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👋Hi Friends,
📆This Week’s Topic
This week, we will be discussing tariffs. We haven’t mentioned tariffs in a while and there have been some new updates affecting the tariffs. I know it is important for my readers to be Trump has been playing and changing the tariff rules as he pleases, whenever and wherever he wants. This has led to a round of complaints from businesses and other countries. There have also been some important lawsuits filed in federal courts challenging the validity of Trump’s tariffs.
🏛 History Of Tariffs
As we know, when Trump came into office, he wanted to impose tariffs. He placed a started by placing a tariff on Canada, Mexico, and China. At the very beginning of April, he expanded his tariffs to be taxing over 30 countries. I explained more about what happened with the tariff expansion in this article. After the market dropped 6% , he suspended the higher reciprocal tariffs in all of the 30 countries Trump put a tariff on originally except china. But, the 10% baseline tariffs is still in effect. Now, he keeps playing with the tariffs and changing their values.
📊 What’s New
Very recently, the court of international trade and the case of the legitimacy of the tariffs were brought to court because of the 10% baseline tariffs and the high reciprocal tariffs that ranged from 11-50% tax. Last Wednesday, the court of international trade ruled that some level of the reciprocal tariffs was illegal. They also stated in their ruling that any changes to the tariffs needed to be authorized by congress. Short after the ruling with the court of international trade, a U.S Federal Court of Appeals located in Washington DC granted the permission back to the federal government of the tariffs that were blocked by the previous ruling. For example, the 10% baseline tariff that was blocked by the court of international trade was reinstated after the federal court ruled to bring it back.
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🔚 Outcome
The outcome is that after Trump’s term, the tariffs are likely to be removed. [That’s true but readers want to know what will happen in the near future. You could talk about continuing fights in the courts over this issue. The question will be whether Trump can impose tariffs whenever he wants or whether Congress has to authorize him to put tariffs in place (in the way they haven’t)]. This is because tariffs have already caused major downturns in the economy. Also, tariffs have had a history of bad effects.
⛱ Consumer Effect
This is one of the first good news for tariff for consumers. The tariffs are being challenged in a number of court cases, and the courts have been receptive to the arguments that Trump exceeded his power in imposing tariffs on his own. These cases mark the first time Trump’s tariffs have been ruled illegal in the courts. For consumers worried about rising prices, successful court challenges may provide some relief. Although after the first court case with the court of international trade was ruled to strike down many tariffs, since a US court fought back and put the tariffs back up this could lead to a back in fourth between US courts and the court of international trade.
⏳ Final Summary
In Summary, the court of international trade ruled that high reciprocal tariffs (11-50%) and the 10% baseline tariffs were illegal and struck them down in the ruling. In addition to the tariffs being struck down the government was unable to change the tariffs without Congress signing off on it. Shortly after, a US federal court of appeals reinstated the tariffs that were struck down with the ruling from the court of international trade. Other courts have made rulings about these tariffs that have had a similar outcome. For both consumers and businesses international goods have had major inflation since the tariffs were announced. Especially the fact that businesses are increasing the costs all around. Ever since then tariffs doubled their tax, legal action has been taken and is in the works.
🙏Thank You & Important Information
Anyway, thank you so much for reading this edition of Friday Finance. We hope you are enjoying Friday Finance. If you have an idea, a comment, or anything else you want to say on the sidebar (or at the bottom for website) there is a comment button/section to share your opinion. Anyway, have a great week and I will see you next week.
Jacob Gans
Friday Finance