Trump is right. Ending tariffs would be an economic disaster, at least for him. Any damage to America would be his own fault.
It would not, as Trump claims, turn America into a third world country. That is a typical Trumpian hyperbole.
But the sudden and dramatic end of tariffs would definitely damage Trump’s vision of the future American economy. And that in turn will hurt Trump politically. Whether it would also be bad for the rest of the world… well, we’ll have to wait and see.
The prospect of the sudden end of tariffs was raised by the decision of the Appellate Court last Friday to support a lower court’s judgement that the tariffs were unconstitutional.
The Appellate Court, however, has given Trump a possible out—The Supreme Court. The Administration has until October 18 to appeal to the ultimate judicial authority and, of course, the court is packed with conservatives,
But that may not be enough. Trump imposed the tariffs under the 1977 International Emergency Economic Powers Act (IEEPA). The IEEPA gives the president sweeping powers to declare an emergency and to use economic actions to deal with it.
These include such measures as sanctions and freezing assets. However, nowhere in the Act does – ruled the Appellate Court by 7 to 4—is the president given the power to impose tariffs. That is “a core Congressional power.” This means, according to two levels of the judiciary, that the tariffs are unconstitutional and should be reversed.
So far Trump’s tariffs have raised more than $210 billion dollars. By time the Supreme Court rules on their legality the figure will be around $300 billion.
If the tariffs are illegal than those who paid them can sue the government—plus interest and possible damage to business—for the money that they lost.
But that is not all. Tariffs are at the heart of Trump’s long-term economic policy and linked to his Big Beautiful Bill (BBB). According to some estimates, the sweeping tax cuts in the BBB could increase the federal deficit by $5.2 trillion over the next ten years. Tariff revenues are meant to more than offset those losses.