The former trade architect of President Trump, Wilbur Ross, warns that the president's commitment to tariffs is unwavering, making a U-turn a 'pretty horrific decision'. As the Supreme Court prepares to hear a pivotal case on the legality of Trump's tariffs, Ross predicts a total defeat is unlikely. However, even if the court rules against Trump, he believes the president won't back down due to his deep investment in the tariff policy. This stance raises concerns about the potential global turmoil if all tariffs are struck down, prompting questions about who would bear the financial burden.
The legal basis for Trump's tariffs is under scrutiny, with the Supreme Court examining whether he exceeded his authority by using emergency powers. The administration has invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs, despite Congress's constitutional right to levy duties. This move has sparked debates over the interpretation of the IEEPA's broad language and the definition of a national emergency. Ross suggests that the court may 'cherry-pick' specific tariffs deemed politically motivated while leaving the rest intact, citing the 40% duty on Brazilian imports as an example.
The current political climate adds complexity to the situation. While union support for protectionist policies has blurred traditional partisan lines, Democrats may be more inclined to oppose Trump's tariffs in the current political climate. Ross views the current fight as a familiar risk-reward play, emphasizing the danger of creating ambiguity for companies that rely on predictable trade rules. He argues that markets struggle with uncertainty more than with actual losses, making the outcome of this legal battle a critical concern for the global economy.
