Thank God They're Morons: Trump Tariff Edition

As we all heard, the Supreme Court struck down Donald Trump's tariffs on Friday.

Trump responded by placing a 10% global tariff via executive order. Within hours, that number had increased to 15% with Trump attempting to justify the tariffs through Sections 122 and 301 of the 1974 Trade Act, an obscure law that was created to address short-term emergencies, not long-term economic policy. If enacted, this new global tariff would remain in place for 150 days before requiring congressional extension. The Trump Administration is hoping to use this law to buy time for the next 5 months before engaging in an intimidation campaign to force congressional Republicans to vote to extend the tariffs come July. With that being under 4 months from the midterms, Trump and his lackeys are hoping that congressional Republicans, fearing for their political lives, would once again give in to his worst instincts and vote with him rather than risk not having his coveted endorsement for their upcoming House and Senate races. 

One problem, though. Trump might once again not have the authority to implement the tariffs he so badly wants to enact. From Fortune Magazine: 

On Saturday, Trump hiked his new tariffs to 15%, less than 24 hours after setting them at 10% in an executive order. That’s after the Supreme Court ruled the president has no authority to apply tariffs under the International Emergency Economic Powers Act.

In a briefing with reporters Friday, Trump claimed the court endorsed his ability to use other means to carry out his trade agenda.

“The good news is that there are methods, practices, statutes and authorities as recognized by the entire court in this terrible decision and also is recognized by Congress which they refer to that are even stronger than the IEEPA tariffs available to me as president of the United States,” he said.

But the actual language of the Trade Act lists requirements that don’t exist today, including a “large and serious” balance-of-payments deficit.

While the U.S. has run a trade deficit for decades, it’s been offset by capital inflows as foreign investors pour billions into financial markets, resulting in a net balance of zero.

“Section 122 of the 1974 Trade Act, on which Trump’s 10% tariff is based, does not apply in the current macro environment,” said Peter Berezin, chief global strategist at BCA Research, in post on X on Friday. “A balance of payments deficit is not the same thing as a trade deficit. You cannot have a balance of payments [deficit] if you have a flexible exchange rate, as the US currently does.”

Similarly, economist Alan Reynolds, a senior fellow at the Cato Institute, pointed out that the trade deficit is fully funded by the capital account surplus, adding that there is no overall balance-of-payments deficit to justify Trump’s newest tax on imports.

Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative, wrote in a blog post last month that Section 122 only makes sense under a fixed exchange rate, which hasn’t existed in the U.S. in more than 50 years.

Back then, when the dollar was pegged to gold, there was still a risk that the U.S. could suffer from shortages of reserves needed to cover international obligations.

But by the time the Trade Act was introduced in late 1973, the U.S. had already adopted a floating exchange rate system that was self-adjusting, eliminating the need for reserves to maintain a fixed dollar value. The bottom line is that “Section 122 was effectively rendered obsolete,” Riley explained.

“Section 122 only authorizes tariffs in the presence of a fundamental international payments problem,” he added. “Because the United States does not face such a problem, Section 122 cannot legally be used by President Trump to impose new tariffs.”

Any competent political party would lick its wounds and move on. Today's Republican Party does not fit that criteria. 

Because they are Trump and Trump is them. What Trump wants goes, no matter how ill-advised, or damaging, or downright illegal. This is a party beholden to a singular figure and must adhere to that figure's whims no matter the cost. Friday's Supreme Court decision was an easy out for the party to finally cut its losses and be done with the failed Trump tariff experiment. Yet within the hour, Trump was already back at it, trying once again to accomplish what he sees as a significant part of his legacy. Trump is the Great Businessman, and his tariffs are the way to prove that to the world (and subconsciously, probably to his Daddy, but that's a whole other issue). His tariffs, being paid for by 96% of Americans, have been an undeniable failure. They're hurting GOP districts in the swing states and across the heartland. But once Trump gets something in his head, he will do everything in his power to make it happen. And those closest to him are more than happy to nod and smile as the Mad King continues to make harmful decision after decision that adversely affect the American people.

By doing this, by keeping his tariff dream alive, Trump has continued to tie this issue to the GOP like an albatross around their necks. With companies already lining up for refunds as a result of Friday's Supreme Court decision, congressional Republicans also have to answer the question from their constituents, "If this policy was illegal, why are you continuing to try to implement it?" It's a valid question for the Party of Law and Order, and while it will be easy to concoct some response for the brain-dead Trump voters, it's a lot more challenging to articulate a response to an independent in a swing district whose small business has been pushed to the brink through the continued ups and downs of the administration's nonsensical tariff policy. Telling a small business owner to trust Donald Trump is like telling the police to trust Ted Bundy; each has simply proven time and time again that they cannot be counted on to do the right thing. With a record 64% of Americans disapproving of Trump's tariffs, this is an issue that is a big-time loser for the GOP come November. 

Yet here the GOP is, doubling and potentially tripling down on the policy that hurts so many Americans. All to appease their orange overlord and his tariff fantasy. After the re-election of President Barack Obama in 2012, then-Governor Bobby Jindal told the GOP to stop being the "dumb party." Fourteen years later, the party is dumber than ever. They willingly sold out to a conman from Queens. They know better. Get them behind closed doors, or get a GOP congressman not running for re-election, and they'll say the honest truth about what they think of Donald Trump and his tariffs. But publicly, they're subservient to Trump. They're sycophantic to his policies. They're silent to anything that would be viewed as even a teensy bit of criticism for Dear Leader. This is Trump's key domestic economic policy, and speaking ill of it must be avoided at all costs. We've officially reached the point where the entire GOP is in their white robes, and the Kool-Aid has been served that will help them ascend to a higher plane. 

Watching them willingly sip the political poison certainly has been a sight to behold.