Friday’s Supreme Court ruling nullifying President Donald Trump’s signature tariff policy is an encouraging step toward protecting the balance of power between the executive branch, Congress, and the courts. The justices chose to rein in the president after many past decisions when they had allowed him to expand his power. But what will the ruling mean for ordinary Americans and for the economy?
Notably, stock and bond markets barely shrugged. Perhaps markets were indifferent because, although the Supreme Court took away Trump’s favorite tariff tool, the 1977 International Emergency Economic Powers Act, it left the door wide open for him to impose tariffs several other ways. These are all slower and make tariffs less of a one-man show. But taken together, the alternative paths to hiking tariffs can potentially take Trump to a similar worldwide tariff level. Indeed, Trump has already announced a new across-the-board 15 percent tariff to replace some of the levies.
Perhaps the other reason markets did not get more excited is that, for all the distortions tariffs cause in theory, and despite any upward pressure they put on prices, the U.S. economy has largely been rolling along. We’ve had decreasing inflation and robust growth since the second half of last year, punctuated modestly by government shutdowns.
