There is hope for Fed’s political independence, as SCOTUS allows Lisa Cook to remain for now. Arguments will be heard next year.
Last I looked the gasoline price here in Silicon Valley, California, is over five dollars a gallon.
The White House Rapid Response team is hailing a new report by GasBuddy indicating the national average for a gallon of gas has now dipped below $3 per gallon.
That sub-$3 price is the first of President Trump’s second term and the first time consumers have seen it drop that low since the height of the pandemic.
GasBuddy, a company that allows users to track gas prices in real time, reported the national average at $2.986 - down nearly 20 cents cents from just a month ago, and 15.2 cents from one year ago.
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Fed’s rates decision:
Chairman Powell: Rate cut in December not a forgone conclusion.
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Supremes appear skeptical re: Trump’s power to set tariffs:
What would be the impact on the economy if SCOTUS rules against the administration?
Inflation-wise, I cannot see it do anything but bring prices down slightly when importers no longer need to pass the cost of the tariffs to consumers. Lower inflation should be better for the economy than higher inflation usually.
But what are the odds that Trump would take that legal setback and not try to implement some other scheme to get around the SCOTUS decision? Like getting rid of the filibuster and having Congress approve tariffs properly.
And there’d be the issue of implementing refunds. If I paid a higher price for goods that had tariffs declared illegal by SCOTUS, how will I get reimbursed for the higher price I paid for the goods? What about the trade agreements made with various countries to agree to lower tariffs compared to illegal tariffs? Like Justice Barrett summarized a mess. So that’d make it even harder to predict actual impact on economy.
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This is my fear. The GOP had a hard reality check on Tuesday, and desperation can make people do foolish things, like getting rid of the filibuster.
Trump might have created the imminent mess with the deliberate intention of forcing SCOTUS to go along with his unconstitutional power grab. Will SCOTUS do the right thing by law, or will its members travel the less messier path?
The alternative is to have Congress micromanage the tariffs. This is unworkable because of the complexity of tariffs. I just looked up the Canadian tariffs on US dairy products. The President pointed out that Canada has 400% tariffs on US dairy products. The Canadians claim that these only apply for imports over an arbitrary quota (that they set). They say that US farmers don’t actually pay the tariff. But is this because they don’t bother to try to export to Canada?
https://www.farmprogress.com/farm-policy/the-real-story-behind-canada-s-250-dairy-tariffs
You are not taking into account the increase in the number of US jobs as foreign companies build plants in the United States to get around the tariffs.
Here’s what the DuckDuckGo artificial intelligence says about this
Impact of Tariffs on Foreign Investment in the U.S.
Increased Foreign Investments
Foreign companies have significantly increased their investments in the United States, driven by the economic environment shaped by tariffs. Notable investments include:
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IBM: $150 billion over five years in U.S. growth and manufacturing.
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Taiwan Semiconductor Manufacturing Company (TSMC): $100 billion in U.S. chip manufacturing.
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Johnson & Johnson: $55 billion for manufacturing and R&D, including a new facility in North Carolina.
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AstraZeneca: $50 billion for medicines manufacturing and research.
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Roche: $50 billion in U.S. manufacturing and R&D, creating over 12,000 jobs.
Reasons for Increased Investment
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Market Access: Tariffs create a protective environment for U.S. companies, encouraging foreign firms to invest locally to avoid high import costs.
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Manufacturing Incentives: Companies are motivated to establish or expand manufacturing operations in the U.S. to benefit from lower tariffs on domestically produced goods.
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Job Creation: Investments often lead to job creation, which is appealing to foreign companies looking to enhance their market presence in the U.S.
Conclusion
The tariff policies have led to a notable increase in foreign direct investment in the U.S., as companies seek to adapt to the changing trade landscape and capitalize on the opportunities presented by a more favorable domestic manufacturing environment.
The White House
BrookingsJust because something is perceived as being complex doesn’t justify ignoring constitutional laws. It’s a slippery slope. Also, it’s inevitable in a democratic system that the pendulum will go back, and the Dems will control Congress again. Any legal door you open today because something is too complex can be used tomorrow for some other purpose.
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The president says that his authority is a 1970s law that delegated the Congress’s tariff powers to the President in an emergency. The Constitution certainly allows for the necessity for Congress to delegate some of its powers to the executive.
here’s a discussion of the oral arguments at SCOTUS
The oral argument yesterday on the Trump tariffs was fascinating as justices struggled with the knotty question of whether a president has the sweeping authority claimed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).
As to what happens when the Democrats seize power again, we are already in a shooting Civil War. It may become more widespread.
Sadly, president Trump lies often, so that’s that. He lies unnecessarily too, just like a troll. Is he lying about this issue too? I don’t know. But if it were crystal clear he has the authority, you can be sure the Supremes wouldn’t had said what they said in yesterday’s hearing.
Last I checked, IBM and J&J were not foreign companies. Commitments like these can be, and in some cases have already been cancelled before they’re completed. And, assuming those AI examples are true, there’s no easy way to know whether the domestic corps “increased investment” was caused by tariffs or if they were planned long ago anyway. The Brookings article linked in your post doesn’t mention increased investment from those companies, but it does mention the opposite: “Ford recently commented it would be doing less investment in the United States due to rising input costs from tariffs.”
This is not AI, it’s a garbage generating machine.
Some companies may invest more, some less. I don’t know the balance. AI is certainly not able to figure that out reliably either IMO.
Also, you’re not taking into account the jobs lost to AI and cost-cutting. Apparently, this was a fairly significant number lately: October job cuts
So just like politicians BSing that tax cuts pay for themselves in added growth, I’m not buying it until I see clear signs of it.
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We may be seeing evidence of the financial return from tariffs soon
We shall see. Here’s a list from the White House of the nearly $9 Trillion in new commitments
I’ll believe it when I see it. WhiteHouse[dot]gov is now full of political propaganda and I don’t trust anything on there.
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That’s just tax accounting to me. American people/businesses got taxed extra for foreign goods they bought and that money would be returned to them. Which is clearly why Bessent stated that the $2000 dividends may well be in the form of already baked in tax decreases. Not really a sign of growth or investment in the US either way.
And for the sake of everyone involved, I hope that money does not get distributed in an another stimulus, especially not until the SCOTUS rules on whether the tariffs were legal in the first place. The scenario in which people would be handed stimulus checks with money that later has to be refunded to importers would surely be a headache.
Other reason I hope it’s not going to be another handout is that those have proven in recent memory to be very inflationary. The last time I got a $2000 check, it sprung 10% inflation the following year. No thanks.
To be fair, that was already the case with the previous administration as well. White House press releases are 100% propaganda now. I’d assume the statements are grossly distorted alternative facts carefully picked and chosen to fit a PR lalaland narrative. Factually, they’re essentially worthless. Look at this one, there is not a single link to a single primary source. As far as I can tell, numbers might as well be completely made up.