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John Quiggin 
Trump tariffs: the second wave
SCOTUS has ruled that Trump’s wholesale imposition of tariffs citing IEEPA was an unconstitutional usurpation of the taxing monopoly of Congres. Trump’s response has been to double down on chaos and hubris. He has already signed an executive order imposing a general 10% tariff – wait, a day later he raised this to 15% – under a different law, the Trade Act of 1974. Section 122 of this allows the President to impose tariffs of up to 15% for up to 150 days. The enumerated conditions, with no general wiggle room clause, are:
“(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…”
What, you may ask, is a “balance-of-payments deficit”? Paul Krugman has thr background: https://paulkrugman.substack.com/p/tariff-policy-by-the-numbers The 1974 Act is a relic of the days of fixed exchange rates, with runs on currencies when the market started to question the sustainability of the current rate. This happened to the pound sterling on 16 September 1992, 34 years ago. With floating exchange rates, you hardly ever get crises like this. Strictly speaking, the balance of payments for each country is always zero, since net imports or exports on the current account are necessarily balanced by net outflows or acquisitions on the capital account. If China exports more to the USA than it imports, it inevitably acquires more dollars. Section 122 is therefore obsolete.
You can still have “fundamental international payments problems” today. Any of the eight components of the balance – imports and exports of merchandise or services, short and long-term capital inflows and outflows, can be cause for concern on grounds of national independence and resilience. Tariffs are only remotely relevant to one of these headings. An argument on these lines requires an analysis that Trump does not and cannot provide.
Trump’s new tariffs will be promptly litigated like the first wave, all the way back to the Supreme Court. He has just publicly described the majority of the justices as “a disgrace to our nation”, ”not having the courage to do what’s right for our country”, “fools and lapdogs for the RINOS and the radical left Democrats,” and “swayed by foreign interests”. The incredible mansuetude they have hitherto shown Trump has not bought them even minimal civility. The judges have burnt their boats, and they will be motivated to rule in the same way. Add to this that the flat 15% tariff on everybody makes not even a token effort to differentiate between different trade partners and situations, is clearly unlikely to be extended by Congress, and with a working life of 150 days will have no effect on long-term economic relationships. It is merely an inefficient, regressive, inflationary and unpopular tax levy on American households and businesses, and a crushing blow to the credibility of the USA as an actor on the world stage.
The Supremes may not even need to write another ruling saying “same question, same answer”. A commenter at Daily Kos points out that a likely scenario is a District federal judge ruling the new tariffs unconstitutional like the first ones, and issuing a restraining injunction. The Supremes decline to take the case on appeal, for which they do not have to give reasons, and the injunction becomes permanent. End of this particular story.