It's Shitty Anniversary time

A year ago, Donald Trump stood in the Rose Garden, surrounded by charts nobody understood, and declared war on mathematics. One year later, not even the Rose Garden remains.

It's being called "The Greatest Economic Own Goal in Living Memory" -- and that was before the same goal-scorer launched a war without a strategy that's locked up twenty percent of the world's traded oil behind the mullahs' missiles. 

This, above, was one year ago today when Donald Trump stood in the White House's Rose Garden to shoot himself and world trade in the foot. 

Today, we 'celebrate' the anniversary of  one man's gut feelings over economic reality...

One Year On: The Greatest Economic Own Goal in Living Memory
by Gandalv 

One year ago, Donald Trump stood in the Rose Garden, surrounded by charts nobody understood, and declared war on mathematics. He called it Liberation Day. 

The Financial Times, along with every economist who has read more than a bus ticket, is marking the anniversary with a verdict that should be carved into marble: it failed. On every single front. Spectacularly. Completely. Embarrassingly. 

Let us be precise about this. 

Measured against Trump’s own three stated goals, making foreigners pay for doing business with America, narrowing the trade deficit, and punishing China, the tariffs have clearly failed. Not partially failed. Not failed with asterisks. Failed the way a man fails when he drives a Reliant Robin the wrong way onto a motorway and acts surprised when it rolls. 

And everyone said so. Economists said so. Trading partners said so. His own party said so. The entire field of international trade theory, developed over roughly two centuries by people who actually read things, screamed it from the rooftops. [Even this humble blog said so.] But Donald Trump, a man whose relationship with economics appears to consist entirely of gut feeling, cable television and 6 casino bankruptcies knew better. 

The average American household paid an extra $1,700 due to tariffs. Over 65 percent of Americans reported that everyday goods became significantly less affordable. This is what happens when you run the world’s largest economy on instinct and vibes. 

One year after the Rose Garden ceremony, factory jobs are down and inflation is up. The precise opposite of what was promised. And promised with extraordinary (and wholly unjustified) confidence. 

Then the lawyers arrived. 

The Supreme Court found that Trump had exceeded his authority, ruling that the declared emergency bore no rational connection to the trade measures imposed. In other words, the legal foundation was nonsense. The government had collected $166 billion in tariffs from over 330,000 businesses on grounds the Supreme Court found unconstitutional. The refund process is now underway.  One hundred and sixty-six billion dollars. Collected illegally. From American businesses. 

The financial markets, bless them, responded with the only appropriate tool available: mockery. The meme “Trump Always Chickens Out” refuses to go away, and the TACO index is now actively used by analysts to price in the president’s chronic habit of retreating. 

Every serious voice warned this disaster would happen. Trade economists. Former Treasury secretaries. The IMF. The WTO. The EU. Canada. Japan. Basically anyone who had spent more than forty minutes studying how global trade actually works. The man who ignored all of them had previously run a casino into bankruptcy and considered that a learning experience. He was not, it turns out, a fast learner. 

One year. 

Zero of three goals achieved. 

One Supreme Court ruling. 

One $170 billion refund. 

A world economy paying more for everything and making less of it. 

Liberation Day. What a name for it.

The *New* Trump Tariffs Are Also Unlawful

The CATO Institute's Ilya Somin had the idea that a lawsuit against most of the Tariffs in the second Trump administration could be successful, and got it off the ground -- sowing the seeds for one of the most significant rulings by the US Supreme Court in decades by declaring a president's central initiative to be unlawful.

But this US president doesn't care about your stupid laws, as CATO's Clark Packard & Alfredo Carrillo Obregon explain in this guest post...

The New Trump Tariffs Are Also Unlawful
By Clark Packard and Alfredo Carrillo Obregon

On February 20, the Supreme Court correctly struck down President Trump’s tariffs invoked pursuant to the International Emergency Economic Powers Act (IEEPA). The administration’s response was swift and naturally chaotic: it replaced the IEEPA tariffs with 10 percent duties imposed under Section 122 of the Trade Act of 1974, citing large trade deficits as justification. Like their predecessors, these new tariffs almost certainly violate the law.

What Section 122 Actually Says

Section 122 was enacted in the early 1970s, around the time the United States was transitioning away from the Bretton Woods system of fixed exchange rates. The statute authorises the president to impose temporary import tariffs of up to 15 percent—or other trade restrictions such as quotas—for up to 150 days (absent an affirmative congressional vote to extend them) in response to “situations of fundamental international payments problems.” The statute defines such circumstances as “large and serious United States balance-of-payments deficits and/​or circumstances” in which the dollar faces “imminent and significant depreciation.”

The administration now claims that invoking Section 122 is necessary to address the United States’ large trade deficit. But the trade deficit is not the balance of payments -- balance of trade is not balance of payments -- they are two distinctly different things -- and conflating the two represents a serious distortion of the statute’s plain terms. 

In fact, another provision in Section 122 authorises the president to enact temporary trade-liberalising measures to address “fundamental international payments” problems by dealing with “large and persistent United States balance-of-trade surpluses.” (Emphasis added.) It is therefore hard to imagine that Congress intended for the distinct concepts of the balance of payments, on one hand, and the balance of trade, on the other, to be used interchangeably. 

A Senate Finance Committee report on the Trade Act of 1974 provides further evidence that Congress understood the balance of payments to be distinct from the balance of trade.

The Economics Are Clear


The balance of payments summarises all the economic transactions between a country and the rest of the world. It has three components: the current account, the financial account (including reserve assets), and the capital account. 

The balance of trade is one component of the current account, which encompasses trade in goods and services, as well as investment income flows. When the US runs a current account deficit (as it does today), then capital inflows (i.e., the capital and financial accounts) will essentially offset it dollar-for-dollar. The opposite is also true, as the balance of payments will, in a floating-exchange system, equal zero (i.e., a current account surplus must be offset by capital outflows).

Under the earlier Bretton Woods fixed-exchange system by contrast, countries agreed to fix their currency values at a specific exchange rate relative to the US dollar, which was convertible to gold at a fixed rate of $35 an ounce. As foreigners holding inflating US dollars sought to convert them to gold however, the US used its official gold reserves to finance this imbalance and maintain the value of the dollar. Economist Phil Magness thus notes that a balance of payments “deficit” referred to a negative transaction balance in official reserves. Ultimately, the US “printed” too many dollars for other countries to remain confident in the system, and it broke down, giving way the floating exchange rate system that still exists today.

Milton Friedman actually proposed 'the float' as a solution to balance-of-payments problems in the 1960s: “a system of floating exchange rates eliminates the balance-of-payments problem […] the [currency] price may fluctuate, but there cannot be a deficit or a surplus threatening an exchange crisis.”

Fast forward to today, and as the Peterson Institute’s Kimberly Clausing and Maurice Obstfeld note, the United States’ floating exchange rate and large supply of attractive financial assets mean it can finance its large current account deficits. Gita Gopinath, a former senior official at the International Monetary Fund and current Harvard economics professor, concluded similarly on social media: “As long as there is plenty of demand for US debt and equities, which is the case, the US does not have a ‘payments’ problem. It can finance its trade deficits easily.” Indeed, though the US has the largest trade deficit in the world, it also enjoys the largest financial account surplus. 

Virtually no serious economist, therefore, believes the United States has a “large and serious balance-of-payments deficit.” Or an at all.

The Administration’s Own Lawyers Admitted It

Perhaps more damaging, the Trump administration’s own Department of Justice (DOJ) acknowledged that Section 122 does not apply to the current situation. During the IEEPA litigation at the Court of Appeals for the Federal Circuit, the DOJ’s reply brief noted that Section 122 has “no application [to the current situation], where the concerns the President identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.” Though the DOJ dropped this line of argument at the Supreme Court, the administration cannot credibly argue otherwise now. 

And for the reasons outlined above, it would prove difficult to demonstrate that Section 122 authorises tariffs to deal with trade deficits.

Courts Should Grant Injunctive Relief

The Trump administration likely invoked Section 122 precisely because it understands that a legal challenge is unlikely to be fully litigated in the 150 days permitted by the statute. Indeed, the administration has made clear that Section 122 will serve as a bridge authority as it readies Sections 301 and 232 tariffs to roughly recreate the tariff architecture it illegally established under IEEPA.

That said, the scope of such an injunction might be limited in light of the Supreme Court’s decision in Trump v. CASA, Inc. (2025), which led the Court of Appeals for the Federal Circuit to vacate and remand the universal injunction that the Court of International Trade granted in its initial decision on the IEEPA tariffs case. Overshadowing the prospect for injunctive relief, moreover, is the fact that protracted litigation is unlikely to be resolved before the 150-day mark when the Section 122 tariffs expire (assuming Congress does not vote to extend them).

The Bottom Line

Once again, the Trump administration has demonstrated no fidelity to the rule of law in pursuit of economically destructive protectionism. 

If the president wants the authority to impose these sweeping tariffs, the proper course is to go to Congress and ask for it. Given that 2026 is an election year and how deeply unpopular the tariffs have become, that seems unlikely. 

Instead, the administration will likely continue its pattern of legal improvisation—hoping to keep the Section 122 tariffs in place long enough to run out the 150-day clock while it works to roughly reconstruct the IEEPA tariff regime through Sections 301 and 232.

* * * * * 

Clark Packard is a research fellow in the Herbert A. Stiefel Center for Trade Policy Studies.
    Prior to joining the Cato Institute, Packard was a resident fellow at the R Street Institute, focusing on international trade policy. He previously worked at the National Taxpayers Union doing the same. Prior to those roles, he served as an attorney and policy adviser to two South Carolina governors. Earlier in his career, he spent three years in private legal practice.
    Packard is a contributor to Foreign Policy and has written for National Review, Lawfare, The Bulwark, Business Insider, The National Interest and other publications. He has appeared on a number of television and radio programs to discuss international trade policy.
    He is a graduate of the University of South Carolina School of Law.

Alfredo Carrillo Obregon is a Research Associate for trade policy at the Cato Institute. His work covers issues related to U.S. tariff policy and international trade relations, including U.S.-Mexico relations. Originally from Monterrey, Mexico, Carrillo Obregon earned his B.S. from Georgetown University.

    Their post originally appeared at the Cato Insitute blog. It has been edited for brevity.

    See also their related posts:

• The Supreme Court Got It Right on IEEPA—But Don’t Pop the Champagne Yet
• Trump’s Trade Policy Is Teaching Partners Washington Can’t Be Trusted
• Tariffs by Unpublished Memo: Lawsuit Exposes How Opaque Enforcement Compounds the US Tariff Complexity Problem
• Whom Should Farmers Believe: The President or Their Lying Eyes?

"It is the opening that matters most."

 

"These reforms dismantled the import quotas and regulatory walls that had kept Australian manufacturers comfortable and unchallenged for the better part of a century. Industry had to compete with the world. Not because a regulator told firms to behave, but because Japanese cars and European appliances were suddenly on showroom floors, at prices local manufacturers could not match.

"Yes, competition law played a part. But the real transformation came from opening the economy.

"Take household appliances. During the reform period, the number of local manufacturers shrank and the industry became more concentrated. By the logic of competition law, this should have been a disaster. Fewer producers means less competition. Consumers should have suffered.

"They did not. Prices fell and choice exploded. Tariffs on refrigerators dropped from 47.5 per cent to 5 per cent. In 1999, the Productivity Commission studied what had happened. It attributed the gains to trade reforms that reduced “barriers to market entry,” not to competition law. Anyone in the world could now sell a fridge in Sydney.

"The economist Israel Kirzner, now 96 and long overdue for a Nobel Prize, spent his career at New York University making exactly this point. His work shaped my own doctoral research in the law and economics of competition.

"Kirzner’s central argument is that competition is not a snapshot of how many firms happen to sit in a market at any given moment. It is a process, driven by entrepreneurs spotting opportunities and entering markets to challenge incumbents. A market with two players can be fiercely competitive if both know a third could arrive tomorrow. A market with twenty can be sleepy if regulation keeps the twenty-first from showing up.

"Hawke and Keating grasped this, perhaps instinctively. The way to make an economy competitive is to open it up, let foreign goods in, let new businesses form and remove the barriers that protect incumbents from challenge. Competition law can help keep the game honest once the field is open.

"But it is the opening that matters most."

~ Oliver Hartwich from his post 'Dismantling the competition myth'

"The president is not a king, and is not entitled to practically unlimited power to impose tariffs. The Supreme Court was right to deny it to him."

"The ruling against Trump’s tariffs is a major victory for the constitutional separation of powers, rule of law, and millions of American consumers and businesses.

"In a 6–3 decision yesterday, the Supreme Court rightly ruled that, under the International Emergency Economic Powers Act of 1977, the president does not have the power to 'impose tariffs on imports from any country, of any product, at any rate, for any amount of time.' The ruling is a major victory for the constitutional separation of powers, rule of law, and millions of American consumers and businesses harmed by these tariffs.

"This decision spared America from a dangerous, unconstitutional path. Under President Trump’s interpretation of the law, the president would have had nearly unlimited tariff authority, similar to that of an absolute monarch. That undermines basic constitutional principles. The Framers of the Constitution had sought to ensure that the president would not be able to repeat the abuses of English kings, who imposed taxes without legislative authorisation. ...

"In addition to upholding the separation of powers, the decision is a victory for the rule of law, which requires that major legal rules be clearly established by legislation, not subject to the whims of one person. Since first imposing the Liberation Day tariffs, Trump has repeatedly suspended and reimposed various elements of them. He has also imposed or threatened to impose IEEPA tariffs for a variety of other purposes, such as countering the supposed threat of foreign-made movies, punishing Brazil for prosecuting its former president for attempting to launch a coup to stay in power after losing an election, and most recently castigating eight European nations opposed to his plan to seize Greenland. Such gyrations undermine the stable legal environment essential for businesses, consumers, and investors, and create endless opportunities to reward cronies and punish political adversaries ...

"The administration may try to reimpose many of the tariffs using other statutes, such as Section 232 and Section 301. But those laws have various constraintsthat would make it hard for the president to simply impose unlimited tariffs, as he could have done under his interpretation of IEEPA. As Chief Justice Roberts noted in his opinion yesterday, “When Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits,” and these others statutes all have limitations on the amount and duration of the tariffs they authorize, plus “demanding procedural prerequisites.” If Trump or a future president does claim that those other statutes give him unlimited power, tariffs imposed based on any such theory would themselves be subject to legal challenges. Yesterday’s decision signals that a majority of the Court is seriously skeptical of claims of sweeping executive tariff authority.

"Following the release of the Court’s decision, Trump announced his intention to use Section 122 of the Trade Act of 1974 to impose 10 percent global tariffs. But Section 122 authorizes tariffs only in response to 'fundamental international payments problems” that cause 'large and serious United States balance-of-payments deficits' (which are not the same as trade deficits used to justify the IEEPA Liberation Day tariffs), or “an imminent or significant depreciation of the dollar,' or if they are needed to cooperate with other countries in addressing an 'international balance-of-payments disequilibrium.' And Section 122 tariffs can remain in force for only up to 150 days, unless extended by Congress.

"The president is not a king, and is not entitled to practically unlimited power to impose tariffs. The Supreme Court was right to deny it to him."

~ co-litigant Ilya Somin on 'How the Supreme Court Spared America'

REUTERS: ''Embarrassment to their families': Trump denounces Supreme Court justices after tariffs ruling'
WASHINGTON, Feb 20 (Reuters) - President Donald Trump lashed out on Friday at the U.S. Supreme Court and the six justices who struck down his signature global tariffs - including two he appointed - in remarkably personal terms while hailing the three justices who backed him.
"Although previous presidents have sharply criticised Supreme Court rulings against them, Trump's lengthy tirade to reporters at the White House stood out for its contemptuous tone, as well as the personal nature of his scorn and praise...."

 

"Today’s ruling reinforces a basic constitutional principle: emergency powers are not a blank check for economic policymaking. The Court correctly recognized that tariffs function as taxes on Americans, and that authority belongs to Congress, not the executive acting alone under a perpetual state of emergency. Despite dire warnings, there was never going to be a financial crisis if these tariffs were struck down.
    "Ending the IEEPA tariffs restores predictability and reduces the uncertainty that has weighed on investment and supply chains. Businesses and consumers now get a reprieve from a costly policy mistake. Far from leaving the United States defenceless, the decision strengthens the institutional credibility that matters most when real emergencies arise."

~ Kyle Handley, Cato Adjunct Trade Scholar

"I rise today to address [Supreme Court Justice] Neil Gorsuch's concurrence.
    "The dude stuck a big red hot poker into the nether regions of no fewer than SIX of his colleagues.
    "For Kagan, Sotomayor, and Jackson (I’m paraphrasing, and tendentiously so, but it’s more fun): “You folks supported every cockamamie ‘emergency’ theory the Dems could come up. You gave the Biden administration clearly unconstitutional and unjustified powers during COVID, and you accepted a definition of ‘emergency’ so encompassing that the US has apparently been in an ‘emergency’ since before the Declaration of Independence. Now that a Republican is office, you have belatedly discovered that an declaration of an emergency is more plausible if there is actually some emergency. You people are clowns, and you should be embarrassed.” (Remember, these three are Justices that Gorsuch is JOINING, in his opinion; they are on his side!)
    "For Alito, Kavanaugh, and Thomas (again, I’m not quoting, not even close): “You folks opposed very action the Biden administration tried to take. Sure, the Bidenites claimed excessive powers. But COVID was at least plausibly an emergency, with both an urgent timeline and potentially dangerous outcomes. Yet you still had this very restrictive doctrine you kept parroting, about how the President can’t do things. That meant that you were basically playing “Calvinball,” with made up rules for why Democrats can’t do things. And now you say none of those rules (some of which were admittedly dumb) don’t apply when a Republicanis in office? And when there is no conceivable justification for invoking an emergency? You people are clowns, and you should be embarrassed.” (In fairness to Gorsuch, Kavanaugh in particular wrote an opinion so bizarrely self-contradictory that anyone would have had this reaction privately. But to put it in your concurrence? Damn!)
    "UPDATE: An afterthought: IEEPA was passed with a 'legislative veto.' Whatever else is true, the implied delegation was much less than Kavanaugh is claiming in his nonsensical screed."

~ Michael Munger from his post 'Gorsuch! A concurrence for the ages'

"Today the Supreme Court did something simple and radical at the same time: it read and applied the Constitution. In Learning Resources, Inc. v. Trump, the Court held that the International Emergency Economic Powers Act (IEEPA) does not authorise a President to impose tariffs. Article I vests the taxing power—explicitly including duties and tariffs—in Congress alone. The Executive has no inherent peacetime authority to reach into “the pockets of the people.” If Congress wishes to delegate tariff authority, it must do so clearly and within limits, because that is the structure of our constitutional republic.
    "This ruling is not about whether tariffs are good policy. It is about who has the lawful authority to impose them. The Court reaffirmed a basic principle: the power to tax belongs to the legislature, and it cannot be assumed, implied, or creatively inferred by the Executive. If we are to remain a government of laws rather than men, structural limits must bind even when they are inconvenient. Today, thankfully, the Court enforced that boundary." 

~ Nicholas Provenzo

"The court’s decision is welcome news for American importers, the United States economy, and the rule of law, but there’s much more work to be done. Most immediately, the federal government must refund the tens of billions of dollars in customs duties that it illegally collected from American companies pursuant to an “IEEPA tariff authority” it never actually had. That refund process could be easy, but it appears more likely that more litigation and paperwork will be required – a particularly unfair burden for smaller importers that lack the resources to litigate tariff refund claims, yet never did anything wrong.
    "Even without IEEPA, moreover, other U.S. laws and the Trump administration’s repeated promises all but ensure that much higher tariffs will remain the norm, damaging the economy and foreign relations in the process. Implementing new tariff protection will take a little longer than it did in 2025 and, perhaps, will be a little more predictable. Overall, however, the tariff beatings will continue until Congress reclaims some of its constitutional authority over U.S. trade policy and checks the administration’s worst tariff impulses." 

~ Scott Lincicome, Cato Vice President of General Economics and Cato’s Herbert A. Stiefel Center for Trade Policy Studies

"This expansive use of presidential 'emergency' powers to

impose taxes without representation would have made King

George III blush -- and offend the very sensibilities of

liberty that once sent tea into Boston Harbor." 

~ Supreme Court Justice Neil Gorsuch in his concurring decision

.....aaaaand,

"Totalitarian and authoritarian leaders seem to always presume that they should have and try to assert unlimited power, to do what they want, when they want, as they want, even when guided by any emotional whim that crosses their mind. And lash out at anything and anyone who presumes to say otherwise."

"Trump asserted that he could impose tariffs when he wanted, on any country he wanted, and to any extent he wanted. And could do so guided by any changing whim when some foreign leader did or said anything he did not like and was 'offended' by. And when the Supreme Court said 'No!' And took his power to do so away, he lashed out at them in rude and crude ways in response. And said he would try to keep doing it in different ways." 

~ Richard Ebeling

... aaaaaaaand, "it took less than 24 hours and Mad King Donald directly defied the Supreme Court."

"[Fri]day's ruling held that IEEPA does not authorise ANY tariff power. It was explicit in doing so and rebuked Trump's previous exercises.
"Late last night, Trump issued a new executive order reinstating the suspension of the de minimis tariff exemption on mail order packages. The new order reimposes these tariffs by using IEEPA in the face of the explicit direction of the Supreme Court.
"This is grounds for impeachment." 

~ Phil Magness

CATO: 'The Supreme Court Got It Right on IEEPA—But Don’t Pop the Champagne Yet'

"But the end of the IEEPA tariffs does not mean an end to unilateral trade policy. The administration has already been eyeing other, largely overlooked statutes that could produce a similar result.

Section 122

Faced with a possible Supreme Court defeat over IEEPA, administration officials have been readying alternative authorities under which to impose tariffs. One such statute is Section 122 of the Trade Act of 1974. The provision empowers the president to address “large and serious” balance-of-payments deficits through import surcharges of up to 15 percent, import quotas, or some combination of the two. That surely holds considerable appeal for a president who has consistently (and mistakenly) railed against the alleged dangers of US trade deficits.

As Stan Veuger of the American Enterprise Institute and I explained in December in Foreign Policy, the administration could replicate most of the IEEPA tariff structure through Section 122 in short order. Countries currently facing rates above 15 percent would see some reduction, but for every other country, the hit would be nearly identical. And crucially, Section 122 doesn’t require the lengthy investigations that other trade statutes demand. The president could act fast.

But there’s a catch: Section 122 tariffs expire after 150 days unless Congress votes to extend them. How much of a constraint this is, however, remains to be seen. If Congress declines to act, the administration could, at least in theory, allow the tariffs to lapse, declare a new balance-of-payments emergency, and restart the clock. The maneuver would raise serious separation-of-powers concerns, but nothing in the statute clearly forbids it.

With the statute never previously invoked, there’s no judicial precedent clarifying its limits.

Section 338

There’s also Section 338 of the Tariff Act of 1930 (the infamous Smoot-Hawley Act) that, like Section 122, has never been deployed. It authorizes the president to impose tariffs of up to 50 percent on imports from any country that “discriminates” against US commerce as compared to other nations.

The statute is remarkably short and vague. It assigns a role to the US International Trade Commission (USITC), which has a duty to “ascertain and at all times to be informed” whether discrimination is occurring and to “bring the matter to the attention of the President, together with recommendations.”

But whether this functions as a procedural prerequisite or merely an advisory channel is unclear. The statute separately authorizes the president to impose tariffs “whenever he shall find as a fact” that discrimination exists. Does that language empower the president to act unilaterally, or must he await Commission findings? The text doesn’t say.

The Congressional Research Service has suggested that Section 338 falls into a category of tariff authorities that “do not contain” requirements for a federal agency to “conduct an investigation and make certain findings before tariffs may be imposed.” But this interpretation has never been tested by any administration or any court.

And what counts as discrimination in the first place? The law doesn’t say with any precision. Proving discrimination could be challenging when targeting World Trade Organization members bound by most-favored-nation requirements. Or would it? The administration could argue that any country maintaining tariffs on American goods—or any country with trade practices the president dislikes—is “discriminating” against US commerce.

The United States threatened to invoke Section 338 several times during the 1950s to advance foreign policy goals, but never followed through. The statute hasn’t been meaningfully tested in modern courts, which means its boundaries remain undefined. Would courts defer to an aggressive interpretation of the president’s authority? Would they require USITC involvement? No one knows. For an administration intent on maximizing its discretion, that ambiguity could be a feature, not a bug.

The Underlying Problem

Unfettered use of Sections 122 and 338—along with better-known statutes like Sections 301 and 232—could essentially recreate the IEEPA predicament. In practice, this means the president can continue reshaping tax policy and the business environment on a whim, redistributing hundreds of billions of dollars and imposing pervasive uncertainty, without express congressional authorization.

The Court did important work by reining in the misuse of IEEPA. But judicial intervention can only go so far. Congress spent decades handing off its constitutional trade authority to the executive branch, and these delegations remain largely intact. Until lawmakers reclaim some of that authority and add serious procedural safeguards, the risk of arbitrary tariffs will continue.

The Court did its job. Now Congress needs to do its own.

It's Liberation Year [updated]

Remember so-called Liberation Day, when the Toddler in Chief announced to the world tariffs that split asunder world trade, and wrecked the very domestic economy he reckoned he was going to "save."

Well ...

... and ...

UPDATE:

"There is nothing like a Jobs Wednesday report to remind you that the Donald is utterly clueless when it comes to economic reality. He got a report card for January that shows during his first 12 months, the US economy did not generate a single new job in the goods producing sector!

"That’s right. The jobs figure (SA) for the combined manufacturing, construction, mining and energy sectors (blue line, below) for January 2026 was 21,501,000, which was actually 58,000 below where it stood in January 2025 (21,559,000). And in the case of manufacturing alone (dotted red line), the job count was down by 83,000 in January compared to a year ago.

"It is thus hard to see how those 'big beautiful tariffs' have generated the boom constantly ballyhooed by the White House. For crying out loud: The jobs count in the entire US industrial economy has been shrinking for the entire past year! 

"Not surprisingly, the dismal graph above didn’t dissuade the Donald one bit from crowing about 'GREAT JOBS NUMBERS,' even though the 130,000 monthly increase in January occurred in all the wrong places and then only by virtue of the BLS’ seasonal adjustment black magic.

"We treat with those factors at more length below, but here’s the spoiler alert: During the Donald’s first year the overall US economy purportedly generated 334,000 new jobs (according to the BLS), but fully 789,000 or 236% of those additional jobs were in the education, health care and social services sectors—the funding for which comes almost entirely from government budgets or tax exempt employer health care plans 

"The rest of the economy actually recorded a 455,000 job shrinkage!"

~ David Stockman, from his post 'Schooling The Donald On The BLS Jobs Scam'

Americans? Libertarians did try to warn you

"[I]n light of how the past year has unfolded, consider cutting your friendly neighbourhood libertarian some slack. After all, we did try to warn you.

"On immigration, speech and trade, Americans are living in a libertarian’s nightmare. ... a terrifying pattern and an undeniable vindication of the long-held libertarian view that the steady growth in the size of the federal government and executive power would lead to precisely this kind of runaway authoritarianism.

"Libertarians have argued that the only way to prevent such abuses is to reduce the power of the federal government itself — abolishing unaccountable federal agencies, scaling back the administrative state, cutting spending — and to restore the balance of powers by reining in the executive. This path has generally been treated as hopelessly naïve at best, and morally suspect at worst. ... Yet it has never been more obvious that the grab-and-grow approach to power is a destructive and self-defeating way to conduct politics.

"To see why, consider how we got here.

"The Department of Homeland Security arose with very little opposition in the wake of Sept. 11 ... As the years went on, Homeland Security — and especially Immigration and Customs Enforcement, within it — got comfortable operating under a series of exceptions to the Constitution ... So it can be no surprise that ICE officers are roaming the streets of American cities today with an unclear mandate, overpowered military-style gear and a dire misunderstanding of the constitutional limits on their behaviour.  ...

"Trump 2.0 has made the libertarian case more obvious ... But it would be a mistake to treat President Trump as the origin of the ultra-powerful presidency. He is merely picking up the weapons that previous administrations left lying around and waltzing through the loopholes they opened.

"Mr. Trump has a record of threatening media and platforms under various statutory and emergency authorities. He recently mused that when '97 percent' of media coverage is negative, it ceases to be 'free speech.'  ...

"But the project of growing executive power has been bipartisan. On speech, officials in the Biden administration leaned on social-media platforms to take down what they deemed Covid and election misinformation without explicit action from the F.C.C. The Supreme Court disposed of a case, Murthy v. Missouri, challenging this “jawboning” ...

"And Mr. Trump’s tariffs — levelled and removed at will and without the participation of Congress, where the Constitution places the primary power — have disrupted and destabilised the global economy and undermined America’s role in it. ...

"Mr. Trump’s tariffs depend on a legally dubious claim that trade deficits and ordinary commerce constitute a national emergency, allowing him to bypass Congress under the International Emergency Economic Powers Act. (Jimmy Carter once invoked it to freeze Iranian assets.) Mr. Trump’s tariffs are not an aberration so much as the latest example of how emergency powers, once normalized, become a standing invitation to rule by fiat.

"One thing immigration, speech and trade have in common is that in recent American history, the power to control each of them has settled into the hands of the executive. ... The Supreme Court is reviewing the limits of the president’s control over tariffs and executive agencies. ... The libertarian prescription, now and always, is to scale back the size and scope of the federal government. Devolve power to states and individuals. Cut spending. And rebalance power away from the executive branch. ...

"The good news is that Americans are increasingly waking up to the dark reality of [an] overbearing federal government. ... Similarly, Americans of all stripes have turned dramatically against Mr. Trump’s ICE enforcement actions. There could be — a libertarian can still dream — a grass-roots movement to shrink government that doesn’t end up co-opted by one of the major parties, as the Tea Party was. ...

"But this glimmer of hope is faint. ...

"Instead of a winner takes all approach to power, it’s time to consider working toward a system where there is much less power for the winner to take. No one wished events would prove libertarians wrong more than libertarians themselves. There’s nothing more annoying than an 'I told you so.' But if more Americans are now ready to limit power before it is abused again, they are welcome to join us."

~ Katherine Mangu-Ward from her New York Times free-access op-ed 'Libertarians: We Told You So'

Tariffs: "The experts were correct all along"

"Tariffs have caused higher prices on a broad array of retail goods. The experts were correct all along."

~ Phil Magness

"Trump supporters continue to lie for him." [updated]

"Trump supporters continue to lie for him. Tariffs are not about fentanyl, national security, or even jobs.
    "They're about consolidating power for the sake of using it arbitrarily."

~ Keith Weiner

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UPDATE:

"Trump’s demand to annex Greenland either through money or the military is becoming the catalyst for the possible destruction of the Atlantic Alliance. Trump could not do more to serve the geopolitical interests of Russia and China if he was an actual puppet of Moscow and Beijing."

~ Richard Ebeling

"As an American, I have one thing to say to my many European friends: Do not back down in this confrontation. Up to now, both the EU and the major European powers have sought to appease Trump by offering him concessions, flattery, personal gifts, and other forms of tribute. This strategy has not worked and should be abandoned immediately.

"Donald Trump is fundamentally a bully who wants to dominate everyone around him. Trying to placate him with concessions is a fool’s errand ...

"What makes any European think that conceding Greenland will mollify Trump? He will simply come back for more, later. ... [And a]t this point, Trump’s America has amply demonstrated that it will not be a reliable ally when push comes to shove. It has already abandoned Ukraine, and stated in November’s National Security Strategy that Europe has fallen behind the Western Hemisphere in terms of American priorities.  

"Europeans should keep in mind that those countries that stood up to Trump’s threats in 2025 ... all did well and did not have to succumb. ...

"It may be the case that the world will have to risk suffering a global recession as more countries stand up to Trump and retaliate against his policies. But a U.S. politician who wants to weaponise trade and use it as a lever for territorial expansion needs to be taught a painful lesson."

~ Francis Fukuyama from his column 'Don’t Back Down, Europe: Trump’s tariff threats against allies should be the last straw.'

"One of the main differences between this Trump Administration and the previous term: he is currently surrounded by people who take his craziest ideas and then come up with elaborate rationalisations for why he should do them."

"One of the main differences between this Trump Administration and the previous term: ... the adults from the first term either said 'enough' after Jan 6th and walked away, or they found themselves driven out because they refused to budge on one or more of Trump's craziest ideas.

"That means the 2nd term self-selected for people who, through their own lack of virtue, are unbothered by the ethical failures of the first term, and people who are True Believers (tm) in the craziest schemes of Trumpism today. Or both. ...

"[So h]e is currently surrounded by people who take his craziest ideas and then come up with elaborate rationalisations for why he should do them.

"Trump wants tariffs on everyone and everything? 'You know, Mr. President, there's this law called IEEPA...'

"Trump proposes some bonkers scheme to invade Greenland because he wants to make the country larger? 'You know, Mr. President, Greenland is actually important for US national security...'

"In the previous Administration, there were at least a few adults who shut down the wackiest impulses of Trump or deflected them to other areas. Now, flattering Trump's wackiest impulses is a pathway to promotion."

~ Phil Magness

"The adults in his previous term were people who believed in real governance—whether one liked their particular ideological or policy leanings or not—and thought Trump could be moderated with intelligent guidance. They were patriotic people who wanted to serve their country whether or not they approved of who has been elected.

"This time, every adult knew Trump could not be moderated, that they could not effectively serve their country, but could only support the crazy or be destroyed. So the stayed away in droves.

"And of course that suited Trump just fine. The first time around he was uncertain, and he wanted the patina of serious expert people around him. But he chafed at not being able to control them, and he came to realise all he needed (personally, with certainty, and possibly politically) was the continued adoration of the MAGA crowd. So he has been happy to not have any qualified people on board, but to have sycophants who both inflate his ego and keep the MAGA folks swooning in political ecstasy.

"And the adults are just sitting by thinking about whether an actual seizure of power through cancelled or rigged elections is [possible], and how to prevent it if there's a real danger of it, and how to restore some sanity, decency, and global trust when this passes."

~ James Hanley

“‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded"

“‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded — and once they are suspended it is not difficult for anyone who has assumed such emergency powers to see to it that the emergency will persist." 

~ Friedrich Hayek, from his 1979 book Law, Legislation & Liberty, Vol III: The Political Order of a Free People

"Yet today protectionism is being used by some American politicians as a cheap form of nationalism..."

"Yet today protectionism is being used by some American politicians as a cheap form of nationalism, a fig leaf for those unwilling to maintain America's military strength and who lack the resolve to stand up to real enemies—countries that would use violence against us or our allies. Our peaceful trading partners are not our enemies. They are our allies.

"We should beware of the demagogues who are ready to declare a trade war against our friends, weakening our economy, our national security, and the entire free world, all while cynically waving the American flag." 

~ Ronald Reagan from his Radio Address on Canadian Elections and Free Trade, November 26, 1988

We're reminded today of a man ranked by Hayek as one of the greatest classical liberals.  In this guest post by Jim Powell, we learn about William Ewart Gladstone, who so often started on the wrong side of an issue, and so frequently thought his way to the right side ...

William Ewart Gladstone’s Great Campaigns for Peace and Freedom

by Jim Powell

IN THE HEYDAY OF CLASSICAL LIBERALISM, British politics was dominated by one man: William Ewart Gladstone. He entered Parliament at age 23, first held a cabinet post at 34, and delivered his last speech as a Member when he was 84. He served as Prime Minister four times.

Nobel Laureate F.A. Hayek ranked Gladstone among the greatest classical liberals. Lord Acton believed Gladstone’s supremacy was undisputed. Paul Johnson declared there is no parallel to his record of achievement in English history. One might add there are few parallels anywhere.

As Chancellor of the Exchequer in four ministries, Gladstone fought the most powerful interest groups. He helped abolish more than 1,000—about 95 percent—of Britain’s tariffs. He cut and abolished other taxes year after year. Imagine, if you possibly can, our income tax with a single rate of 1.25 percent. That’s what was left of the British income tax when Gladstone got through hammering it down. He wasn’t satisfied, because he wanted to wipe it out.

Gladstone believed the cost of war should be a deterrent to militarism. He insisted on a policy of financing war exclusively by taxation. He opposed borrowing money for war, since this would make it easier, and future generations would be unfairly burdened.

Gladstone’s most glorious political campaigns came late in life: to stop British imperialism and to give the oppressed Irish self-government. Gladstone showed that even in such lost causes, friends of freedom had the strength and courage to put up a tremendous fight that would never be forgotten.

TO BE SURE, GLADSTONE WASN'T A perfect hero. Having matured in an era when his government had limited power and committed few horrors, Gladstone figured it could do some good. For instance, he approved taxes for government schools. But part of the problem was that government revenues soared as Gladstone cut tariffs and other taxes, and political pressure became overwhelming for government to spend some of the loot.

Despite his errors, Gladstone towered above his rivals. His most famous opponent was Benjamin Disraeli, the Tory who promoted higher taxes, more powerful government, and imperial conquest. Gladstone’s liberal rivals were mostly fans of Viscount Palmerston, best known for his bullying of weaker countries. During the late nineteenth century, Gladstone’s chief Liberal rival was Joseph Chamberlain, a socialist who became a vigorous imperialist. Without Gladstone’s influence, there probably would have been fewer gains for liberty, and the losses probably would have come faster.

Gladstone’s enduring contribution was to stress the moral imperative for liberty. Influential British philosophers Jeremy Bentham and John Stuart Mill had almost banished morality from political discussion, as they touted the greatest-good-for-the-greatest-number principle, but Gladstone brought out the moral dimension of taxes, trade, everything. Whatever he did, remarked historian A.J.P. Taylor, was a holy cause. 

Gladstone’s moral fervor was a key to his popular appeal. As historian J.L. Hammond observed: It is safe to say that for one portrait of anybody else in working-class houses, there were ten of Gladstone.

Gladstone vanquishes Disraeli

Trump's tariff belief "the equivalent of a belief in witches or a belief that the earth is a flat disc balanced atop a tower of turtles."

"I realise that Trump true believers are unpersuadable; this outcome is assured by their blind faith in Trump. But for those of you who still listen to reason and facts, all you need do is to reflect on the fact that Trump believes that U.S. trade deficits in goods with individual countries - such as the U.S. trade deficit with Switzerland - is an economically meaningful concept that reveals that we Americans are 'losing' in our trade with Switzerland. This belief is the equivalent of a belief in witches or a belief that the earth is a flat disc balanced atop a tower of turtles."

~ economist Don Boudreaux