Highest US Tariffs Since WWII Set to Cut Growth, Boost Inflation
The tariffs announced Friday, which run from 10% to 41% and mark the highest rates since World War II, would increase the average US duty to 15.2% from 2.3% in 2024, according to analysis by Maeva Cousin, chief trade economist at BE.
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Fast Company
a few seconds ago
- Fast Company
What to know about Trump's court battle over tariffs
A federal appeals panel on Thursday appeared skeptical of U.S. President Donald Trump 's argument that a 1977 law historically used for sanctioning enemies or freezing their assets gave him the power to impose tariffs. Regardless of how the court rules, the litigation is almost certainly headed to the U.S. Supreme Court. Here is what you need to know about the dispute, which Trump has called 'America's big case,' and how it is likely to play out in the months ahead. What is the case about? The litigation challenges the tariffs Trump imposed on a broad range of U.S. trading partners in April, as well as tariffs imposed in February against China Canada and Mexico. It centers around Trump's use of the International Emergency Economic Powers Act (IEEPA), which gives the president the power to address 'unusual and extraordinary' threats during national emergencies. Trump has said that trade imbalances, declining manufacturing power and the cross-border flow of drugs justified the tariffs under IEEPA. A dozen Democratic-led states and five small U.S. businesses challenging the tariffs argue that IEEPA does not cover tariffs and that the U.S. Constitution grants Congress, not the president, authority over tariffs and other taxes. A loss for Trump would also undermine the latest round of sweeping tariffs on dozens of countries that he unveiled late Thursday. Trump has made tariffs a cornerstone of his economic plan, arguing they will promote domestic manufacturing and substitute for income taxes. What's the status of the litigation? The U.S. Court of Appeals for the Federal Circuit heard oral arguments on Thursday in the case. The panel of 11 judges sharply questioned the government about Trump's use of IEEPA, but did not rule from the bench. The Federal Circuit has not said when it will issue a decision, but its briefing schedule suggests it intends to move quickly. Meanwhile, the tariffs remain in effect after the Federal Circuit paused a lower court's ruling declaring them illegal. Will Trump's tariffs be blocked if he loses in court? A Federal Circuit ruling would almost certainly not end the litigation, as the losing party is expected to appeal to the Supreme Court. If the Federal Circuit rules against Trump, the court could put its own ruling on hold while the government appeals to the Supreme Court. This approach would maintain the status quo and allow the nine justices to consider the matter more thoroughly. The justices themselves could also issue an 'administrative stay' that would temporarily pause the Federal Circuit's decision while it considers a request from the Justice Department for more permanent relief. Is the Supreme Court likely to step in? The Supreme Court is not obligated to review every case appealed to it, but it is widely expected to weigh in on Trump's tariffs because of the weighty constitutional questions at the heart of the case. If the Federal Circuit rules in the coming weeks, there is still time for the Supreme Court to add the case to its regular docket for the 2025-2026 term, which begins on October 6. The Supreme Court could rule before the end of the year, but that would require it to move quickly. How might the Supreme Court rule? There is no consensus among court-watchers about what the Supreme Court will do. Critics of Trump's tariffs are optimistic their side will win. They point to the Supreme Court's decision from 2023 that blocked President Joe Biden from forgiving student loan debt. In that ruling, the justices limited the authority of the executive branch to take action on issues of 'vast economic and political significance' except where Congress has explicitly authorized the action. The justices in other cases, however, have endorsed a broad view of presidential power, especially when it comes to foreign affairs. Can importers seek refunds for tariffs paid? If Trump loses at the Supreme Court, importers are likely to seek refunds of tariffs already paid. This would be a lengthy process given the large number of anticipated claims. Federal regulations dictate that such requests would be first heard by U.S. Customs and Border Protection. If that agency denies a refund request, the importer can appeal to the Court of International Trade. There is precedent for tariff refund requests being granted. Since May, CBP has been processing refunds to importers who inadvertently overpaid duties because of tariff 'stacking' — where multiple overlapping tariffs are applied to the same imports. And in the 1990s, after the Court of International Trade struck down a tax on exporters that was being used to finance improvements to U.S. harbors, the court set up a process for issuing refunds. That decision was upheld by both the Federal Circuit and the Supreme Court. Would a courtroom defeat unravel Trump's trade deals? Trump has used the threat of emergency tariffs as leverage to secure concessions from trading partners. A loss at the Supreme Court would hamstring Trump in future negotiations. The White House, however, has other ways of imposing tariffs, like a 1962 law that allows the president to investigate imports that threaten national security. Trump has already used that law to put tariffs on steel and aluminum imports, and those levies are not at issue in the case before the Federal Circuit. Some legal experts say a loss for Trump at the Supreme Court would not impact bilateral trade agreements the U.S. has already inked with other countries. Others say that the trade deals alone might not provide sufficient legal authority for taxes on imports and may need to be approved by Congress.
Miami Herald
a few seconds ago
- Miami Herald
Who do tariffs help? What Americans say in poll as Trump unveils new levies
A greater share of Americans would like to see President Donald Trump's tariffs scaled back than expanded, according to a new Economist/YouGov poll. And most Americans believe his tariffs will drive up prices and put a heavier burden on U.S. consumers. The survey comes after Trump signed an executive order on July 31 imposing sweeping new levies — between 10% and 41% — on imports from about 70 countries. These are set to go into effect on Aug. 7, providing a short window for negotiations. Trump, who previously issued a 10% baseline tariff on all imports in April, in addition to sector-specific levies, has said the unprecedented measures are necessary to counter unfair trade practices. 'Tariffs are making America GREAT & RICH Again,' the president said in a post on Truth Social. 'They were successfully used against the USA for decades. … Now the tide has completely turned, and America has successfully countered this onslaught of Tariffs used against it.' Many economists, meanwhile, are wary of widespread tariffs, arguing they will boost inflation, raise prices and result in job losses. The poll also comes after the Labor Department's latest jobs report, released on Aug. 1, found weaker-than-expected employment growth in July. As a result, Trump fired the head of the Bureau of Labor Statistics, claiming the report was 'rigged.' Here is a breakdown of the results from the poll. A much larger share of Americans want U.S. tariff rates to be decreased rather than increased, according to the poll, which sampled 1,777 U.S. adults July 25-28. A plurality, 41%, said rates should be lowered, while 18% said they should be raised. An additional 23% said they should be kept the same. The poll — which has a margin of error of about 3.5 percentage points — also asked respondents, 'who is is most helped and hurt by tariff increases?' A majority, 54%, said American consumers are hurt the most, while far fewer said foreign manufacturers (22%), foreign consumers (4%) and U.S. manufacturers (3%). Meanwhile, a plurality, 28%, said American manufacturers are helped the most by tariff increases. Smaller shares said U.S. consumers (11%), foreign manufacturers (6%) and foreign consumers (1%). Additionally, the vast majority of respondents, 71%, said they believe Trump's tariffs will lead to higher prices, with 43% saying prices will increase 'a lot' and 28% saying they will rise 'a little.' Just 9% said they expect tariffs will lead to lower prices. Most Democrats and Republicans — 87% and 55%, respectively — agreed that levies will result in higher prices.
Bloomberg
a minute ago
- Bloomberg
Stock Movers: American Eagle, Palantir, Tesla
On this episode of Stock Movers: - American Eagle (AEO) shares rise after resident Donald Trump posted that "Sydney Sweeney, a registered Republican, has the 'HOTTEST' ad out there. It's for American Eagle, and the jeans are 'flying off the shelves.' - Palantir (PLTR) shares gain. The data analytics company has earnings after the bell. BI noted that continued momentum in sales growth is needed to sustain Palantir's premium valuation among enterprise-software peers. - Tesla (TSLA) shares rise after the company approved an interim stock award worth about $30 billion for Chief Executive Officer Elon Musk to keep his attention on the automaker.
