About The Trade Deficit

Chris Kohler

I want my money back.

Here Comes Another Standoff

SCOTUS tells him his tariffs are illegal, and so what does Trump do? He doubles down - because of course.

SCOTUS issued the order. Now let's see SCOTUS enforce it.

Trump blasts 'deeply disappointing' Supreme Court decision on tariffs; announces new global tariff

Trump said his administration would be imposing a 10% global tariff rate over and above existing tariffs, hours after the court's ruling Friday.

WASHINGTON — President Donald Trump called the Supreme Court justices who struck down his sweeping tariffs a "disgrace to the nation" during a White House press briefing on Friday, hours after the nation's top court released its decision.

"The Supreme Court ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what is right for our country," Trump said.

The president also announced during the briefing that his administration would now add a 10% global tariff over and above current tariffs. He said he would sign an executive order imposing the new tariffs after the press conference, but those policies will only prolong the debate and keep alive an issue that is largely unpopular with voters.

About 6 in 10 Americans said Trump had gone too far on imposing new tariffs on other countries, according to an AP-NORC poll from January.

Even more worrisome for a president elected on the promise of fixing Americans’ concerns about affordability, 76% said in a poll conducted last April that Trump’s tariff policies would increase the cost of consumer goods in the U.S.

Six of the court's nine justices ruled that the president does not have the authority to impose tariffs under the International Emergency Economic Powers Act, which the Trump administration argued gave them the ability to do so.

The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.

The White House also debuted new, moodier lighting in the briefing room right before the president’s appearance. Softer blue lights were lit behind the podium. It was not clear whether the change was coincidental with the president’s appearance.

The Republican president has been vocal about the case, calling it one of the most important in U.S. history and saying a ruling against him would be an economic body blow to the country. But legal opposition crossed the political spectrum, including libertarian and pro-business groups that are typically aligned with the GOP.

Polling has found tariffs aren't broadly popular with the public, amid wider voter concern about affordability.

Numerous small businesses and states that challenged the tariffs argued that Trump illegally used emergency powers to set import taxes on goods from nearly every country in the world, putting their businesses at risk of bankruptcy.

Justices on the nation's highest court made the decision months after they agreed to take up an unusually quick hearing on the case at the request of the Trump administration.

Trump Loses A Big One

Of course, we have no idea what Trump will decide to do. But - also of course - there's some likelihood that he'll largely ignore the ruling. Especially considering the lack of any real order or guidance coming from the ruling.

Supreme Court rules Trump doesn’t have the tariff authority he claimed

The justices expressed skepticism in November that the administration could impose sweeping tariffs under a federal law granting emergency powers.

The Supreme Court ruled Friday that President Donald Trump doesn’t have the tariff authority he claimed, in a decision authored by Chief Justice John Roberts.

The ruling addressed a key Donald Trump policy as the high court considers the scope of presidential power across several cases this term. The court’s Republican-appointed majority has broadly empowered the Republican president but has occasionally checked him.

The justices agreed in September to consider the tariff issue on an expedited basis, granting review in two separate cases, both of which the administration lost in the lower courts. One of them came through a specialized trade and appeals court, and the other came through a general federal court in Washington.

When the high court heard oral arguments in November, the justices sounded skeptical of the administration’s position that Trump was authorized to impose the sweeping tariffs under a federal law called the International Emergency Economic Powers Act (IEEPA).

The president cited the law when he announced the so-called trafficking tariffs on products from Mexico, Canada and China due to what he said was their failure to stop fentanyl from coming to the United States. He also cited that law when he announced the so-called reciprocal tariffs on “all trading partners.”

At the November hearing, Trump appointee Amy Coney Barrett questioned U.S. Solicitor General John Sauer on the latter, worldwide tariffs. “And so is it your contention that every country needed to be tariffed because of threats to the defense and industrial base? I mean, Spain, France? I mean, I could see it with some countries, but explain to me why as many countries needed to be subject to the reciprocal tariff policy as are,” Barrett said. Sauer said “asymmetric treatment” from other countries “is a global problem.”

In the case called Trump v. V.O.S. Selections, the Federal Circuit ruled that Trump overstepped his authority in attempting to rely on IEEPA. “The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs,” the circuit court wrote in a divided ruling that split the court 7-4, though not strictly along the party lines of the presidents who appointed the judges.

In the other case, Learning Resources v. Trump, U.S. District Judge Rudolph Contreras, an Obama appointee, wrote that if Congress “had intended to delegate to the President the power of taxing ordinary commerce from any country at any rate for virtually any reason, it would have had to say so.” He wrote that no other president “has ever purported to impose tariffs under IEEPA.”

And it's going to be a big fucking mess just to unwind all the refunds on tax payments and surety bonds and all the other collateral shit. Get ready for some more major fuckery as the grifters flock to the smell of even more easy money at taxpayer expense.

So, who exactly is losing here?

Supreme Court Trump tariff decision impact: What to expect as fight for billions in refunds begins

• The Supreme Court ruling that many of President Trump’s tariffs are illegal will lead to a process where billions of dollars in refunds will be sought by companies.
• Importers also laid out billions for bonds and collateral required by U.S. Customs and Border Protection to guarantee payment of trade duties.
• The ruling provided no guidance on refunds, and in his dissent, Justice Brett Kavanaugh made a point of noting this and he referred to comments during the oral arguments that the refund process may be a “mess.”

U.S. importers will be facing double hurdles trying to recover billions in tariff costs now that the Supreme Court has ruled President Donald Trump’s IEEPA tariffs are illegal.

Companies large and small may be eligible for refund payments that in total could reach hundreds of billions of dollars, but trade attorneys have warned that tariff refunds could be delayed, depending on how U.S. courts rule and how U.S. Customs goes about issuing the payments.

Trump wrote in a social media post on Jan. 12 that “it would take many years to figure out what number we are talking about and even, who, when, and where, to pay.” He added: “It would be a complete mess, and almost impossible for our Country to pay.”

Record tariff revenue has been recorded by the U.S. government, with tariff collections surging in January to $30 billion and reaching a year-to-date total of $124 billion. That is up 304% from the same period in 2025.

The ruling was silent on whether tariffs that have been paid under the higher rates will need to be refunded.

But in his dissent from the majority SCOTUS decision on Friday, Justice Brett Kavanaugh wrote, “the Court’s decision is not likely to greatly restrict Presidential tariff authority going forward. But the Court’s decision is likely to generate other serious practical consequences in the near term. One issue will be refunds. Refunds of billions of dollars would have significant consequences for the U. S. Treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”

In the lead-up to the decision, importers and customs experts have been pushing back on claims about refunds being a “messy” process, saying that because the tariffs being paid are itemized, the process for refunding the money should be straightforward.

But importers betting on a cash infusion from tariff refunds should be aware there’s no set timeline and any rush for refunds could overwhelm the system and likely lead to long delays, Tim Keeler, partner and co-leader of international trade at Mayer Brown and former chief of staff for U.S. Trade Representative Susan Schwab, recently told CNBC.

The Court of International Trade is typically in charge of refund processes.

Companies will not only be seeking billions in tariff refunds, but billions are tied up in customs bonds and collateral. Tariffs not only lead to additional import taxes, but by inflating the cost of the products, result in the need for importers to increase the value of customs bonds the government requires them to hold.

International trade experts told CNBC that with some tariffs increasing from 10%-25% or more for certain products, importers are facing customs bond amounts that now range from the minimum bond amount by regulation of $50,000 to as high as $450 million.

The increase in bond values have left some companies forced to put up additional money in the form of collateral to ensure they could pay the tariffs.

The rise in tariffs and related need for bonds and collateral has led to a historic number of “bond insufficiencies.” U.S. Customs told CNBC they identified over 24,000 customs bond “insufficiencies” valued at nearly $3.6 billion. That’s double the 2019 level when insufficiencies first soared due to Trump’s first-term tariffs under Section 301 of the 1974 Trade Act.

Importers have told CNBC because tariffs are itemized, as are their customs bonds and collateral documentation, in theory they should be able to receive their refunds quickly. However, trade attorneys also say it may also be difficult for companies to get any refunds on bond overpayment or collateral quickly because the insurers will want to make sure they are not exposed to any tariff payments.

Vincent Moy, international surety leader for Marsh Risk, recently told CNBC that companies should expect some lag time in receiving these customs bond funds due to insurance paperwork requirements. The insurance company will need to verify and audit the paper trail before it releases any collateral.

Some sureties have collateral return review procedures that can take 30 to 60 days for them to go back to underwriting to review. Many small and medium-sized businesses were expected to be reaching out to their insurers ahead of the decision to get the process of review started. “If you are hoping that the collateral will just be returned in due course, the squeaky wheel may make this happen a little bit faster,” Jennifer Diaz, board-certified international attorney at Diaz Trade Law, recently told CNBC.

What We All Knew

Trump's a fuckin' idiot. And anybody still supporting him is a fuckin' idiot too.

US Trade Deficit Widens, Capping One of Biggest Since 1960

The US trade deficit widened in December, capping a turbulent year of erratic tariff policy.

The goods and services trade gap expanded from the prior month to $70.3 billion, Commerce Department data showed Thursday. The shortfall culminated in a full-year deficit of $901.5 billion, still one of the largest in data back to 1960.

The December deficit reflected a 3.6% increase in the value of imports. Exports of goods and services declined 1.7%. The median estimate in a Bloomberg survey of economists called for a $55.5 billion overall shortfall.

The trade data were notably volatile in 2025 on a month-to-month basis as US importers reacted to a persistent drumbeat of tariff announcements from President Donald Trump. Gold and pharmaceutical imports were particularly choppy as companies raced to beat higher duties.

The increase in goods imports in December included gains in computer accessories and motor vehicles. The decline in exports largely reflected fewer outbound shipments of gold, according to the trade report.

The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product, which will be released on Friday. Before the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add about 0.6 percentage point to fourth-quarter growth, now estimated at 3.6%.

After adjusting for changes in prices, which filters into the real GDP measurement, the merchandise trade deficit widened to $97.1 billion in December, the most since July. Trade in gold, unless used for industrial purposes such as in the production of jewelry, is excluded from the government’s GDP calculation.

Trump has leaned on tariffs as part of his strategy to reduce reliance on foreign goods, encourage domestic investment and correct decades of declines in manufacturing employment. He and his economic team have criticized research concluding that Americans have borne the costs of tariffs.

- and -

Hassett Attacks NY Fed for Study on Tariffs Hurting US Companies

National Economic Council Director Kevin Hassett said a study from the Federal Reserve Bank of New York showing US companies bear most of the tariff burden “is an embarrassment” and the people associated with it should be “disciplined.”

“What they’ve done is they put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class,” Hassett said Wednesday on CNBC.

Hassett said US consumers will be made better off by tariffs.

The paper published last week by the New York Fed found that nearly 90% of the economic burden from tariffs in 2025 was borne by US companies and consumers. The New York Fed did not immediately respond to a request for comment.

Today's Belle

• Stickiness
• Elasticity
• Shrinkflation
• Short attention span

The prices we're paying are tied directly to the combination of tariffs, plus the exporting country's inflation rate.

You want a new rug for the kitchen? A year ago it was $100. In April 2025, Trump hit the country where it's made with a 50% tariff. And that tariff smacked that country's economy badly enough that its inflation rate popped up into the low double digits - say 12%.

Your new 100-dollar kitchen rug will now cost you about $170.

EVERYTHING TRUMP TOUCHES

TURNS TO SHIT

About Those Tariffs

via google:

A Kiel Institute for the World Economy study found that American importers and consumers bear nearly all (96%) of the costs from recent U.S. tariffs, contradicting claims that foreign producers pay, with foreign firms absorbing only about 4% through price cuts. Analyzing $4 trillion in trade, the research showed these tariffs act as a consumption tax on Americans, boosting U.S. revenue but increasing domestic prices and reducing trade volumes rather than forcing foreign price concessions. The study highlights that while generating revenue, tariffs primarily shift costs to U.S. businesses and households, hurting the U.S. economy most.

Key Findings from the Kiel Institute Study

• Cost Burden: U.S. importers and consumers pay 96% of the tariff cost, while foreign exporters absorb only 4%
• Mechanism: Tariffs function as a domestic consumption tax, with higher prices passed on to American buyers
• Trade Impact: Instead of price cuts, targeted foreign exporters reduced trade volumes, choosing to maintain margins on fewer sales
• Counter to Policy Claims: The findings challenge the narrative that tariffs are a cost borne by trading partners, demonstrating they extract revenue from the U.S. economy.

Broader Economic Effects

• U.S. Economy Harmed: The Kiel Institute's KITE model projects significant harm to the U.S., with potential drops in output, higher consumer prices, and reduced exports
• Global Impact: Tariffs affect all countries, though to varying degrees, with the EU also experiencing negative impacts

In essence, the Kiel Institute study concludes that US tariffs largely function as a tax on Americans, increasing costs for consumers and businesses rather than extracting concessions from foreign entities.

That Ad

Doug Ford is said to have aired this in some US markets, and it apparently put a knot in Trump's Underoos, so of course, he threw one of his little tantrums and cut off all trade talks with the Canadians.

Trump's knee jerk tweet:

The message in the ad was indeed edited, but the editing didn't change the gist of Reagan's remarks.

Trade barriers always end up being bad for everybody - especially when they're imposed with no real thought by a petty vindictive numbskull like Trump.

Today's Belle

Gaslighting is all they've got now.

Notice how the Trump gang dismisses the ranchers' complaints, telling them they should be grateful their product is selling at a high price, and that they should be helping consumers by lowering their prices.

Classic abuser.

Today's Rich

Econ 120 - Tariffs

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Today's Rich

If Trump doesn't TACO on this tariff shit, it's just possible we find out what that meeting at the Veep's house was all about real soon.

The Slam Is Coming

First:

On average, President Two-Weeks has flip-flopped on tariffs every 4 days.

Second:

He's 0-fer-90 on his trade deals.

Third:

The business bros are ignoring all this weird shit and forging ahead, &/or finding ways to countervail it.

Fourth:

I think we can expect higher prices long after the main effects of tariffs ease off. Sellers who enjoy relatively high profit margins may be willing to eat some of the tariffs, but grocers (eg) don't have that option.

And we've already seen what happens when prices go up because of natural causes, and then don't go back down once the market's upward pressure has eased. The parasite investor class won't tolerate low or no dividends for long, and they're going to expect companies to make it up to them.

Today's Belle

It's not policy - it's a mood swing.

Today's Belle

Scott Bessent is the sales guy who knows the boss has fucked up the product, so he has to try to bullshit his way thru with techno-terms that he desperately hopes will fog the issues just enough to keep the customer placated.

Today's Belle

No ships have sailed from China, bound for the US since last Wednesday.

There are no ships (or very few - reports are all over the place) at berth in SeaTac or LA/Long Beach.

When demand stays steady, and supply decreases, price will go up.

Stand Up - Fight Back

Brace For Impact

There's this thing they teach in Econ 101 (and any given Marketing Seminar) called elasticity.

Trump's tariffs are in effect, and the last un-tariffed cargo ship we're expecting from China sailed a week or two ago.

It takes 2 or 3 or 4 or 5 weeks for the goods to sail o'er the bounding main, and then another week or more to get the stuff from the ports to the local Walmart.

So we can expect interruptions and delays and shortages and higher prices beginning in a month or so.

But one other thing about elasticity: even if Trump manages to get his head out of his ass long enough to think up some bullshit story about how he won The Great Patriotic Trade War, shit doesn't just suddenly get put right, and we're back to normal overnight.

First, other countries in the world - some we call "friend" - have been itchin' for a chance to fuck us over for a very long time. New trade deals that exclude the US are being worked out right now, and there's more than a fair probability that the rest of the world takes this opportunity to hedge their bets and not "get back to normal" - not when the US can so easily become unreliable.

Second, Capitalism leans pretty heavily on the notion of "scarcity" to keep their prices high in order to maximize shareholder value. There's a whole big bunch of companies creaming their jeans over the prospect of milking this problem for every nickel they can squeeze out of it, and plenty of them will never go "back to normal" because they're learning that lots of us will just sit here and take it. So don't expect prices to go back down once this shit is over - because they're going to find a way to keep us hangin' for as long as they can.

That About Covers It

Americans didn’t vote for less stuff that costs more

Trump is wrong to say he has buy-in for transforming the world’s biggest economy.

President Donald Trump seems to be in denial about the unpopularity of his trade wars. On what he intended as a victory lap to coincide with the 100th day of his second term, he repeatedly attacked pollsters as “crooked people” who put out “fake polls.”

At a rally in Michigan on Tuesday, Trump claimed his approval rating was “in the 60s or 70s.” A Washington Post-ABC News-Ipsos poll puts it at 39 percent. This is the same share of American adults as approve of his handling of the economy. And nearly two-thirds, 64 percent, oppose Trump’s tariffs on imported goods.

These numbers are consistent across several recent public surveys. This led to one of the more awkward moments of the past week. During a live interview Tuesday, Fox News correspondent John Roberts asked Stephen Miller, a White House deputy chief of staff, about his network’s polling. “Particularly on the economy, tariffs and inflation, he’s well underwater,” Roberts said of Trump. To which Miller responded: “It is our opinion that Fox News needs to fire its pollster. … We don’t acknowledge any of that polling.”

In another interview Tuesday, Terry Moran of ABC News asked Trump about economists warning that his trade war with China will cost the typical American family thousands of dollars a year. The correspondent said many who voted for Trump fear the fallout. Trump replied: “Well, they did sign up for it, actually. And this is what I campaigned on.” Then he insisted that China will “eat those tariffs” rather than raise prices. This is unimaginable.

During a Cabinet meeting Wednesday, Trump seemed a little more willing to acknowledge that a protracted trade fight with China will force consumers to adjust their behavior. “Maybe the children will have two dolls instead of 30 dolls,” he said. “And maybe the two dolls will cost a couple bucks more than they would normally.”

This sounded like Trump’s “malaise” moment. In 1979, President Jimmy Carter delivered a notorious address from the Oval Office that was similarly motivated by a lamentation of U.S. dependence on foreign imports. In Carter’s case, though, the import was oil. “We can’t go on consuming 40 percent more energy than we produce,” he said. Americans didn’t want to wear cardigans or lower their thermostats. Outside wartime, calling for austerity has rarely been a winning political message.

Trump’s assumption, for decades, has been that Americans can have it all. During the rally Tuesday, he promised to make the country wealthy again. Yet here he was acknowledging to his Cabinet that Americans might need to pay more money for less stuff.

The president is right to say that he campaigned on imposing tariffs. At his rallies, he extolled the beauty of the T-word. Yet many of his voters did not think they were voting to end the era of consumerism. This has become a refrain from his administration. As Treasury Secretary Scott Bessent said in March, “Access to cheap goods is not the essence of the American Dream.”

Yes, Americans still want to put inexpensive Barbies, G.I. Joes and Disney dolls under their Christmas trees. But the United States depends on Chinese imports for far more than cheap toys.

Even a slight majority of Republicans, 51 percent, say they think Trump’s economic policies will cause an economic recession in the short term, even as they overwhelmingly continue to support him, according to the Post-ABC-Ipsos poll. Asked whether Trump’s policies will put the U.S. economy on a stronger foundation in the long run, only 31 percent of Americans said yes; 42 percent said they will leave us weaker, and 22 percent said it’s too soon to say.

Trump said Friday on social media that the economy is going through a “transition stage.” He’s blaming his predecessor and urging patience. So far, the U.S. economy has proved quite resilient, even as businesses pause investment decisions while they wait for some certainty about what’s ahead. Though the labor market cooled last month, the government said Friday that employers still added 177,000 jobs. And though the U.S. economy shrank for the first time in three years during the first quarter, annualized gross domestic product contracted by just 0.3 percent.

A central challenge for Trump’s project is that he still has not secured buy-in to fundamentally transform the world’s biggest economy, let alone to decouple from China, the world’s second-largest economy. A resolution disapproving Trump’s “Liberation Day” tariffs failed in the Senate on Wednesday with only 49 votes but would have passed had two senators not been absent. Sen. Rand Paul (R-Kentucky), who deserves credit for defending Congress’s constitutional prerogative, said afterward that many GOP senators privately dislike the tariffs and will start speaking out if the economy continues to weaken. They hope Trump cleans up the mess first.

With luck, this might still be possible. China signaled a new willingness Friday to start talks with the United States. Container ships that carry goods from China take about a month to cross the Pacific. Trump can get them moving again if both sides come to the table.

Today's Belle

Farmers prefer to earn their money from the markets.