The SCOTUS Tariff Decision that Didn’t Bark in the Night

Media expectations that the Supreme Court would announce a tariff decision – first, last Friday and then again today – were spurious to begin with. As of this writing there is no announcement from the Court as to their next decision day, and even when there is, they do not announce which cases will be decided. We think a delay likely points to a split decision, but one with more unanimity than a hastily made one. We still expect a six-to-three decision against the tariffs. There is little evidence the tariffs have been inflationary. The US trade deficit in goods is the smallest since 2016, but that follows a record surge in imports earlier this year – on a cumulative basis, the deficit under Trump is larger than it was under Biden. China's imports to the world are at an all-time high.IEEPA tariffs have reduced the federal deficit by only 13%. Refunds, and inability to collect them going forward, is not a big risk for the debt and deficits – indeed, freedom from tariffs will spur growth that will help the Treasury get out of debt and deficits. After repeal, in today’s “affordability crisis,” Trump will not replace the IEEPA tariffs with others.