Neural Newscast

[00:00] Richard Lawson: From Neural Newscast, I'm Richard Lawson.
[00:02] Talia Brooks: And I'm Talia Brooks.
[00:04] Richard Lawson: The Supreme Court has just issued a definitive ruling that strikes at the heart of the current administration's economic platform.
[00:11] Richard Lawson: In a 6-3 decision today, the court found that President Trump overstepped his authority when he ordered sweeping tariffs on imports from nearly every country in the world.
[00:20] Richard Lawson: The ruling targets the use of the 1977 International Emergency Economic Powers Act, or IEEPA, as a tool for levying these taxes.
[00:30] Talia Brooks: It's a rare instance of this conservative-led court reigning in executive power.
[00:35] Talia Brooks: Chief Justice John Roberts wrote the majority opinion, and he was joined not only by the court's three liberals, but also by justices Amy Coney Barrett and Neil Borsage.
[00:46] Talia Brooks: Roberts was very specific in his writing, stating that if a president wants to unilaterally impose tariffs of unlimited amount and duration, they must have clear authorization from Congress.
[00:57] Talia Brooks: He noted that the 1977 law simply falls short of that requirement.
[01:02] Richard Lawson: The dissent was equally notable, with Justices Clarence Thomas, Samuel Alito, and Brett
[01:08] Richard Lawson: Kavanaugh siding with the White House.
[01:10] Richard Lawson: This case was different from previous challenges that played out on the emergency docket.
[01:14] Richard Lawson: This time, the court ordered full briefings and expedited arguments, making it the first
[01:19] Richard Lawson: real opportunity for the Justices to say no to the president's expansive use of trade
[01:25] Richard Lawson: authority.
[01:25] Richard Lawson: The tariffs in question represent about half of all the import taxes the government is currently collecting.
[01:32] Talia Brooks: The financial scale here is massive.
[01:35] Talia Brooks: The federal government has been collecting roughly $30 billion every month in tariffs,
[01:40] Talia Brooks: which is about four times what it took in before the president returned to office.
[01:45] Talia Brooks: While the administration has claimed these costs are being paid by foreign suppliers,
[01:50] Talia Brooks: research from Harvard and the University of Chicago tells a different story.
[01:54] Talia Brooks: Economist Gita Gopinath and Brent Neyman found that nearly all the cost of these tariffs
[02:00] Talia Brooks: are being absorbed by U.S. importers and eventually their customers through higher
[02:07] Talia Brooks: prices. We've also seen significant shifts in where goods are coming from. At the
[02:11] Talia Brooks: Port of Los Angeles, cargo from Asia has slowed.
[02:15] Talia Brooks: In 2024, China accounted for about 12% of U.S. imports.
[02:20] Talia Brooks: But by last September, that share had dropped to around 8%.
[02:24] Talia Brooks: Importers are desperately trying to shift production to countries with lower tariff rates, while the White House has already had to roll back or delay taxes on items like coffee and bananas to avoid making the cost of living crisis even worse for voters.
[02:40] Richard Lawson: Now that the court has ruled the specific IE EPA tariffs unconstitutional, the question is what happens next?
[02:47] Richard Lawson: Justice Barrett mentioned during oral arguments that a refund process could be a mess.
[02:53] Richard Lawson: However, some legal experts suggest that since tariffs bills are computerized,
[02:58] Richard Lawson: identifying eligible payments might be more manageable than expected.
[03:02] Richard Lawson: The Customs Agency has even indicated it might waive certain deadlines to facilitate these refunds.
[03:08] Talia Brooks: Richard, the administration isn't likely to give up on its trade agenda entirely.
[03:13] Talia Brooks: They've already promised to replace any illegal tariffs with taxes based on other statutes,
[03:18] Talia Brooks: where the president's authority is more established.
[03:21] Talia Brooks: But those alternatives are much more restrictive.
[03:24] Talia Brooks: For example, Section 122 of the Trade Act of 1974
[03:28] Talia Brooks: allows for tariffs to address trade deficits,
[03:31] Talia Brooks: but they're capped at 15% and can only last for 150 days.
[03:35] Talia Brooks: Other laws require extensive fact-finding by the Commerce Department
[03:39] Talia Brooks: before any action can be taken.
[03:41] Richard Lawson: It certainly forces a more methodical approach
[03:44] Richard Lawson: than the current roll-of-the-bed strategy the court just struck down.
[03:48] Richard Lawson: The president has consistently called himself a true believer in tariffs as a negotiating tactic,
[03:54] Richard Lawson: But today's ruling creates a much higher bar for how that leverage can be used moving forward.
[04:00] Richard Lawson: We'll be watching closely to see how the Treasury and the U.S. trade representative
[04:04] Richard Lawson: react to this shift in the legal landscape.
[04:07] Richard Lawson: I'm Richard Lawson.
[04:08] Talia Brooks: And I'm Talia Brooks.
[04:10] Richard Lawson: Thank you for listening to Neural Newscast.
[04:13] Richard Lawson: Neural Newscast is AI-assisted, human-reviewed.
[04:17] Richard Lawson: View our AI transparency policy at neuralnewscast.com.