The Supreme Court’s decision striking down the Trump administration’s tariffs left the president fuming and with fewer weapons in his trade war arsenal. The Opinion writers Binyamin Appelbaum and Emily Bazelon and editor Steve Stromberg discuss how the court’s ruling constrains the president, what he has done in response, and where trade policy should go from here as automation and A.I. continue to threaten American workers.
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The transcript has been lightly edited for length and clarity.
Stephen Stromberg: I am Steve Stromberg, an editor in New York Times Opinion. With me today are two Opinion writers, Binyamin Appelbaum and Emily Bazelon. Thanks for being here.
Emily Bazelon: Sure thing.
Binyamin Appelbaum: Glad to be here.
Stromberg: We’re here to talk about the Supreme Court’s decision to strike down many of President Trump’s tariffs, and what it means for the Trump administration and the American economy going forward. This is all coming to a head as the president prepares for Tuesday’s State of the Union address — with Justice John Roberts likely in the audience. And I should note, we’re recording this on Monday morning.
I want to begin with a top-line reaction to the Supreme Court’s decision from each of you. Emily, as a writer who teaches at Yale Law School and regularly covers the court, you’re one of the most qualified people on the planet to be commenting on this right now. Why don’t you start: What’s your top line?
Bazelon: Yeah, I mean, this is an important decision. First of all, it’s an important decision because President Trump made it a really big deal. He cares enormously about tariffs. We all have gotten that message. And so for the court to say no to him and to turn him back is a serious exercise of its power.
I think there are other reasons why this decision matters a lot: One, this is just the basics of what the court is doing here — it’s interpreting this particular statute, known as the International Emergency Economic Powers Act which conveyed some emergency powers on presidents. And President Trump was claiming that this included the ability to tariff.
And just as a matter of basic statutory interpretation, which is a lot of what courts do, I think the majority’s rejection of the Trump administration’s reading of the statute is pretty clearly the better reading. At the same time, there is an argument on the other side; Justice Brett Kavanaugh’s dissent scores some points. And so because there is some law on both sides, the fact that this 6-to-3 majority, which includes three conservatives, is rejecting President Trump’s reading becomes even more important. They could have gone in a different direction and they didn’t.
And then the third thing that’s important here is that this ruling is consistent with the court’s approach to some emergency powers that President Joe Biden tried to use. So, the court rejected Biden’s efforts to use broad emergency statutes for certain Covid-19 restrictions and to forgive student loans.
And so, to see the court here resolve a case similarly against a different president matters, in terms of the country’s perception of whether the court is being fair. If you’re just looking at the words of the statutes, you could decide to come out differently. But the overarching message here is really important for the accusation that the Supreme Court has turned into a bunch of hacks who do whatever Trump wants. This seems like a pretty clear response to that — not a direct response, but the court making it clear that it does not necessarily just knuckle under when Trump expects it to.
Stromberg: Binya, I wanted to get to you. What’s your top line out of the ruling last week?
Appelbaum: Well, I think, economically, this ruling is probably less important than the attention it’s getting. On the whole, the general orientation of American trade policy has not changed as a result of this ruling. President Trump retains significant and, for the most part, less vulnerable powers to impose tariffs. He clearly intends to continue to do so. And so, economically, I’d say, for the most part, it’s the same story that it was the day before the ruling.
Stromberg: At the same time, you have the European Union potentially suspending ratification of a trade deal that it struck with the United States in the wake of this ruling. What does the ruling mean, potentially, for a wide range of trade deals that Trump has already negotiated? Places like China, India, Indonesia — the list goes on.
Appelbaum: So, Trump struck a number of deals with countries within the E.U., and with several countries in Asia, that basically offered a discount off of the IEEPA rates for countries that were willing to provide some concessions to the United States. And the situation now is that Europe, and probably some of these other Asian countries, are going to say, basically: “Listen, we’re no longer getting value from this deal. Our tariff rates actually rise slightly (in the case of Europe) under this new arrangement, these new tariffs that you’ve imposed. And we’re no longer willing to give you the concessions that we promised if you’re not going to give us the benefits that you promised.”
It remains to be seen how disruptive that is. It is entirely possible that — given that the basic parameters remain the same — they’re able, relatively quickly, to arrive at a similar resolution that grants some concessions to these countries in exchange for the concessions that the United States wanted in the first place.
It’s also possible that this serves as the basis for tearing everything up, introducing some kind of new standoff, in which retaliatory tariffs begin to escalate. But given the incentives on both sides, if I had to bet, I would bet that we end up seeing a reversion to a new set of deals that, more or less, resembles the ones already in place.
Stromberg: Emily, you’re our legal expert here. Under these other statutes that Trump is using to impose tariffs — they are a little bit more explicit in the tariff authority that they give to the executive, right? So, is it clear that the Supreme Court will probably allow them to proceed?
Bazelon: Yeah, I think that’s right. One big difference is they require more process, right? So some of the executive branch has to go and do an investigation. One statute Trump is relying on sets a 150-day deadline for tariffs that the president can impose without congressional approval.
Stromberg: And, just to be clear, that’s the one that he’s using right now to impose this global 15 percent across-the-board tariff.
Bazelon: Yeah, exactly. The 15 percent one. So, yes, I think there’s this basic question: Does this president have the power to impose tariffs under these statutes? That seems like it’s pretty solid for Trump. But then there are going to be all these other questions about how he actually invokes them, what they amount to, the kinds of goods he tries to impose tariffs — because some of them are also limited for the reasons the president can give — and the kinds of things that can be taxed.
There’s also just this interesting political dynamic here, right? Which is that the Supreme Court could have done Trump and the Republicans a big favor by giving them a reason to end these tariffs, which are not popular and are not providing the benefits, economically, to Americans that the president has promised.And so, there is a sort of, “OK, let’s just move on to something else here.” And yet, Trump is so devoted to these tariffs that he’s going to double down, right?
He hates being defied, he hates being told he doesn’t have the power to do something. And so, as Binya said, we’re likely to continue with this — as close to the same regime as we’ve had before. And the administration will invite lawsuits, and other challenges will follow. And so, going into the next election, we’re going to continue to have this slight drag on the economy. And I think there will be a lot of questions from voters about how exactly the administration is addressing the problems they’re having with affordability in light of this strategy. Which just seems kind of perplexing if you just want the economy to be working well.
Stromberg: Binya, I want to get your analysis both on the economic side and on the political side. How does this all add up?
Appelbaum: Actually, I want to start on the legal side.
Stromberg: OK.
Appelbaum: Broadly speaking, the president has two kinds of tariff authority: He’s got the power to impose broad-based tariffs for the short term. And then he has these targeted powers to impose higher, narrowly targeted tariffs, essentially indefinitely.
And it has always been his plan to roll this out in two phases — to use his broad-based authority as a starting point, while his administration was pursuing laying the groundwork through investigations for imposing long-term tariffs in areas of the economy that he regards as particularly strategic or important.And it’s really important to understand something about that strategy, which is that there is very little question that there are countries that have violated the terms of the standard, as it exists in American law. In other words, there are clearly countries that have taken advantage of domestic subsidies and other unfair trade practices to gain an advantage over the United States, in areas like the production of steel and aluminum, in areas like the production of solar panels or electric cars — in all of these areas, it’s clear that other countries have used trade strategies that violate the letter of U.S. law. We have, for a very long time, taken a benign view of those activities and regarded them as, in the aggregate, economically advantageous for us, for everyone.
Stromberg: Explain that for a second. Because we get the cheap goods that result from those trade practices?
Appelbaum: Yeah. The basic idea that prevailed — until, essentially, the first Trump administration — in global trade was that trade was good and more trade was better. And that if countries were able to demonstrate that they could produce stuff cheaper than we could, then we should buy that stuff from them. And, we would get cheaper stuff and also be able to devote our own economic efforts to making the stuff that we were good at making, which was increasingly not physical things, but movies and financial services and other things like that.
So, if you think that that’s not right, it’s not that hard to make a legal case that it has to stop. And so, anyone who’s counting on the courts to stand in the way of Trump implementing that agenda probably should take a little time to think about the likelihood of that because he probably has the legal authority to do it. The question has always been not “Does he have the legal authority?” but “Should he exercise it?” And he seems awfully determined to do so.
Stromberg: Yeah, Binya, you’re reminding me that one of the few trade cases, trade investigations, we saw before the Trump era was on, in fact, Chinese solar panels. But it was remarkable because it was so rare. Many of Trump’s tariffs, though, often had little to do with economics. We used them to punish countries for all sorts of things. Will the court’s ruling force a big reset in how Trump conducts his foreign policy?
Appelbaum: It definitely ties his hands. So, Emily talked about what I think of as the largest consequence of this ruling, which is that it’s a victory for the rule of law. And, frankly, I was sort of interested to see whether this happened, but over the weekend, Trump signed an executive order repealing those IEEPA tariffs. I don’t underestimate that moment. That’s the president saying, “The Supreme Court told me to do this and I’m doing it.” That was a really good moment.
Bazelon: Good point. Can’t take that for granted.
Appelbaum: No. But the other big effect here — to my mind even bigger than the economic impact of the tariffs — is the impact on Trump’s foreign policy. Because this IEEPA tariff authority, the way that he presented it, really gave him this cudgel that he could wield at will against other countries for pretty much any reason.
And he used it for any reason. He used it to threaten Brazil over their treatment of Bolsonaro, the would-be dictator. He used it to try to preserve the supremacy of the dollar. He used it to demand foreign policy concessions on every continent. And he doesn’t have it anymore. And these other authorities, under which he’s now imposing tariffs, are nowhere near as broad.
So, the law he’s now using to impose tariffs to patch the hole created by the Supreme Court ruling, limits the maximum tariff to 15 percent. He’s already raised it to 15 percent. There’s nowhere to go from there. He can’t go to any of these countries and say: “We’re going to 20 percent.” The law says, explicitly, that 15 is the cap. So, he’s really lost one of his favorite tools for trying to put pressure on other countries.
Bazelon: That’s such a good point. And one of the ringing moments in the rhetoric of the Supreme Court decision comes from a concurrence from Justice Neil Gorsuch, which is this sort of ode to Congress and to legislating as a way of conducting business. Gorsuch says, “It can be tempting to bypass Congress when some pressing problem arises, but the deliberative nature of the legislative process was the whole point of its design.”
This is not President Trump’s favorite way of conducting business. And so, the idea that he can only go up to 15 percent for a limited time without Congress, he’s not going to like that, but that’s the box he’s now in. And it is the sort of background music of the Supreme Court’s ruling that the power to tax and spend is fundamental to Congress.And so, though I totally take your point, Binya, that Trump is going to do as much as he can on his own, there is this effort to return to a kind of world in which we have a legislature that actually plays a role here.
Now, of course, that is also going to be up to Congress, to actually perform its duties and responsibilities. But I think the Supreme Court is trying to set the table for that kind of shift.
Appelbaum: You can almost hear the court saying, “Hey, Congress, can we have a little help here?”
Bazelon: Exactly. And Congress is often kind of missing in action, and it is the first branch. It’s supposed to be playing much more of a role. So, anything that reminds us that the fact that Congress has receded is not the design, I think, is useful.
Stromberg: Yeah, Emily, that’s a really interesting point. Do you imagine that lawmakers, that Congress, will be a little bit warier about delegating this type of authority to the president in the future? Or, might even try to clot back when, perhaps, the political winds have changed a bit?
Bazelon: For a future Congress that is actually willing to take on the president, I think that is a hugely important task. There is a laundry list of changes Congress could make to try to restore more of its authority and check abuses of executive power. The idea that this Congress, right now — and really we’re talking about the Republicans who control this Congress — is going to fundamentally change how they interact with President Trump, I mean, I don’t know.
I’m curious what both of you think, but it seems like there’s this problem of misaligned incentives, where they still think there’s a greater danger from Trump coming after them, potentially facing Trump-approved primary challenges, and that it’s unlikely that this dynamic is going to really shift until after the midterms.
Appelbaum: I agree with that. I think that part of the question here is less about the theory than about the functional results. In other words, Congress gets madder about tariffs — the more pain tariffs are inflicting on the domestic economy, the less evidence there is that they’re serving the goals President Trump has described to revive American manufacturing, to rebuild the American economy. Those things aren’t happening.
The polls show that voters are increasingly unhappy about tariffs. There’s no evidence of a manufacturing revival — to the contrary, except in the very limited space around the build-out of A.I. And so, you’ve got this reality in which a lot of congressional Republicans are looking around and saying, “Hey, I’m up for re-election not that many months from now. Americans are unhappy about the economy. They think tariffs are part of the problem. They’re driving up the cost of living.” You could see, I think, an intensification of resistance to tariffs, which are fundamentally tax increases. Republicans have been very successful, for a very long time, opposing tax increases.
It’s been kind of amazing to watch them fall under the spell of this idea that this kind of tax increase should be the great exception. Not that hard for me to imagine them waking up and saying: “Hey, wait a second. We’re against tax increases.”
Bazelon: Right, but then they have to say: “Hey, wait a second. We’re against President Trump’s favorite tool and biggest part of his agenda.” And that is a harder sentence for them to utter, right?
Appelbaum: Sure it is. And betting against him has not been a good bet for a while now. But he is going to be a lame duck. He is going to be facing the potential of a change of control in either house of Congress in the midterms. I don’t know. I’m not predicting that it’s going to happen, but you can, at least, see some of the pressures building against his ability to continue imposing tariffs unilaterally and without any pushback from Congress.
Bazelon: Totally. And he is also unpopular. So, if the normal rules of politics applied, then I would be more — I’d see more room for the path that you’re talking about. And maybe they will begin, more and more, to apply, right? Trump has had this kind of magnetic hold over his party, because his supporters are so devoted and they’re such an important percentage of Republican voters. But maybe we will start seeing those dynamics shift. And look, the other alternative is that the Republicans lose the midterms, the Democrats take at least one chamber — take the House, if not the Senate — and then that will absolutely shift the dynamic.
Stromberg: We are already seeing some forms of, if ineffective, opposition in Congress, even among some Republicans, on the tariffs issue.
You have resolutions passing in the House; for example. Some of the lawmakers who voted for some of these resolutions on tariffs are going to be hearing the president very soon on Tuesday, at his State of the Union address. Plenty of Republicans, and a majority of Americans, were hoping that the court’s ruling might mean the end of the president’s tariffs. That doesn’t appear to be the case.
What do you expect from the president in the State of the Union this Tuesday night? Binya, you’ve already previewed a little bit of some of the arguments he might make about the power and benefits of tariffs to revive the domestic economy. What do you think?
Appelbaum: I think it is sort of a fascinating test of his, you know, ability to do whatever he wants versus what his advisers clearly want him to do. He has been resisting talking about the big issue — in all of the polls, the big issue is affordability, the cost of life. Democrats have seized on it, they’re making hay from it, and a lot of Republicans really want the president to focus on how he is going to address that issue.
And Trump has strongly resisted doing so. He insisted it’s not a real issue. He’s already dealt with it, it’s fixed. And the tariff thing really brings that to a head. My expectation is that he is going to make a full-throated case for the importance of tariffs, and double down on it and brag about it, because that is everything consistent with his character. That is the way that he deals with setbacks, at least in the first instance.
The more interesting question, as a policy matter, is whether he actually sticks with tariffs. Because the other thing that sometimes happens is — after insisting that he’s going to keep on doing whatever he has been told he can’t do anymore — he sometimes then backs off. But the adjustment comes later.
But the real question, to me, is whether his own instincts, which frankly have served him well, you know, prevail on Tuesday night. And what we hear is a doubling down on the things he considers important. Or whether his aides and his supporters in the party have any luck in convincing him that his party’s fate in the midterms rests on a change in tone and a change in message, and some form of reassurance to the American people that he’s actually taking the cost of living seriously.
Bazelon: I agree that that is like the main drama of the State of the Union. In terms of the theater of the event, there’s also a side question: Are the Supreme Court justices going to show up? Usually, most of them do. They sit really close to where the president is standing. They’re there in their robes representing their branch.
Presumably they are going to show up, because they still think that’s part of their role. And I think it’s going to be really hard for President Trump to resist the temptation to go after them. And maybe that will just be like a moment of spicy performance and it won’t matter a whole lot.
But it also could put even more of a point on this real difference in how the justices see their jobs versus the president. I mean, the president went after the conservatives, who were in the majority on the tariffs case, for being a disgrace to their families and disloyal to the Constitution.
He really might as well have just said disloyal to him because that’s what’s really troubling him here. And if he goes down that road in this public way, on video — which will be streamed over and over again — at the State of the Union, that’s just going to up the ante. And maybe there’s something usefully clarifying about that for the American people, to see that the president expects the court to do his bidding even though it is a separate and coequal branch.
Appelbaum: I think presidents have often been in the position of disagreeing with, resenting, feeling unfairly constrained by Supreme Court decisions. To me the difference isn’t whether the opposition is principled, but whether what the president says is basically, I disagree with you, or I think you’re bad people who shouldn’t have this power, or really even, disagreeing with me is illegitimate. Which is really what Trump is saying, is that the power belongs to him. One trend in his second term is that he really seems to be building up towards saying, in increasingly clear ways, that he is the state and that what he says is the law, and that those who disagree with him are delegitimizing themselves by disagreeing with him.
And that is what is so remarkable about this confrontation between the court and the president: not that they disagree about policy, which is really their job, but that he is questioning the legitimacy of the court, disagreeing with him about policy.
Bazelon: Yeah, totally. If you go back to that phrase that he said — that they were disloyal to the Constitution — well, that only makes sense if you think the Constitution establishes the president and his judgment as, basically, the only power, right? This unitary executive theory that some conservatives have really pushed to the limits during the Trump administration.
Stromberg: So, how should Democrats respond to all of this? There’s an argument out there that with the midterms coming up, all they have to do is put up some candidates with a pulse and let Trump beat himself. Is that the strategy? What do they say? What do they do? Binya, what do you think?
Appelbaum: To bring this back to tariffs, one of the really interesting dynamics here is that the Democrats haven’t been totally sure that Trump is wrong about tariffs. The Biden administration maintained much of the tariff infrastructure that Trump had built.
There are a lot of Democrats in Congress who have long been skeptical about the benefits on balance of trade for the United States, who are extremely open to the argument that we ought to be rebuilding manufacturing, in part, by protecting ourselves against foreign competition.
And so, it’s been a very difficult place for Democrats to find traction or figure out what exactly they want to say that would create a meaningful distinction for voters between their position on this issue and the president’s position on this issue. And I, frankly, don’t think that’s gotten any easier for the party.
Where they are making hay is on affordability. The idea that the cost of living in the United States is going up.The important things keep getting more expensive. Housing, education, health care — to the point where a lot of ordinary Americans can’t afford those things, and the government isn’t just failing to help, but, under Trump, is actively making things worse. That has become a very potent message for the party.
Where Democrats continue to struggle is in explaining what they would do differently. This is a party that continues to lack a coherent economic vision. I don’t think it’s just a civil war problem. There are different wings of the party, ideologically, and they have some definable differences over what economic policy might look like. But I’m not even sure that any of those wings have defined a completely coherent plan for moving forward.
It is really a party in search of answers. They know what the questions are, and they’re putting them forward increasingly forcefully and successfully. And that may be enough to prevail in the midterms, to be clear — but going forward, they need to start articulating answers to those questions. That, to me, is the singular challenge confronting the Democratic Party right now.
Bazelon: I mean, Binya, is this a useful way to think about this? And I’m really just thinking out loud here, but one way to think about Trump’s tariff policy is that it’s a bad answer to a real insight, which is that globalization — and the kind of free trade of the Clinton era all the way to the Obama era — left out lots of Americans, right? Especially in the parts of the country that previously had a lot of factory industrial jobs, the kind of jobs that pay well, even though you haven’t graduated from college. There is a kind of backbone there that got really hollowed out by trade agreements and all those kinds of jobs moving offshore.
The Democrats, as well as Republicans, have really struggled to deal with the flaws and weaknesses of that kind of globalization, and nobody still really knows what to do about it. And now we have, potentially, this huge A.I. disruption to the white-collar economy coming down the pike when we haven’t even solved the blue-collar problem yet.
Does that resonate with you?
Appelbaum: It absolutely does, and I think it raises a really important point, which is that for all of the focus on trade, there have been some political efforts to address the impact of trade. Biden tried, and why he failed is, perhaps, a rich subject for a whole different show. But he tried. Trump is trying. They’re not even the first.
What we have very rarely seen any political effort to address is what is, actually, a bigger part of the story, which is automation. If you look at what actually reduced employment in the manufacturing sector, trade is the smaller part of that story. Over time, what really did it was automation.
And as you point out we are about to enter a whole new chapter in that story, where a much wider swath of jobs are potentially at risk of being automated by artificial intelligence. And we still don’t have any coherent policy conversation about how we, as a society, as a polity, as a government ought to be helping workers, who are facing that disruption, and helping an economy that is facing those transitions.
So, that is really the looming question to me. Yes, we have failed to have a successful political conversation around trade, but that’s never even been the biggest thing we need to address. The biggest thing we need to address is this automation conversation, which is really, for the most part, still not a part of the mainstream political conversation.
Stromberg: And one of the reasons why there hasn’t been a boom in manufacturing employment in the United States, even in the wake of these tariffs, is — to the extent that there’s reshoring of manufacturing back here in the country — that a lot of it is coming in the form of highly automated manufacturing that doesn’t require a lot of unskilled labor. Am I right about that? Binya?
Appelbaum: That’s 100 percent correct. And visiting a modern factory floor is an experience that I think is really valuable. And that people should seize if they have the opportunity, because what a modern factory floor looks like is a very clean space with very few people in it, and whirring machines, quietly producing the things that we need. And the idea that that manufacturing is, ever again, going to be a major employment center is just very hard to take seriously.
Stromberg: Now, one of the interesting things about A.I. is that you can make its potential so vast, or, some might say, so overblown. You can make almost any kind of prediction about it. But is the next sort of hollowed-out industrial community going to be a walkable urban neighborhood with third-wave coffee shops, with unemployed white-collar former coders no longer making the big bucks in tech firms?
Appelbaum: I hesitate to join the ranks of people making predictions about where all this A.I. stuff is going. But I do think that we, as society, need to be grappling with those risks, figuring out frameworks for how we think about A.I. displacing jobs, like the government. One way of thinking about the role of government, economically, is that it gets to regulate the pace of change.
And thinking of pace as a lever here is really important. It really matters how quickly people lose their jobs, how quickly we transition to new technologies, which things we as regulators decide to preserve and demand that humans continue to do. Something we’ve been very comfortable doing — in the context of medicine, for example — is insisting that there are some things that a doctor needs to do, not necessarily because the technological frontier is determining those things, but because we as a society have decided we want a person to be doing it. Those are the types of questions we’re increasingly going to need to engage, and that we should start talking about before these decisions actually need to be made.
And also questions around how important work is to us. We may reach, as a society, a point where the cheapest way to do something may not be the best way to do it for society, right? You may want to pay people to work or accept a cost to society in having people continue to do jobs that could be done by technology.
So there’s a bunch of levers that are potentially available to policymakers, to mitigate the pace of change associated with A.I. And I certainly wish we were hearing more conversation about them from those policymakers.
Stromberg: Emily, any final thoughts?
Bazelon: Projecting ahead a year, we will be staring down the next State of the Union. I just wonder if this whole conversation is going to have become so much more prominent than it is now. It just feels to me like this huge gathering storm that we haven’t really seriously started to grapple with.
And I think a lot of it goes back to what you were saying, Binya, about change — that the rate of change is itself so unpredictable, right? Some A.I. creators are talking about incredibly rapid change, practically immediate or almost immediate. And others think it’s much more long term.
And because that, in itself, is so uncertain, I think the political conversation is having a hard time catching up.
Appelbaum: I always discount the hype machine in Silicon Valley, right? Like, they make money by hyping everything. Every new technology is going to transform the world yesterday. But you know, I also think there’s very little harm in having policymakers get down to these conversations as soon as possible.
Stromberg: Emily, Binya — thank you so much for your time.
Bazelon: Thanks for having us.
Thoughts? Email us at [email protected].
This episode of “The Opinions” was produced by Jillian Weinberger. It was edited by Kaari Pitkin. Mixing by Pat McCusker. Original music by Carole Sabouraud, Pat McCusker and Aman Sahota. Fact-checking by Kate Sinclair and Mary Marge Locker. Audience strategy by Shannon Busta and Kristina Samulewski. The deputy director of Opinion Shows is Alison Bruzek. The director of Opinion Shows is Annie-Rose Strasser.
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