What Happens If the Supreme Court Overrules Trump?

Episode Overview

• An exploration of the potential legal and political consequences if the Supreme Court declares the Trump administration's tariffs illegal.
• A discussion of the government's possible "Plan B" to re-impose tariffs under different legal authorities, such as Section 122 of the Trade Act of 1974.
• An analysis of the process for companies to receive refunds for tariffs paid if they are ruled illegal, and the potential administrative hurdles.
• An examination of the geopolitical implications of such a court ruling, particularly concerning the USMCA and relations with Canada and Mexico.

Key Concepts

• The discussion centers on the hypothetical scenario where a court declares the administration's tariffs illegal and the immediate ramifications.
• The government may invoke "Plan B" strategies, such as using Section 122, which allows the president to impose temporary tariffs (up to 15% for 150 days) to address balance-of-payments issues, effectively buying time to develop a new approach.
• Companies that have paid tariffs deemed illegal would legally be entitled to refunds, as the payments would be considered illegally extorted taxes.
• However, it's anticipated that the administration could create significant administrative and legal obstacles to make the refund process difficult for businesses.
• The potential for the Supreme Court to uphold the tariffs is also considered, which would signal a vast expansion of presidential power over international commerce and could embolden the executive branch to apply similar measures to other areas, like capital flows.

Quotes

• At 00:32 - "What will happen with the tariffs that have already been paid and that sort of thing... I think those of us who have been tracking this quite closely have obviously been thinking about what would happen if they are ruled illegal." - The speaker sets up the discussion on the practical consequences of a court ruling against the tariffs.
• At 01:07 - "On the one hand, they're going in and saying the world will fall apart if you take this tariff authority away. And on the other hand, Kevin Hassett and Peter Navarro are going on CNBC and saying, you know, if we lose this case, don't worry about it because we have all these other things we can do." - The speaker highlights the contradictory arguments made by the administration regarding the importance of the tariffs.
• At 03:00 - "If a tax has been illegally extorted from you, you should be able to get your money back." - The speaker explains the clear legal principle that should entitle companies to refunds if the tariffs are struck down.

Takeaways

• A court ruling against the tariffs would not necessarily end them immediately; the administration has contingency plans to re-impose them under different legal pretexts.
• While businesses would be legally entitled to refunds for illegally collected tariffs, they should prepare for a potentially long and arduous administrative battle to reclaim their funds.
• The Supreme Court's decision will have profound implications for the balance of power, potentially either reining in or significantly expanding the President's authority over international trade and economic policy.