always 0:12:54.160 --> 0:12:56.760 bit well because they've been ruling so much in his 0:12:56.920 --> 0:13:01.480 favor on the emergency ducket. He's been very complimentary about 0:13:01.480 --> 0:13:02.800 the Court. But we'll see what happens. 0:13:02.840 --> 0:13:02.920 II. 0:13:03.000 --> 0:13:04.320 Dad, that's going to last all right. 0:13:04.360 --> 0:13:07.720 We'll stay on top of the President's social media output 0:13:07.760 --> 0:13:09.840 here today, jun Grassa, thank you so much. We appreciated 0:13:09.880 --> 0:13:13.240 Jean Grasso, a Bloomberg Law host, here, joining us here 0:13:13.320 --> 0:13:18.080 for this momentous decision. Here, the US Supreme Court struck 0:13:18.160 --> 0:13:23.240 down President Donald Trump's sweeping global tarrits, undercutting his significant 0:13:23.280 --> 0:13:27.080 economic policy and delivering his biggest legal defeat since he 0:13:27.160 --> 0:13:29.960 returned to the White House. That is, according to Bloomberg 0:13:30.120 --> 0:13:32.080 reporting Scarla Fu and Paul Swooney live here in our 0:13:32.080 --> 0:13:34.880 Bloomberg Interactive Broker studio. I'm looking at the top live again. 0:13:35.000 --> 0:13:38.200 Great great reporting, real time on this breaking story. Sean 0:13:38.280 --> 0:13:41.640 don and senior economics writer. He writes, it's not overstating 0:13:41.640 --> 0:13:44.760 things to say this is a historic decision that applies 0:13:44.760 --> 0:13:47.480 on at least two fronts. Number One, the policy at issue, 0:13:47.480 --> 0:13:49.760 Trump's increase in tarists last year was the largest. It's 0:13:49.800 --> 0:13:53.400 the infamous nineteen thirty Smoot Hawley duties. Number Two, it's 0:13:53.400 --> 0:13:57.079 application the presidential powers over the economy. Scholars and the 0:13:57.120 --> 0:14:00.800 lead up were calling this the biggest case inconomic policy 0:14:00.800 --> 0:14:04.400 realm since the Youngstown steelcase in nineteen fifty two, in 0:14:04.400 --> 0:14:06.560 which is the court block Harry Truman's been to nationalized 0:14:06.600 --> 0:14:09.560 steel mills during the Korean War. Others have liken the 0:14:09.600 --> 0:14:13.160 idea of Supreme Court rebrooking Trump on tariffs to the 0:14:13.200 --> 0:14:17.640 Court's fight with FDR over the New Deal, So. 0:14:17.400 --> 0:14:18.760 A lot of historical contexts. 0:14:18.760 --> 0:14:22.000 There are certainly a huge landmark decision by the Supreme 0:14:22.040 --> 0:14:25.440 Court determining that President Trump's global tariffs are illegal. 0:14:25.720 --> 0:14:27.240 Let's bring in Henrietta Trees. 0:14:27.680 --> 0:14:30.400 Henrietta is our go to expert on all things policy 0:14:30.400 --> 0:14:32.600 and economics. She is a managing partner and director of 0:14:32.640 --> 0:14:36.600 Economic Policy at Vetta Partners. Henrietta the market had largely 0:14:36.640 --> 0:14:40.680 anticipated this. We saw it with the reaction in certain 0:14:40.680 --> 0:14:44.840 retail stocks, companies that would benefit from the rollback of 0:14:44.920 --> 0:14:45.520 these tariffs. 0:14:45.680 --> 0:14:46.720 How are you looking at this? 0:14:48.200 --> 0:14:52.040 I agree, this is just a tremendous day, a huge 0:14:52.080 --> 0:14:56.480 win for the Constitution, for folks who cover tax policy, 0:14:56.680 --> 0:15:02.160 for anybody who remembers the Revolutionary War fought against specifically 0:15:02.360 --> 0:15:05.200 a taxation power that Congress did not have any say over. 0:15:05.400 --> 0:15:08.320 So this is, in my opinion, the largest and most 0:15:08.320 --> 0:15:13.040 impactful macroeconomic ruling the courts have ever delivered. So just 0:15:13.080 --> 0:15:15.440 a tremendous day. It is in line with what the 0:15:15.440 --> 0:15:18.200 market was expecting. You could see that investors were very 0:15:18.240 --> 0:15:22.760 prepared to rip the retail stocks. Everybody who's been exposed 0:15:22.800 --> 0:15:26.080 to the forty percent trans shipping tariffs, the ad hoc 0:15:26.160 --> 0:15:31.440 fifty percent tariffs on Brazil, the wide ranging threats of 0:15:31.520 --> 0:15:34.720 two hundred percent tariffs on French wine that have just 0:15:34.760 --> 0:15:37.440 been spewing out of the White House for twelve months now. 0:15:37.960 --> 0:15:41.360 So it's really an exhilarating day, an incredible day for 0:15:41.400 --> 0:15:42.000 the Constitution. 0:15:42.200 --> 0:15:44.840 In my opinion, Henriette, is this do you think in 0:15:45.000 --> 0:15:49.360 bolden any of President Trump's adversaries, whether in Congress or 0:15:49.480 --> 0:15:52.800 just within Washington d c. Apparatus, that maybe this gives 0:15:52.800 --> 0:15:54.520 them a little bit more confidence to push back. Is 0:15:54.520 --> 0:15:55.560 there any reason to believe that. 0:15:56.600 --> 0:15:58.640 Absolutely. I think there's two ways to look at this. 0:15:58.680 --> 0:16:01.360 First of all, this is such news for President Trump. 0:16:01.680 --> 0:16:04.600 Americans hate the tariffs. They know their taxes, they know 0:16:04.640 --> 0:16:07.320 that they're driving inflation, and they don't like them. So 0:16:07.520 --> 0:16:10.200 now that that authority has been stripped away from him, 0:16:10.480 --> 0:16:12.680 the president no longer has to collect these taxes. 0:16:12.680 --> 0:16:14.080 It's up to him to decide. 0:16:13.760 --> 0:16:16.720 Whether he wants to migrate into new and different authorities 0:16:17.040 --> 0:16:19.640 like Section one twenty two that give him the ability 0:16:19.880 --> 0:16:22.760 to impose tires at a fifteen percent rate for the 0:16:22.760 --> 0:16:23.560 next five months. 0:16:23.560 --> 0:16:25.280 If he wants to do that, he can go ahead on. 0:16:25.840 --> 0:16:28.920 But the American public will be very grateful that the 0:16:28.960 --> 0:16:31.600 Supreme Court struck these tires down, and even more grateful 0:16:31.640 --> 0:16:32.720 if he keeps them off. 0:16:33.040 --> 0:16:34.440 So that's one way of looking at it. 0:16:34.480 --> 0:16:37.840 And Republicans on Capitol Hail are staring down the barrel 0:16:37.920 --> 0:16:42.120 of a very ugly affordability narrative election cycle where we've 0:16:42.160 --> 0:16:46.480 seen races as diverse as Texas swing thirty one points 0:16:46.520 --> 0:16:49.680 away from President Trump just since he was elected. 0:16:50.000 --> 0:16:52.080 Those are tremendous. 0:16:51.400 --> 0:16:54.040 Losses for the Republican conference, and most of it is 0:16:54.080 --> 0:16:57.400 driven by the President's handling of the US economy. It's 0:16:57.520 --> 0:17:00.920 influenced not just the traditional pendant voter that we are 0:17:00.920 --> 0:17:04.680 always concerned with, but also with young male and Hispanic 0:17:04.760 --> 0:17:08.000 voters who have driven the President to his second term. 0:17:08.119 --> 0:17:09.800 So a lot to see here. 0:17:10.200 --> 0:17:13.400 A lot to see here. And it's not just American 0:17:13.440 --> 0:17:16.399 stocks that are benefiting. I'm looking at for instance, LVMH 0:17:16.760 --> 0:17:19.920 Hennessey in Europe climbing on the news, up four point 0:17:20.000 --> 0:17:23.159 four percent in European trading. So companies that rely on 0:17:23.240 --> 0:17:26.720 exports to the US also benefiting from this ruling. Paul 0:17:26.760 --> 0:17:29.200 asks a really important question Henrietta bas. 0:17:29.440 --> 0:17:34.240 It's very basic. Our temps rolled back starting today. 0:17:33.320 --> 0:17:35.720 They are legal so at border patrol. 0:17:35.840 --> 0:17:37.560 One of the things that's questionable here is that the 0:17:37.560 --> 0:17:39.960 White House has said all these trade deals are still. 0:17:39.840 --> 0:17:42.480 Going to be intact. You know, we've signed these agreements. 0:17:42.600 --> 0:17:43.680 That is null and void. 0:17:44.040 --> 0:17:46.320 Now if you are an importer and you are at 0:17:46.320 --> 0:17:49.879 Customs and Border Patrol, you no longer will suffer paying 0:17:49.920 --> 0:17:52.560 for these tariffs. And the Supreme Court has told Customs 0:17:52.560 --> 0:17:54.840 and Border Patrol they can no longer collect them. So 0:17:55.080 --> 0:17:57.960 this is a problem that the White House is going 0:17:58.000 --> 0:17:59.720 to have to address. They have a number of trade 0:17:59.760 --> 0:18:02.359 deals that they have signed. I believe there's about eight 0:18:02.760 --> 0:18:05.800 at this point, and many of them include a reciprocal 0:18:05.840 --> 0:18:07.880 tariff of ten percent in the case of the UK 0:18:08.119 --> 0:18:10.280 or nineteen percent in the case of Indonesia. 0:18:10.400 --> 0:18:11.760 Those tariffs are illegal. 0:18:12.119 --> 0:18:15.000 The Supreme Court has telled the Customs and Border Patrol 0:18:15.040 --> 0:18:16.200 people this. 0:18:16.160 --> 0:18:17.879 Authority is not permitted. 0:18:17.960 --> 0:18:21.399 So it's the importers who are going to rise up 0:18:21.440 --> 0:18:23.119 and say I'm not paying. It doesn't matter what the 0:18:23.160 --> 0:18:26.040 countries you know, independently decide or whatever the White House does. 0:18:26.840 --> 0:18:29.600 So what do we expect this administration? How do you 0:18:29.600 --> 0:18:31.879 expect the President and administration to respond here? Do you 0:18:31.880 --> 0:18:36.320 think they will aggressively try to work other tariff routes 0:18:36.400 --> 0:18:40.160 or maybe just let this issue die and just fade away. 0:18:41.040 --> 0:18:43.919 I appreciate the question, Paul. I am widely, wildly out 0:18:43.960 --> 0:18:44.919 of consensus on this. 0:18:45.280 --> 0:18:48.160 But what I just astrived on Section one twenty two 0:18:48.240 --> 0:18:51.399 is just one of the many alternates and alternatives that 0:18:51.400 --> 0:18:54.359 the president has Section three oh one, which is, you know, 0:18:54.359 --> 0:18:56.680 four hundred and fifty billion dollars worth of tires on China. 0:18:56.720 --> 0:18:59.040 We could re up that and apply it to the EU, the. 0:18:59.080 --> 0:19:01.640 UK, or Brazil. Well, all of those have been threatened. 0:19:01.920 --> 0:19:04.679 But think about what functionally that means. It means that 0:19:05.000 --> 0:19:08.280 individual businesses will have to go out again, get their 0:19:08.320 --> 0:19:12.840 trade lawyers on the payroll to comply with brand new, 0:19:13.520 --> 0:19:17.000 potentially even unused authorities that they'll have to comply with 0:19:17.040 --> 0:19:19.320 once again. Is it a fifteen percent tire freight under 0:19:19.320 --> 0:19:20.280 Section one twenty two? 0:19:20.520 --> 0:19:21.320 Does it exist? 0:19:21.359 --> 0:19:21.560 Now? 0:19:21.680 --> 0:19:23.119 When's the President going to put it on? 0:19:23.560 --> 0:19:25.880 What do I need to worry about with the national security, taft, 0:19:25.920 --> 0:19:29.159 the confusion, and the uncertainty, which were the buzzwords following 0:19:29.160 --> 0:19:32.120 Liberation Day in April, are going to come roaring back. 0:19:32.200 --> 0:19:34.520 In the event the President decides to migrate away from 0:19:34.520 --> 0:19:37.879 my EPA and move into new and different authorities. I 0:19:37.920 --> 0:19:41.399 think it would be extraordinarily disruptive. And again with my 0:19:41.560 --> 0:19:44.879 eye on the election cycle and then affordability narrative, the 0:19:44.920 --> 0:19:48.399 President I think is already on a very tight leash 0:19:48.480 --> 0:19:51.000 and he's not going to have the leeway to fully 0:19:51.040 --> 0:19:54.479 reimpose anywhere near the revenue that has been collected by 0:19:54.520 --> 0:19:57.200 eepas so far. So I don't think these TIFFs will 0:19:57.200 --> 0:19:59.840 ever come back at their current level, and I think 0:20:00.160 --> 0:20:02.040