As is often noted in these pieces, business of any kind craves stability. One need not go to business school to know that success in running any type of service-for-profit endeavor – as opposed to education, government, law enforcement, etc. – necessarily requires one to live a bit in the future, always either growing or strategically pulling back, depending on where one’s interests might head. It is hard enough in the best of times. Now throw in volatility due to actions that seemed other-worldly only two to three years ago and there’s a problem. The Wall Street Journal, the parish bulletin of America’s Big Business Interests TM, just voiced its strong repudiation of the sudden implementation of tariffs on North American and Chinese trade (Some of the proposed tariffs have been delayed for a month’s time). In so doing, the Journal notes that President Donald Trump is acting a bit too much like President Biden in grabbing executive power and that the Trump administration should face the same block that Biden faced – lawsuits holding up executive expansion.
There is some question as to whether the president has the unilateral authority with which to implement such aggressive action over and above whether it is a good idea. As noted by the WSJ:
President Trump delayed his Mexico-Canada tariffs again on Thursday—this time for another month. He’s treating the North American economy as a personal plaything, as markets gyrate with each presidential whim. It’s doubtful Mr. Trump even has the power to impose these tariffs, and we hope his afflatus gets a legal challenge.
If you are like me and need “afflatus” defined, I already looked it up and can help – it’s needed to really appreciate the editors’ oomph on this: “A divine creative impulse or inspiration.” It is the “divine” element that makes it art. They are not impressed. Moving on:
The Constitution gives power over trade to Congress, which for most of U.S. history wrote tariff law. That changed after the catastrophe of the 1930 Smoot-Hawley tariff, as Congress said stop us before we kill the economy again and ceded authority to the President to negotiate bilateral trade deals. It ceded more power after World War II.
It is fair to ask: “So, which is it? Does Congress still have the exclusive power? Or did they cede it?” It may be safe to assume that the editors simply don’t care, they just want someone to stop him (This time) before he kills the economy, be it on first impression or “again.” Interesting, though – the paper is a business, another Murdoch thing. They sell their stuff to Canada. Why don’t they lead the charge? Perhaps because they prefer to safely blast their message from a conference room. The point below isn’t bad, however:
Mr. Trump’s tariffs recall Mr. Biden’s use of emergency power for his Covid vaccine mandate, eviction moratorium and student loan forgiveness. The Court blocked all three under its major questions doctrine.
Three strikes and you’re out, even in Idaho. It appears as though the SCOTUS has painted itself into a bit of a corner and may have to follow its own rationale or really get creative in it’s “Major Republican Question Doctrine.” But there is a chance that this won’t get to the SCOTUS. Unlike evictions, vaccines, or student loans, the issue regarding tariffs impacts Chase-Visa, General Motors, and Exxon – those are some really heavy hitters, much tougher to strike out the side. No one knows better than the Journal that some major questions don’t even need to go to the courts. Some hitters prefer to tee it up and the decision comes straight from the judges in lower Manhattan.
This won’t come as a surprise to the Trump administration which is in a really complex game of give and take. As much as these businesses may hate the tariffs they have to weigh their complaints against a tax cut that they may love enough to trade. It looks like they can’t have it all no matter how much they assume that they absolutely can – always have before. We will see.
Hoping that someone else will take care of this feels more like a hot potato than anything. “No, you take it!… No, you… Well someone has to!!” Meanwhile, Wall Street and its Journal will be looking for some sort of predictability. There is a problem in that they’re all too willing to create their own if needed. There’s no law that requires them to invest in this country…
God Bless: I can be reached at [email protected] and on twitter-X at @JasonMiciak, and follow now on Bluesky.Â
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you can’t spell tariffs without FFS!
And it may all be primarily market manipulation.