How the Supreme Court impact Trump’s tariffs?
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Breakfast Business with Enterprise Ireland on Newstalk. President Donald Trump's use of emergency powers to impose his signature tariffs faced a barrage of sceptical questions at the Supreme Court on Wednesday that signals the Supreme Court may be ready to intervene. Joining us on the line now is Professor of Economics at DCU, Edgar Morgan-Roth. Good morning, Edgar. Good morning, Tom. So, Edgar, first of all, talk us through what happened during the week.
So, at this Supreme Court hearing, where basically Trump's tariffs had been challenged as to whether he could actually impose them. Normally, it would actually be Congress who would have to approve of tariffs.
What happened at the Supreme Court regarding Trump's tariffs?
So, that's been challenged, and the Supreme Court heard evidence from the Trump team that as to why they think it's illegal for the president to impose these tariffs.
And they were asking a number of sceptical questions, and not only from the more liberal side of the Supreme Court, but also by justices who would be considered normally very conservative.
Yes, and I guess it's part of the function of the court to ask such questions. And when you look at the deliberations and the questioning, it all seems to hinge around whether these tariffs are seen as foreign policy or whether they're seen as fiscal policy, fiscal policy being kind of taxes. And as an economist, I would say the tariffs are really a kind of a tax, an import tax, and therefore they're a fiscal measure, and that would definitely have to be decided by Congress. The Trump team is arguing that, no, this is foreign policy, And therefore, the president has the powers to impose these.
Now, I was keeping an eye over the last couple of days on the betting markets because they tend to be a good barometer of what way these things are going to go. And they're laying odds at the moment that Trump is going to lose. If the Supreme Court does rule that Trump's tariffs, his signature tariff legislation, is illegal, what does it mean? Do we just end those tariffs overnight? Do we all breathe a sigh of relief and move on?
So I think under previous regimes or previous governments, previous presidents in the U.S., it would have been a government crisis and the tariffs that have been imposed would at least in the first instance be gone. With Trump, you just don't know. He could just simply ignore a court, and he seems to have done this previously, and or else he could turn to Congress and the Republicans in Congress and lean on them very heavily to pass his tariffs there. So I don't think these tariffs are gone, given the nature of Donald Trump. He will try and persist with this one way or another, and he may create some precedence in doing so.
And a lot of trade lawyers are saying that even if Trump does lose, there are plenty of other laws he can use in order to fill the gap.
Yeah, I mean, he's been kind of trying to use the system to get what he wants all the time. And he will find some measure and try again. And then it may yet again be challenged in the courts. But in the meantime... the tariffs are there. And of course, companies have been paying them.
Yes, you're right. Companies have been paying them. So if the Supreme Court, and I'm going to ask you a big question here, Edgar, if the Supreme Court rules that the tariffs are illegal, are those companies who've been paying sometimes tens of millions of euros in tariffs for some of the bigger companies, are they entitled to claim that money back?
Well, if they're found illegal, then that seems to be the case. If money was illegally taken from you, you normally have a right to get that money back. So I think a lot of people expect that companies would start a wave of legal actions to get the money back again. I'm not so sure that Trump would just say, well, pay it back. I would think he's going to try and stop that because, of course, it's quite a lot of money and the U.S. government has a deficit problem and a debt problem, and not having that money is going to make the problems they have even worse. And of course, there's a government shutdown at the moment because they can't agree a budget.
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