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The Tariff Ruling Isn’t About Tariffs
Donald Trump's Customs and Border Protection agency said they'll stop collecting trade duties implem
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Congress, DO YOUR JOB.
Will this maybe, excuse me ladies, have congress start to grow a pair of something round and hard ?
The section 122 tariff authority requires a large “balance of payments” deficit, which is not the same things as a “trade deficit”.
“SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY. (a) Whenever fundamental international payments problems require special import measures to restrict imports— (1) to deal with large and serious United States balance-of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) to cooperate with other countries in correcting an international balance-of-payments disequilibrium, the President shall proclaim, for a period not exceeding 150 days (unless such period is extended by Act of Congress).”
Balance of payments includes capital flows in which the US runs a huge surplus (foreign purchases of US assets including stocks and Treasuries) as well as trade flows (including services in which the US runs a huge surplus). From what I’ve read, this law is a relic of the fixed exchange rate/Gold standard system in which a BOP deficit can cause a country to run down its reserves; that system ceased to exist long ago.
There is thus a credible, and perhaps strong, argument that Trump’s sec 122 tariffs are also illegal. His castigation of the Supreme Court may not serve him well if these tariffs are also challenged, which they might be given the risk that he could try to renew them every 150 days.
Also to watch: whither Trump’s various “trade deals” survive as he’s just violated them with this new tariff.
In the meantime, broadly speaking I think the winners are EMs (Vietnam, Brazil, etc) who will see tariffs drop by 5+ ppt, and the losers are DMs and those who thought they had trade deals with the US (UK, Japan, India, etc).
More reading:
https://fortune.com/2026/02/21/trump-tariffs-section-122-trade-law-trade-deficit-capital-account-surplus-balance-of-payments/
https://realeconomy.rsmus.com/are-the-new-tariffs-justified-under-section-122-no/
Interesting that he re-imposes 150 day tariff uncertainty during the mid-term campaign cycle. What is he thinking?
Congressional Republicans are surely unhappy, having to defend tariffs in their campaigns. Democrats should try to force votes on the tariffs.
Justice Gorsuch’s opinion was quite interesting, the last section the civic education part particularly … I wonder how many congress members actually understand this.
It was so odd to see a section like that in a SCOTUS opinion though.
On the other hand, considering what Thomas’ opinion said, Congress needs to wake the fuck up lest they formally become a vestigal branch.
I’m guessing there were some MAGA christians who thought they were voting for the second coming only to find they opened the door for Shiva.
You bet it’s everything. Ten years ago, the vultures started circling and the hyenas could be heard baying in the bush. Apologies (not really) for the animal metaphors – my country is full of the things. Anyway, in this country, far away, a constitutional court also ruled against a aspiring despot. And as much as it was a win for democracy, the more important consequence was how quickly the acolytes turned against him, the moment they smelled blood in the water. He’s still around, and his followers remain substantial and a big part of the electorate, but on their own…and becoming more disenchanted with their dear leader day by day.