Trumps ketchup dripping down the wall

The raging reaction by President Donald Trump to the US Supreme Court’s ruling on his “emergency” import tariffs brought back memories of the testimony by former White House aide Cassidy Hutchinson to the January 6th committee about his alleged food-throwing behavior.

His rant put his weaknesses on full display. We know his strengths: he is a master snake-oil salesman, a master at self-marketing, a master at self-enrichment and a master at the use of fear to get his way. What hisWhite House press conferenceshowed, however, is that he is a terrible loser, in ways that promise ultimately to undermine his own power and support.

Not for Trump the graceful, even if grudging, notes of respect that would have been expected from any other president in that situation – no respect for the judgement of the nation’s highest court, two of whose 6-3 majority opinion signers he himself appointed during his first term as president, or for the rule of law or the constitution. No, instead he had to rantlike a modern-day King Lear, yelling all sorts of outrageous accusations at the justices – none of which anyone sane will believe.

His reaction was all the more self-destructive given that his secretary of commerce and his US trade representative had prepared a perfectly reasonable back-up plan in the expectation that this ruling would come.

The ruling did not declare all of his tariffs illegal, just those that he had chosen to impose using the International Emergency Economic Powers Act of 1977, which admittedly account for a majority.

The fact that Trump was simultaneously claiming that the US economy was the “hottest” in the world and that it faced an economic emergency would have struck anyone with an ounce of scruple as somewhat incongruous, to say the least. But he did so not because he believed that an emergency existed but, rather, in order to maximise his own power.

Let no one forget that since he took office on January 20th last year he has enjoyed the almost uninterrupted and supine support of Republican majorities in both Houses of Congress.

So a president who wanted to enact a tariff policy could easily have followed the conventional, legally water-tight route of presenting his plan for approval by Congress, a method that can be speeded up by a legal grant of so-called “fast-track” negotiating authority, enabling any agreements he reaches with other countries to be approved as packages rather than line by line.

There can be little doubt that in the spring and summer of 2025 such a plan would have passed. But he chose not to present one. He preferred the ability to decide tariff rates personally on a daily or even hourly basis, using threats of them as intimidatory tools of foreign policy and relishing the sense of unpredictability and personal power that this produced.

His contempt for Congress, even one controlled by his own almost entirely supplicant party, matches the contempt he has now shown towards the Supreme Court.

The importance of this decision is that from now on his powers will be curtailed, though not immediately. His back-up plan was to impose a 10% global tariff under a power known as Section 122 of a different, 1974 law, but this requires approval by Congress after a maximum of 150 days if the tariffs are to be extended. He then, as if to show he can still do things on a whim, arbitrarily raised the figure to 15% the following morning.

The use of this power could be open to legal challenge, for example on grounds that the claimed “fundamental international payments problems” that support it do not exist. America’s deficit on the current account of its balance of payments last year was 3.5% of GDP, which is not exactly enormous.

A main reason why the deficit is that large is, anyway, that the federal budget deficit last year was a much more extreme 6.5% of GDP, thanks to Trump’s own tax-cutting and high-spending “big beautiful bill.” If payments problems emerge, they will have been his own doing. Even so, legal challenges, if they emerge, will take time.

However, by July 24th, the deadline for when that extension-approval will be required, the fact that the mid-term Congressional elections will be less than four months away could make a number of senators and representatives question the wisdom of a policy that is plainly unpopular with voters.

One reason for the unpopularity of tariffs is now likely to come into the spotlight as companies and business associations ready themselves to claim refunds of the US142 billion in tariffs that was paid out last year, according to estimates from the Yale Budget Lab.

It is an open question as to who should receive those refunds, one now likely to be played out over months and years in an array of cases in lower courts: Did US importing companies pay the tariffs or did their customers pay them through higher prices?

What is certain is that contrary to Trump’s repeated claims, no foreign country has paid even a cent of these tariffs. They may have suffered some reduction (or likelier diversion) of their export trade, but they have not paid the tariffs. The court cases and associated hullabaloo over entitlements to refunds will make it abundantly clear that the tariffs are taxes on Americans, not foreigners.

They will also make it clear that therecent attack by Kevin Hassett, head of Trump’s National Economic Council, on an economic study about the impact of the tariffs by the New York Federal Reserve Bank was as outrageous and baseless as were his boss’s attacks on Supreme Court judges.

Hassett claimed that theNew York Fed’s paper showing that consumers and companies had taken the brunt of the tariffs and that those taxes had weighed on the US economy “wouldn’t be accepted in a first-semester economics class.”

Yet every first-semester economics student, and indeed every conventional Republican before Trump and Hassett, has known that raising taxes takes money out of circulation, as somebody has to pay them.

As the US trade deficit has not fallen during the past year, as total employment in manufacturing fell last year and as investment in manufacturing did not rise, it is clear that the New York Fed study was sound, even if the period it was able to cover was inevitably short.

An intelligent response would have been to argue that it will take time for the claimed rewards of the tariff barriers to be seen. But denigration and insults are the favoured currency of this administration, not respectful argument.

This article was originally published on Bill Emmott’s Global View. It is republished with permission.