Speaker 1: And Hello, Welcome one and all to the Big Podcast
on this Friday today, it's the twentieth day of February,
year of our Ward, twenty twenty six. My name is
Tom Sullivan. And lo and behold, we finally have a
tariff decision from the Supreme Court. We've been waiting and
waiting and waiting for this, and this has been this
has been a huge issue for the president long before
he was president. You go back forty years and find
him talking to Oprah Winfrey about his complete that other
countries are charging us tariffs and we're not charging them
and it's not equal. And I mean, he's been doing
it for a long time. Beck, let's you want to
do a little bit of go back into see what
he what he used to say. Here's a little bit
of Donald Trump from many years ago.
Speaker 2: Without tariffs, this country would be in such trouble right now,
we're taking in so much money with the tariffs now
that it's such a pleasure. The word tariff. It's more
beautiful than love, It's more beautiful than anything. It's the
most beautiful word. To me, the most beautiful word in
the dictionary is tariff. And it's my favorite word.
Speaker 1: He's made it very clear over the years, and he's
there's a lot he's got a lot of support. But
conservatives have in general never been in favor of tariffs.
I have not because history show that it leads to
all kinds of other economic problems. But rather than do
an economic class about tariffs here today, we'll get plenty
of economists and lawyers to talk about that. The president
was lost in the Supreme Court. I don't want to
bury the lead. Supreme Court came out and said in
a vote of six to three that the president cannot
impose tariffs the way that he's been doing it. The
decision was one hundred and seventy pages long. The minute
it was announced, a stock market rallied it's proceeded by
people like me who don't like tariffs, that it's a
free market ruling. I am a big free market guy,
and the president is not. He wants to manipulate, using government,
the big boot of government to manipulate things like tariffs.
Not because of of Japan charging US five percent for pencils,
we will charge them five percent for inc It's he
gets it causes uncertainty the way he does this, because
he would wake up one morning and say that country
may be mad, so I'm going to impose one hundred
percent tariffs some of them. Then two weeks later, kissing makeup,
he would take fifty percent of the teriff away. It
became crazy. So this decision was the fact that the
president used something called IEPA. AEPA is the acronym for
the International Emergency Economic Powers Act. It was put together
in nineteen seventy seven. It was to try to rein
in presidents on the way that they deal economically with
foreign countries. This is after Richard Nixon and all the
business that he went through, so this had been struck down.
I think it's great for the economy. We have the well,
the government has collected one hundred and fifty billion. I
thought it was two hundred and so it's one hundred
and fifty to two hundred billion dollars that they have collected.
And now the question is how's that refund going to work?
Because you have been paying part of what you have
been purchasing since Liberation Day back on April first. Part
of what you have been purchasing has been tariffs built
into the price of whatever it was you bought. So
are you going to be able to put in a
refund request. I doubt it. But the importers and the
large companies that bring products in, they're going to be
putting in. And there's eight hundred small businesses that have
already said they are going to claw back because it's
been killing small businesses. The big the Walmarts of the
world can can make things happen a lot easier to
be able to handle the higher tariffs, but small businesses
they've been they've been getting killed by this. There are
three hundred and thirty eight court challenges by small businesses
that have been going after these tariffs, saying this is
putting me out of business. So the president really, well
we know this about him. He doesn't he doesn't like
people to tell him you can't do that.
Speaker 3: No.
Speaker 1: He doesn't like the word no. He lashed out at
the Supreme Court. I mean, I've never seen him this angry.
It was a written It was in the in the
press office, press room of the of the White House,
and they dimmed the lights. It was weird. They dimmed
the lights and he came out and there was Howard
Lutnick and some others standing behind him. But he did
not give his comments. He read from a piece of paper,
and it sounded to me it was very angry, very angry.
It sounded to me like the guy who writes most
of his stuff is Steven Miller. It's very Stephen Miller
about the fact that he doesn't need Congress, he can
do this on his own. He went about this to
do it simple. He's now going. In fact, he announced
that he's going to lay a ten percent tariff on
top of all the other tariffs that he's laid out
there using Section one twenty two, and then he's got
Section two one, Section three oh one, Section three thirty eight.
That's all true. There's a number of other federal statutes
that allow the president, this president or any other president
the ability to lay tariffs, but they have rules and
restrictions attached to them, and you have to, in many
of the cases, either go through Congress or go through
a court. So it's not like he's he's trying to
brush it off, like I got all these other things
I can do and we'll see how that works out.
But it was he was mad, I mean he was that.
That speech was full of anger. So it leads again
to the question for businesses about the uncertainty, and well,
Neil Gorsich, you find his statement, uh in his he
was one of the of the six that said, yeah, this,
you can't do this the way you're doing it. Let
me just the justices that that dissented were Alito and
Clarence Thomas and Brett Kavanaugh. They're the one the the
three that said we're fine with this. This is a
Neil Gorsich part of his concurring opinion. He said, yes,
legislating can be hard and take time, and yes it
can be tempting to bypass Congress when some pressing problem arises,
but the deliberative nature of the legislative process was the
whole point of its design. Through that process, the nation
can tap the combined wisdom of the people's elected representatives,
not just that of one faction or man. So he
was basically big slapped to Donald Trump about you're just
one guy, and you don't get to determine on your
own what the tariff will be. So let's let's play
for you some of the some of the reactions that
came in today. We'll start with Ari Fleischer. Find out
what his view was.
Speaker 4: Well, you know, for a year We've heard this argument
that somehow Americans don't bear the burden of the tariffs
foreigners are paying them. It's never been true. Terraffs are
taxes on imports paid for by the importer, a household
or a firm. In the United States, they write checks
to Customs and Immigration. There's a narrow, highly improbable world
in which every foreign producer cuts their price by enough
to offset the tariff and taxes are prices plus tariffs
don't go up in the US. That's never been plausible,
and those studies have ever found anything close to that.
Americans have paid those tariffs for a year and it's
been a substantial headwind to the economy, There's no question
about it. And so to have that tariff relief I
think is legally appropriate and economically beneficial.
Speaker 1: Right now, they have been a headwind because of the
fact that prices are up. And that's why the Feds
having a hard time getting inflation down to two percent.
Is you've got prices plus tariffs, and that raises the
prices of things and it slows down the economy. And
aris is not alone. Let me pull up this article
from the Wall Street Journal. This was February thirteenth is
from the Editorial Board. The headline is your pain. Ninety
percent of Trump's tariffs, so says the Federal Reserve Board.
New York Federal Reserve Board is said in their latest
look at import prices, they do. They've got a whole
bunch of economists that are studying everything. And the article
in the Wall Street Journal says, no matter how often
President Trump insists his tariffs are taxing foreigners to enrich
the US, economic studies show that Americans are actually paying
the bill. New York Federal Reserve in an analysis on
the bank's website for researchers right, nearly ninety percent of
the tariff's economic burden falls on US firms and consumers.
And it goes on talking about the first eight months
of twenty twenty five, ninety four percent of the tariffs
born by the US. So they are an economic headwin.
They are a tax. And that is why, more than
anything else, why the Supreme Court said presidents cannot raise taxes,
and that's what this is. It is a tax. Congress
is the only one that can raise taxes. And speaking
of the Wall Street, General Kimberly Strassel is one of
the op ed people at the Wall Street Journal, and
she weighs in with a longer term, a bigger view.
This is the other thing. Donald Trump gets so mad
because he thinks it's a personal upfront to him. No,
it's about him and future presidents. It's about can a
president that does a president have the power to raise
taxes all by themselves or in this case, raise tex
p Here's Kimberly Strassel.
Speaker 3: Well, look, I mean there's going to be a lot
of people that are disappointed by this, John no less
the folks in the White House. But I'm kind of
looking at this as a big picture perspective, and I
think some really important things were said here today that
people can take some consolation in beyond the immediate tariff question.
I mean, one of this this was a good decision
on questions of separation of powers, something that this court
has been very, very focused on. You know, the power
of the purse is one of Congress's main checks and balances,
especially against an executive. And I remember when the president
announces tariff's being very worried about what kind of president
that might set. We know democratic presidents are even more
keen to use presidential power I had visions of future
Democratic presidents saying, Okay, well, I'm going to decline, declare
an international climate emergency and tariff the heck out of
people who don't fall in line with climate objectives or
other such ideas like this. The other thing, just again
from a big picture perspective, is this destroys I think
democrats arguments that the court is in the pocket of
this administration. You know, you had at least two of
the justices that the President himself appointed to the Supreme
Court who were in the majority of opinion on this.
The debates between the justices were all in very good faith,
I think, on some very important issues of major questions doctrine,
the extent of a president's foreign powers, statutory readings, and
non delegation doctrine. There's a lot of heady legal dispute
going on here, but it goes to show that this
court is very focused on the law, not on politics.
Speaker 1: I really liked your point about the fact that that
could you imagine Joe Biden doing tariffs based upon climate
policy or wherever it might be. He tried to go there.
But that's why presidents haven't been doing this is because
it hasn't. It hasn't been kosher. Let me put it
that way. Don Bacon, retired Air Force General, Congressman from Nebraska.
This is his thought.
Speaker 5: Well, he didn't read Neil Gorsuch's position on this, and
that was the majority position in the ruling, and that
is what is now law, unless it gets you changed
later down the road. I think if he goes ahead
with his ten percent global tariff, they will be brought
up for a vote in Congress and it will be defeated.
It may not have a veto proof majority, but it
will have a majority that will go against that that
ten percent global tariff. So I think the President is
making a mistake here. Again, he's quoting a lot to
support this from the dissenting position, but that is not law.
And so I think the ten percent global tariff also
undermines his argument about these tariff's being reciprocal. Right, This
is what he was trying to defund the tariffs on,
and I think a lot of folks like me never
really believed it. I think he's been a tariff support
since the nineteen eighties, and I just want to come
back and tell my fellow Republicans we have opposed tariff
since World War Two. It's been the conservative position. The
last president to support tariffs that was a Republican was
Herbert Hoover, and it exacerbated the depression, the worst depression
that we ever had. So the conservative position here is
that tariffs are bad economics, it's bad politics, and we
should defend that.
Speaker 1: I have not changed. Well. The lawsuit that started this
whole thing about tariffs, it's a number of attorney generals
around the country and mostly Democrats. All of them Democrats
because no Republican attorney general. They were too afraid to
go up against Donald Trump's tariffs. But there were over
one hundred companies, including Costco a lot and they import
a lot of products. The individuals that brought the case
Vos Selections versus Trump, supported by the Liberty Justice Center.
That's a toy store, a toy a toy story. He said,
I've getting killed because the toys that I sell or
made some other part of the world. In May of
twenty twenty five, the Court of International Trade ruled these
tariffs were unlawful and blocked them. But nobody paid any
attention to them. So I'm not surprised that they ruled
the way they did. I thought they were actually going
to say, all right, you can do reciprocal tariffs. Somebody
charges us three percent, we can charge them three percent,
But you can't do these. I'm mad at them, or
I want to change their behavior. I want to use
these for foreign policy reasons. Uh huh. You can do
other things, but you can't use tariffs to create your
foreign policy. Jonathan Turley, Constitutional law professor George Washington, Well,
let's get Thury in here.
Speaker 6: It is indeed, and this is what some of us predicted.
This was a case where the administration was at a disadvantage.
AJIPA does not refer to tariffs, and tariffs are a
big deal under the Constitution. It's a critical form of
revenue that is left to Congress. And I thought that
the administration did a terrific job in front of the
Supreme Court. They could not have argued this case better,
in my view. But you can't really escape that language.
And right out of the bat when that oral argument began,
the Chief Justice John Roberts said, this is a tax,
and you could almost hear the administration gulping because that's
not what they wanted the justices to take from their argument,
but and others clearly view this as a tax that
rests with Congress. Now there's a lot of runway still
for the administration. We have to really get into this opinion,
into some of the weeds to see if it is
perspective only. But also the administration is other tools in
its toolbox. It can actually impose tariffs under other statutes.
So this night is hardly over for the administration when
it comes to tariffs.
Speaker 1: Here another constitutional law professor, John You used to be
a deputy Attorney General. Here's John Yu.
Speaker 7: This is a major restriction on a president's ability to
act during times of emergency. There are two questions, is
there an emergency at all post by the trade deficits,
and then did Congress give the president the power to
impose tariffs under the EPI Statute when it said when
Congress said the president can regulate quote unquote regulate economic
relations with another country. Notice here in the opinion, the
Court does not touch the question whether in the national emergency,
so that part of the president's power is still preserved.
The part that's been narrowed, of course, as the others
have said, is the word regulate does not include the
power to impose a tariff. That doesn't mean the president
can't do this in the future. There are other trade
laws which explicitly delegate from Congress to the president the
ability to post tariffs. The thing that President Trump has
to do, which he didn't do in these tariffs. Remember
he did these worldwide at once for all products YEP. Essentially,
Court is saying you have to go back to the
driving board, and you have to do it country by country.
Individual countries have to be shown to be engaged in
unfair trade practices or have to be shown to be
a national security threat, and has to be a report
and it will take President Trump roughly a year if
he really wants to go forward with the tariffs. Now,
I'd like Shannon's point a great deal. This might be
a blessing in disguise because we just had GDP report
numbers from last year that show the economy significantly slowed.
Speaker 6: If all the tariffs.
Speaker 7: That President announced are immediately eliminated and he has to
take about a year, if he really chooses to do
it again, has take about a year or to impose
these tariffs again, they might actually have a positive boost
on the economy, which could have a very positive effect
on President Trump and Republicans by the midterm elections.
Speaker 1: You hear what he just said. He said, if it
takes the president a year to get this next round
of tariffs that he wants to do actually up and going,
that it might actually help the economy and help the
president in the midterm elections because the tariffs have suppressed
the economy, and the John used reference. We got our
numbers out this morning for fourth quarter gross domestic product,
a shocker one point four percent growth that is much
slower than had been expected. There's fourth quarter. There was
a slowdown in consumer spending fourth quarter Christmas shopping. Still,
there was a slow down in consumer spending growth of
one point four percent in GDP for the quarter. So
spending clearly being done by those at the top of
the income brackets, not by the rest of them. So
go back to Joe Biden twenty twenty three, GDP two
point nine, twenty twenty four, Joe Biden two point eight,
twenty twenty five. When you put all four quarters together,
two point two, so the economy is slowing. Then you
look at the tariffs have been in effect since April first,
and how have the how has the trade deficit gone
not well. We had a surprise a seventy billion dollars
trade deficit last week month of December, and that was
up from fifty five billion that was expected. So the
trade deficit has gotten worse. The growth in the economy
has slowed down. The government, you can take the government
shut down damaged some of that fourth quarter number by
about one percent. But I'm telling you this. I think
John You, who's a lawyer but he also knows his economics, obviously,
is that you get these tariffs out of there, and
the economy should do better, not worse. And that's why
the market took off triple digits when the news came
out that the court shot down the way that the
president was doing these tariffs. John You referred to something
about Shannon what she said. Let's play here's Shannon Boreen
with some of her comments. She's also a lawyer.
Speaker 8: Well, I think that we just need to think about
some of the political impact, which you guys have been
unpacking with our fantastic guests the last few minutes. But
think about a couple of things here. First of all,
Democrats have told us incessantly that this court is corrupt,
that it is in the pocket of President Donald J. Trump,
that it cannot be trusted, that it needs to be
term limited, that it needs to be expanded. Today we're
getting all of these pressers, the press releases, the statements
on the you know in Washington, of people saying Democrats
saying the Court got this right. So does it quiet
at all any of this political language that has been
about modifying the Court, these efforts that Democrats say, you know,
if they retake the House and Senate, that they may
make moves to modify the Court as we now know it.
So if that happens, we should remember today where they
are in full praise of the Court and very happy
about what it's done. There's also the political impact on
the GOP side. This has been mentioned a little bit
that we all know members that we've talked to on
the GOP side of the aisle who are silently, quietly
breathing a sigh of relief. There have been Republicans on
Capitol Hill who have voted against some of the president's tariffs.
They think it's actually hurt the economy and hurts their
ability to go out and make the argument that this
president is working to make things more affordable. So some
of them quietly happy that this will maybe reset the
markets and some of what we're seeing in our economic data.
And listen, the President can now say, you know, it's
a Supreme Court's fault. I tried, these terroriffs were working.
It's about the justices. And then pivot to these other
options we know he has for other tariffs.
Speaker 1: Happen with all that, I like, Shannon, But so if
you take away the tariffs, do you think the companies
are going to lower their prices by the amount of
the terriffs they were paying. I don't think so. I
think they'll keep the prices where they were. They'll just
make more money. They're thrilled, but I don't see how
this is going to actually make things more affordable. The
tariffs do not make things more affordable. They make things
more expensive. But once you get rid of the tariff,
you think companies are going to lower the price. I
don't think so. All right. The other big item that
we're watching as we head into this weekend is about
Iran and are we going to go to war with
Iran or not. Here is Iran's foreign minister talking about
the fact that they promise they double triple promise that
they if they get a nuclear vision nuclear power, that
they'll only use it for peaceful reasons.
Speaker 4: The US side has not asked for zero investments. What
you are now talking about is how to make sure
that Iran's nuclear program, including enrichment, is peaceful and will
remain peaceful forever.
Speaker 1: Yeah, if it was hard to hear, he said, yeah,
we want to enrich the uranium, but only for power,
and we'll keep they will always be peaceful. Never ever, ever,
will we do anything it's not peaceful. That's Iran, the
number one terrorist sponsor in the world. So you can't
believe a word they say. They asked the President on
Air Force one last night about this, Is he okay
with Iran doing a little bit of enrichment.
Speaker 6: Well, do you accept anything less than zero nuclear in Richmond?
Speaker 3: I don't.
Speaker 1: We don't want any enrichment. We don't want Richmond. So
Brett mcgerg who a former National Security Council guy for
the Mideast, he knows that area like the back of
his hand, and he has some concerns that he wants
to pass along.
Speaker 9: I think I think President Trump that there could be
a diplomatic off ramp I think he would take it,
and he seems to think that maybe Iran is going
to come in with something that he can defend. I'm
just not seeing that in the cards because the Supreme leader, Haminade,
despite what Iron's foremister might say, Hominae a supreme leader,
the only decider in Tehran, has really doubled down on
we're not going to talk about missiles, we're not going
to talk about nuclear and Richmond and very DeFi in tone,
and he's the guy that matters. So I think this
is heading now. And given the scope of this military deployment,
it's really massive. It is an operational deployment. I think
this is heading for a military operation. Absence some breakthrough,
we all hope diplomacy can succeed. But as Kevin said
and done, these talks with Iron on nuclear issues and
other issues, they're very complex and very technical. They take
a lot of time. I'm just very skeptical that in
the course of ten days or so you can have
a breakthrough.
Speaker 1: Yeah, the President basically said, you'll give Iran ten to
fifteen days. He said that should be enough time. But
remember the last time before we attacked, he said, I'll
make a decision within two weeks, where he's kind of
doing the two week thing again, and he says, I'll
make it. You know, we'll give them ten to fifteen
days to decide what they want to do. So to
wrap this up, we'll see what the Trump administration comes
up with regarding these tariffs. He said he's imposing a
ten percent across the board pariff on everything immediately, but
we'll see if that has to get some sort of
congressional blessing. It's under Section one twenty two, but it's
only good for one hundred and fifty days before the
president is required to go back before Congress. So we'll
see what the massinations are to make that take place.
But it just leads everybody that's doing any sort of
business internationally up in the air about what are the rules,
what will be the rules to keep changing? Awfully hard
for businesses to plan their financials. Wall Street, like I said,
with the news from the Supreme Court, the stock market rallied, strongly,
settled down, but still finished with a very nice day.
The Dow up two hundred and thirty at forty nine
six twenty five s and P up forty seven. Nasdaq
up two hundred and three gold. Nice day, up one
hundred and twelve dollars to five thousand and one oh
nine oil. Surprising, not much change up just six cents
to sixty six dollars and some change for a barrel
of oil. So that's it for today. Thank you for
coming by.
Speaker 5: We will be.
Speaker 1: Back on Monday. Have a great weekend. We'll see you
here then