Source: Fortune
Summary
The Supreme Court’s ruling that Donald Trump’s use of the International Emergency Economic Powers Act to impose tariffs was illegal has given Trump an exit ramp from a failing trade war. The ruling has set in motion three developments that reshape the economic outlook for the better. Companies are collecting refunds on tariffs paid, with over $35 billion already processed, and the government owes roughly $166 billion plus interest. Trump has pivoted towards a more constructive, incremental deal-making posture, with his recent visit to China resulting in agreements for China to purchase more American agricultural products and defense exports.
Our Reading
The numbers tell one story. Trump’s trade war was failing, with tariffs alienating allies, stoking inflation, and uniting the American business community against him. The Supreme Court’s ruling has handed him a golden chariot, but will he climb in or stand in the street and argue with the driver? Companies like Walmart, Apple, and Home Depot are collecting refunds, and the boost to their earnings is enormous. Trump’s pivot towards incremental deal-making is a welcome change, but it’s unclear if he’ll stick to it. The China deals show what the new playbook looks like, with a focus on predictability and stability. The business community is rooting for Trump’s trade pivot to succeed, but history will record whether he had the discipline to negotiate without his trusty log.
Author: Evan Null
