Lawfare Archive: Trump’s Tariffs and the Law

On Friday, March 6, Laugh Fair and Georgetown Law are bringing together leading scholars,

“practitioners, and former government officials for installing updates to ECPA, a half-day”

event on what's broken with the statute and how to fix it. The event is free and open to the public in person and online. Visit Laugh Fairmedia.org/ACPAEVENT, that's Laugh Fairmedia.org/ECPAEVENT for details and to register. Visit Laugh Fairmedia.org/ECPAEVENT, that's the reason why we're doing this. To be able to do this, we're going to be able to do this.

To be able to do this, we're going to be able to do this. To be able to do this, we're going to do this. To be able to do this, we're going to do this. To be able to do this, we're going to do this. To be able to do this, we're going to do this.

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“To be able to do this, we're going to do this.”

To be able to do this, we're going to do this. I'm Marissa Wong, internet law fair, with an episode from the Law Fair Archive for February 28th, 2026. On February 20th, the Supreme Court issued its decision and learning resources versus Trump, which held that the International Emergency Economic Powers Act or IEPA

does not authorize the President to impose tariffs. The decision struck down President Trump's IEPA-based tariffs, like the and reciprocal tariffs, but left tariffs faced in other statutes standing. For today's archive, I chose an episode from February 27th, 2025, in which Kathleen Klausin and Peter Harrell, joined Scott Anderson to unpack President

Trump's sweeping tariffs from his first month of his second term.

If legal authorities fully support these tariffs, and what challenges may come next. It's the Law Fair podcast. I'm senior editor Scott Arie Anderson, with Kathleen Klausin, professor of Law at the Georgetown University Law Center and Peter Harrell, a contributing editor here at Law Fair and non-resident fellow at the Carnegie Endowment for International Peace.

Either the tariff provides him leverage and the foreign counterparty caves and gives him what he wants, and that's obviously when. If it doesn't get the foreign counterparty to cave, he gets tariff revenue, and we know he's interested in tariff revenue. Today, we're talking about President Trump's tariffs and the Law.

So we are coming off of what probably I would guess for people who follow tariffs in a national economic law and policy like yourselves has been a pretty busy month. Even somebody who will casually follow these developments like myself has noted a lot of things happening in a very tight time frame.

This has been true across the Trump administration for its first month in office,

but no less true with the trade space. Here's a couple of developments I've been tracking just to lay them out there for listeners who may not be as on top of it that jump out at me as the big items. So January 26, we saw a spat pop up with Colombia over a flights of migrants, where the president leveled briefly or threatened to level.

I eat a base tariff as part of a bigger package of sanctions that quickly got a concession. That was kind of the first salvo that I can recall of tariff actions. The first we heard a set of iEba based tariffs leveled against Canada, China and Mexico, Canada and Mexico delayed for 30 days after some quick negotiations, concessions, China rolled in a few days later.

So we now have a new set of tariffs against China based on that on top of the existing ones. February 10th, we got announcement of expansion of a different type of tariffs on steel and aluminum imports that went and goes into effect later this coming month.

“I think on March 12th, if I recall, February 13th, we see a request for the set of”

recommendations for reciprocal tariffs or tariffs in response to unfair trade and taxation practices that I report to on April 1st, February 14th. We saw an announcement of tariffs on automobiles and conductors from a suit of

pools of up to 25 percent that are set to kick in on April 2nd.

And then just this past week, I am told there is a whole sort of talks about Chinese ships and a whole set of potential tariffs authorities that I have just not had the opportunity to even wrap my head around to really dig into. So there is a lot going on in this space for just 30 days, the first 30 days of Trump 2.0. Peter, let me start with you with this first question, just at the orient us.

How exceptional is this set of actions? How big a departure is this from the trend we saw from Trump 1.0 and the Biden administration? And maybe the longer trajectory of U.S. policy as well. Teriffs were a reality on a Trump 1.0. The Biden administration kept a number in place, kept some continuity there.

Or are we now turning in a new direction as well on top of that?

“So I think we are seeing a really quite significant acceleration of the kinds of tariffs”

that Trump implemented during his first term.

I think what we have seen him here in term 2 is both move much more quickly to begin implementing tariffs. So at the very least threatened much broader tariffs than he implemented during his first term. I mean, he did run for his second term promising that he would be even more of a tariff man and calling tariff the most beautiful or the English language and that kind of thing. I think he is trying to deliver on those campaign commitments.

But just to put it a little bit in perspective, he looked at what he actually did in term 1. So he imposed tariffs on maybe 2/3 or so of U.S. imports from China. But it actually took him about a year and a half, really two years for most of those tariffs to come into force. It was not something that he did kind of on day 1,

and he brought him into force over a period of time and kind of a stage in stages.

And he's just imposed additional 10% tariffs on China within a first couple of weeks of being in office.

During his first term, he imposed 25% tariffs on steel and 10% aluminum. But he also cut some deals with various countries. So like kind of deal with Mexico, kind of deal with Argentina. He's now brought those back both at a higher rate. It's 25% on both metals, not just on steel and he's eliminated all the deals.

That question is about, well, he strikes new deals on that, but at least sort of in posture he's done more. And then he's threatened tariffs not just on Canada and Mexico over fentanyl, but like a really sweeping range of tariffs that you've talked about on a whole bunch of other countries as he gets into negotiation.

“So I think that we are seeing tariffs that are much more extensive both in kind of the number of countries are targeted at.”

And also in terms of the products set that he seems to be keen to target target. And the one, the one cautionary note I would say is, well, all signs point towards

really substantially more tariffs than we saw in first term.

He isn't negotiator. We can't rule out deals. And we saw that already with his 25% tariffs on Canada and Mexico getting postponed for a month. That month now is expiring, so we'll see where this goes. But we don't quite know where it is, but all signs point to more.

I also just want to say it is not only quite different from what he did during term one. It is also just a, I mean, really Kathleen should comment on this more. It is a really dramatic change from many decades of US tariffs. I mean, it is sort of the story of US tariffs by and large. It had been a downward trajectory over 30 years or more prior to term one.

And we now seem to be, you know, moving towards a solid, the trajectory of tariffs seems to be up and the only question is is it up very quickly and very broadly or is it only up a little bit? Well, Kathleen, let me take Peter's invitation there to pull you on this exact point. Because the, the recent turn in this that you can see some elements of continuity,

the ship of state turns slowly. And we've seen this shift towards tariffs really since Trump 1.0. And maybe you could even say a little bit before that. But it's coming on, you know, decades of a period where tariff was, you know, in a lot of ways, a bit of an anathema concept.

“I think growing up in a day is kind of an American neoliberalism,”

being the dominant economic political view. I would definitely was trained and undercame to understand tariff as a bad thing, a failed set of policies. And we're seeing a little bit obviously of a bit of an evaluation. How dramatic is that shift in the broader view of American policy?

And the way America has tried to build the architecture for a policy around the world. For a long time, a leading proponent of eliminating trade barriers. And now, we're seeing it use them in a very strategic fashion. That's right. No, I think you, you hit the nail in the head there.

Scott, in terms of the, the leadership role that the United States played in both a setting up of the World Trade Organization in the 90s. Right, and then really taking a lead and big free trade agreements 90s and early 2000s. As we all know, the transfer to big partnership agreement was, was the, as big ones and it really made the news prior to the renegotiation of the NAFTA.

So that was sort of the, maybe the beginning of the fall, as you put it. But to Peter's point and to, we're both said, what we saw immediately, pretty immediately, right, in the beginning of the first Trump term, was this rediscovery of these tariff tools. Tools that they didn't invent, tools that they didn't come up with, right?

But that it, it, it, it, been on the books for a long time, just as you suggested in your question, had they been dormant, right? They really haven't been used. So we're talking about several different delegations of authority from Congress

or national security so required.

These are largely cold war, year delegations. And now coming back with the vengeance. So this question of these dormant authorities is one of the most interesting parts of the, because we hear of the media talk about tariffs as tariffs. They don't differentiate the fact that we have at least half a dozen different types of tariffs

that are in play at this point.

“The biggest divide that I think gets the most conversation,”

in part, because of some work Peter is published with us at law fair. And some other commentary we've coming out is the divide between IEba tariffs and statutory tariffs, kind of three number tariffs authorities. But even in that statutory bucket, it's a whole ray of different ways we think about how to approach tariffs where Congress has laid out,

different approaches, different shapes of delegations. Break that down for us Kathleen. Talk to us about these three number authorities, which ones come into play,

which ones we see are most important.

And the terrain that they presented before we even pull in this IEba question, which has become a more recent phenomena. Sure. Well, the IEba and we call the three digit tariffs. They do have one main thing in common that I alluded to a moment ago,

which is that they all turn on some determination of a finding by the president or by an agency. And that distinction will be important in our later discussion. But a finding that there's a threat to US national security, a threat to US commerce, to the US economy, some sort of burden or unfairness.

So that we've been wronged. We've been wronged and there's a problem and we need to respond. And so if you look at the history of these delegations, as I said before, they were created at a time to give the president the ability to incrementally add, or maybe we might say temporarily add tariffs when necessary,

to address those threats. So that's what they all have in common. Now, as you point out, they have slightly different rationales and slightly different processes. So the ones that are very familiar to many people, those ones for stealing aluminum, come under Section 232 of the Trade Expansion Act of 1962,

which really expressly says that these imports of stealing aluminum must be a threat to our national security. So we have to do something about them, right? But the other one, for example, that is commonly known as Section 301 of the Trade Act of 1974, which is framed in a less aggressive way, right?

So there's an act policy or practice by a country that's unreasonable or discriminatory. It's unfair to US commerce, right? Then again, the president may act. So sometimes they're framed in terms of a country doing something bad, and we need to respond.

Sometimes they're framed in terms of a product being a threat to our products in some way and we need to respond to that. But overall, that's the theme. And as you mentioned, there are a good half dozen. There are more than that out there, but a good half dozen that have certainly been on the table,

that the president called out in his day one memo on the America First Trade Policy, where he said, "I want these investigations to get going." And that was really the first out of the gate.

“I think a number of people thought on day one,”

we'd actually see tariffs imposed on these bases. But instead, he sent out the call for investigations by the agencies that are named in these delegations to begin the work to set up the foundation for potential tariffs down the road. So it's very interesting, because we, we know tariffs have been on the menu for a long time, for the Trump incoming Trump administration.

It's always at least talked about something discussed in the campaign trail.

Like you said, day one coming in, we saw discussion of these authorities, but nothing kind of rolled out immediately. And then we see the first set of tools that President Trump turns to, is not the existing tariff authorities, but the International Emergency Economic Powers Act, that is IEPA, the 1977 law that I mentioned by Shorthand before,

although not everybody listed or I suspect knows it. Although this being law fair, many of you probably do. Peter, you wrote a phenomenally useful piece for us, hot breaking down the use of IEPA for tariffs.

“I think that really highlighted usefully both the reasons why President Trump might like using IEPA,”

versus the other tariff authorities, the comparative advantages it provides in certain regards. But also some of the legal risks that it entails. Talk to us a little bit about why has the President turned IEPA and what are the potential cost and risks that come with that? So IEPA, not something that we've historically thought about as a tariff statute.

It's origins are really as an emergency statute. It goes past 1977 as sort of a part of a package of post-watergate reforms to various presidential emergency powers. And the idea in IEPA was enacted was essentially that when there is an emergency in international relations,

or whether it is an economic emergency. The President should have some fairly broad authorities in order to respond to that emergency.

So basically, it's been used more than 60 times since it was passed for sanctions purposes.

It's also been used for a variety of other purposes, not all of which over the years have been for emergencies, for example. Oh, I guess about 20 years when Congress let the U.S. export control statutory regime lapse. IEPA was actually used as legal basis of the export control regime. And the Biden administration also used it somewhat creatively, for example,

to impose limitations on Chinese internet connected cars here in the U.S. because of security risks and also to restrict bulk data transfers to China. So it was originally an emergency statute. It kind of evolved away from an emergency use, but is still until Trump came along, been used principally for sort of national security purposes,

where there is some foreign adversary issue that a President's dealing with. Trump used it as the basis for the 10% tariffs that are currently enforced on China, which are allegedly around the stated reason for which is China's involvement in America's fentanyl crisis. And then he had also used it as the basis for the 25% tariffs that were going to be imposed on Canadian and Mexican imports,

basically all imports from Canada and Mexico,

but that which he then suspended before those tariffs came into force for a month to do negotiations. That basis, the sort of stated basis for those tariffs, also being to deal with fentanyl and migration crises. The President is declared on the southern border. And with the Canada tariff, also declared an emergency on the northern border related fentanyl as well. I argued a couple of weeks ago, actually, before the executive orders were out,

“that I think there are a number, A, I, E, has never been used for tariffs.”

And B, I think there are a number of reasons in the history and structure of the statute. That mean I, E, B, and my view does not grant the President tariff authority. It actually would let him prohibit imports and prohibit exports. It's been used that way many times as part of sanctions. But because it's an emergency statute at its core, because of some of the history of it,

I don't think Congress certainly didn't intend it as a grant of tariff authority. And I think it should be read not to include a grant of tariff authority. Now that we actually have the executive orders out, I think, particularly if respect the Canadian tariffs. There are probably a number of other arguments you could make with respect to whether that is a valid use of IEPA, given the nature of the emergency that is declared.

I should say, you know, this is my view. It's not been litigated.

“I think there will be litigated, particularly if he does use it to bring tariffs in on Canada and Mexico.”

I feel fairly confident at that point industry will challenge it. And there will be arguments on the other side. And it'll be quite interesting to those of us in the legal communities. See how this plays out. But the final point, what's interesting to me about is use of IEPA, even the many things are interesting about use of IEPA,

is that he doesn't have to. I mean, it's Kathleen talked about there are many other statutes that he could use, almost without legal question to impose tariffs even on a close ally like Canada or Mexico. I think the reason he doesn't want to use those is that those other legal authorities would generally require either the U.S. trade representative or the Commerce Department to undertake a kind of factually driven investigation,

you know, into an unfair Canadian trade practice or into the national security implications of, you know, U.S. imports of automobiles or something like that. And then would have to subject the response to the findings of that national security investigation, maybe proposes tariffs as a response. But even after a subject, the response also to notice in comment,

at least some chance for public input or historically, IEPA, you know, simply requires a presidential declaration and then provides wide authority for implementation.

“So I think he likes the flexibility it gives him.”

That these other statutes would would would, although ultimately actually give him quite a bit of flexibility,

impose a bunch of procedural checks and hurdles that I don't think he and his administration have wanted to have to deal with. And let me ask one question a slight tangent from a very closely focused tariffs conversation, but on a related question on this. In addition to separate free for using tariffs, in a number of cases here, Columbia being the most notable, but also arguably Mexico, Canada, China, the president is using tariffs as a tool type of sanction

to try and drive a political outcome. Is there a reason why he seems inclined to use tariffs as opposed to economic sanctions

In a lot of these contexts where other administrations have used that tool somewhat more commonly, why the tariff application of IEPA versus other potential applications of IEPA that we see that are a little more established and past executive branch practice.

So I see two answers to that first.

“I think with respect particularly to country like Canada, and you just, you look at Trump's own comments about his concerns on Canada.”

And I think there's a lot of evidence that his citing the fentanyl crisis and wanting to use these tariffs for negotiation over the fentanyl crisis is actually just contextual for a bunch of trade concerns that he has long had. Right? I mean, he's even sat on social media that in order to get an extension of the current kind of tariff ceasefire with Canada. He wants a comprehensive economic agreement or something like that.

Right? So I think there is an element of, he may be engaging in some contextual use of this year. But I think beyond that, I do think, you know, it's interesting. I mean, Trump actually when he campaigned, he both campaigned on tariffs and talked up tariffs. And he actually had several points throughout the campaign. Said he thinks we're over using the U.S. is over using sanctions.

And maybe there'll be long term ramifications from over use of sanctions, which is, which is interesting,

given he during his first term use sanctions quite aggressively as well as tariffs.

These maximum pressure campaigns on Iran and on Venezuela and other countries. But he seems to have moved away a bit from sanctions.

“I think he thinks that tariffs are kind of a better source of leverage in some ways.”

Because I think he may view, you know, tariffs is kind of win-win in the following sense. Like either the tariff provides him leverage and the foreign counterparty caves and gives him what he wants. And that's obviously a win. Or if it doesn't get the foreign counterparty to cave, he gets tariff revenue. And we know he's interested in nairiff revenue. And so, you know, he kind of, whereas if he sanctioned the columbians and they failed the cave,

I'm not sure he'd think he was getting anything out of that.

Or is this way if they failed the cave, at least, you know, gets whatever if you 100 million few billion dollars tariff revenue out of it?

So I agree largely with what Peter said. Firstly, I eat as the low-hanging fruit for the reason he described that you don't need to go through the agencies like you do for many of these other things. And likewise, on why pick the tariff, it looks tough. It sounds, it sounds tough and perhaps easy. It's far reaching, right? You can get a lot of stuff in one. You can just say everything from coming from that place.

“And to Peter's point about the revenue, that's, I think, a longstanding debate about longstanding at least for these five weeks.”

As to, you know, what really is the point for some of these initiatives? Is it to change behavior? Is it to reset the entire system? Is it a higher system, particularly with his threat about reciprocal tariffs across the board? I mean, could this be an entire reconstruction of the US tariff schedule as we call it? Or is it revenue? And I think one depends who you ask, two, it depends on the day, or maybe even the minute.

And three, some of those goals are shared by, you know, even in a bipartisan way, right, by members of Congress. And we'll come back to Congress as well. So I think for all those reasons, IEPA is attractive, and perhaps there's some feeling that it's also insulated from judicial review if it comes to that. Just to note that, you know, Scott, you and I wrote a post as well back in 2019 when he first threatened to use IEPA for tariffs on products from Mexico. And that got walked back. And so you're very first question the top of our time together. What's different now is that there's no one holding him back from using these tools, as there might have been or at least those people haven't gotten into their offices yet.

So so that I think is a notable departure that we did see this the threat of this before, but just like we thought we might see two, three, two tariffs on cars. And again, now sort of everything's on the table in a way that wasn't before, and so just have to see how it all plays. For example, with HBO Max, a streamer, like Game of Thrones and Night of the Seven Kingdoms, Superman and many more. Up yet, HBO Max. Even when the stars begin from the car from Blackout.

And in a lot of ways, while we're going to see probably more tariffs rolled out, then the next thing we're going to start seeing in the next few weeks, to the extent we haven't already is talk of legal challenges.

“Maybe people in Congress will say this is gone far enough.”

This pendulum will swing back to some extent eventually, who knows what effect it will have.

So let's start with that question of insulation from judicial review raised Kathleen, I'll put this to you first.

Peter, I definitely want to hear your thoughts as well. Where is the judicial risk here? I mean, I eat methods are litigated when they impact US citizens, right? We saw a ton of I eat a really litigation ten years after 9/11 about sanctioning mostly like Islamic charities, right? Because that's where the biggest kind of universe of US national entities were targeted with sanctions. And notably Treasury kind of stopped doing it after a while in part because that litigation proved costly and annoying and they mostly won, but never like quite a hundred percent. There was pushback in various regards.

“So what is the risk here on the legal side, both for IEPA tariffs and statutory tariffs?”

And is there a possibility of saving measures? A handoff, for example, is it something that you can use IEPA for in the short term, and then shift to 232 or 301 down the road to insulate themselves traditionally?

Is there a bigger legal strategy here maybe we just haven't seen all of yet?

Well, there's a lot one one could say there. So let's let's start with the fact that as you point out there have not been there's one case has been filed against the China tear of these particular recent China tariffs. And but we haven't seen yet right and out pouring of cases. We can speculate why that might be let let let let me give you a couple possible reasons. One is not a lot of willing plaintiffs who want to raise their hand at a time of uncertainty at a time of change. And of course many of these tariffs haven't come into force. Yeah, I'm coming to effect right we just have the the one set and so there's a little bit of a wait and see there's secondly the fact and grabs more importantly the fact that the government almost always wins these cases.

Whether we're talking about the three digits or whether we're talking about even IEPA to the extent that IEPA challenges have been brought on other areas right as as many listeners know those are mostly failed or they haven't changed the outcome. And the the one challenge we had back in the 70s to something that looked like an IEPA tariff right was also not successful so so not a great track record here now now why is that well my colleague to my and I have ever written about this it's multi faceted but one particularly strong point is the the domination of security related arguments by the justice department on behalf of the executive branch across these cases that courts have accepted.

That is the sort of association of these tariff moves with broader forms of executive authority is sort of constitutionalization of the tariff power in a way that.

Tim and I don't think was intended of course by the Constitution or intended by Congress so so whether we're talking about the the difficulties of the text themselves are trying to win under these these statutes and particularly for IEPA or whether we're talking about the arguments that the executive branch has brought throughout the Biden administration I will add and defending these tariffs. In both instances across both reasons the government tends tends to win so so that's true when we're talking largely about this sort of heart of what's going on.

The places where companies have been successful and we're talking these are importers right for the most part who are challenging these things is with respect to procedural missteps so procedural missteps or nuances or novelties right how the agencies are actually carrying out this work. That has been a place where companies have tried and in some had some success right in pushing back where the courts have said no you know you got to follow the letter the law and you haven't followed it here agency X.

So bottom line I think it will we see cases Peter thought we would probably will if these come to pass and that may be the case but is a lot is going to turn on what part of the law is used what part of the presence action the importer challenges on what grounds and in what court. So a lot of different choices here for lawyers and plaintiffs in trying to navigate their legal strategies when the time comes. Let me just add to what Kathleen said that I very much agree we are seeing. Companies you know potential potential plaintiffs at least sort of big potential plant if you know big importers the trade associations that have a lot of big importers as members.

“I think just based on sort of my informal discussions with some of these guys that.”

They understand the challenges they will face in bringing legal challenge and as a result they want to wait and buy and large until they see the strongest possible case and that's why I think.

Procedural perspective and also just for my kind of the you know atmospheric of what's going to influence the judge kind of outside the you know.

For for corners of the brief itself that you want to make sure you have your strongest case so I'm not surprised we're seeing companies wait here by and large wait here.

“That said you know if these tariffs do come in as much as Trump has threatened them the economic stakes are going to be quite high for a bunch of companies and I think.”

They will ultimately bring various challenges even with in some cases some of hell battles because the economic stakes are just going to be such that the the the pressure to do so is going to be quite high. In discussing push backs as well I think we have to bring in the international dimension as well because of course the United States played an instrumental role in setting up a global treaty architecture. And it set of institutions that for a long time was intended to push back against the arbitrary imposition of trade barriers among states that had joined this architecture.

It's put it under somewhere between assault and neglect for a long time in a lot of ways. But to what extent are we seeing that architecture even coming into play here Kathleen like do we expect any sort of push back to come from that or is it at a state now or that's just not a consideration that it really is entering into the calculus because frankly it's not one that gets a lot of. Public considerations are in their public discussion.

“That's that's true that's true so I mean three different responses I think primarily from foreign governments.”

Let's start with the first one that you teed up that is the potential for using that international architecture to push back. Primarily could they bring a dispute settlement proceeding right basically could they sue us to put it colloquially at the WTO.

And in the answer is yes and China has already February fifth I launched a we call it request for consultations to begin proceedings there.

Now where will that go well it's that's a difficult conversation to have these days for trade lawyers because we know that the world trade organizations dispute settlement mechanism is not working as perhaps originally intended one might say in that there is no a pellet body.

“So cases actually cannot go to completion because there are no members there in the United States is responsible for for for that situation.”

So that in a way it's almost symbolic right that what China has done there is that yes and and probably the US trader presented office will defend the case right as they do for all. Case is brought against the United States in the WTO but will it actually lead to to an outcome well if they can't complete the process is the long and short of it. But we thought Canada and Mexico you know also threatened to do bring WTO proceedings because these governments want to show that the system is still there right they want to assert that even if they know they can't reach the final stage.

They also talked about Canada and Mexico said they would bring proceedings under the US MCA the replacement for the for the NAFTA North American Free Trade Agreement that of course President Trump negotiated. So so in that instance if they work to come to pass those tariffs on products from Canada and Mexico maybe we'll see proceedings under the US MCA those do not have the suffer from the same problem that the WTO has there is no a pellet body there and that's how it's by design.

So so you could have an outcome so that's the first possibility is that would they use these things and answer is yes China already has and would we see more probably yes.

Second possibility is retaliation again we've already seen that right threats from Canada and Mexico and China has indeed retaliated. And I think what what some people have thought is kind of a soft touch way but who knows there may be more on the way depending how this goes and the third thing I would add is the deals right again we we've kind of referred to deals a little bit and how much the president likes deals. They can't in Mexico we're able to negotiate this suspension that's sort of a deal in itself but we might expect to see more of those as we did in his first term. What cannot these sort of friends and family plan get these these governments that the president's willing to to negotiate on so we'll have to watch across all three areas and and then some.

So this question of retaliation and response obviously does play out on the international plane a Peter I want to ask you. I want to pull in the other major actor here and that is of course the corporations that are going to be affected at least in the first instance by a lot of these policies that are going to feel the pinch of these additional additional taxes.

Just by echoing what Kathleen said on foreign retaliation I think you know when US tariffs come in we will definitely see foreign retaliation as Kathleen said we're already seeing it with China they have retaliatory actions in place and you know whether it was Canada and Mexico or European Union you know America's big trading partners pretty much all said that if the US in fact imposes these tariffs there will be retaliation in fact I think we'll probably see European Union. Retaliation on the steel and aluminum tariffs very shortly the steel and aluminum tariffs scheduled to come into place on March 12th the Europeans had retaliation on the first round of steel and aluminum tariffs back in 2018 that's going to come back potentially with some modifications so it was it we're definitely going to see retaliation you know most governments when they're thinking about retaliation I think are are looking to retaliate kind of in a.

“Proportional sort of way I think most governments are not currently looking to escalate the fight with the Trump administration but they do need to show they feel they need to show the Trump administration you you hit us will hit you back.”

What's going to and and traditionally and I think this will be a lot of retaliation.

And traditionally countries of retaliated and so is Trump's first term and other trade disputes you know the retaliate against politically sensitive sectors during the first term European retaliation on on the steel and aluminum tariffs included tariffs on you know bourbon whiskey because they were trying to get it Mitch McConnell who was then you know Senate majority leader and from Kentucky and they retaliating it's hardly Davidson motor cycles because then speaker. Ryan's district was either included or was adjacent to you know hardly David since headquarters and I think you'll see some of that you know how do they find Republican leaning states Republican leaning.

“Constituencies to retaliate against the other thing that's going to be interesting and you're seeing foreign leaders talk about this quite directly.”

It is targeting particular people and firms that they see as close to president Trump so for example a Canadian political leadership has fought quite directly about going after Tesla.

As a way of of going after Elon Musk who obviously is playing a major role in the administration the interesting to see how they. Whether and how countries may engage in some of this more like personally oriented retaliation as opposed to just politically politically sensitive retaliation.

The other thing I want to pick up on Scott is you know we're talking about other stakeholders here and I would like to think Congress is going to be a stakeholder here.

I mean it's been kind of remarkable to see how supine Congress has been on the early Trump trade moves. I mean you've seen a little bit of criticism and a little bit of worry for example out of farm state lawmakers. You know retaliation often falls on US ag exports and this could be bad for them, but you know so far most members of Congress whether Democrat or Republican have held their fire to a substantial degree. But it's actually kind of hard legally for Congress to do things because actually take these powers away from Trump would require passing legislation presumably over a presidential veto but but they haven't even begun kind of really gearing up and I think it will be interesting to see.

“But as the cost of these tariffs rise we begin to see you know Congress get more seriously engaged in this fight on your question about companies Scott I think a lot of companies are kind of waiting to see what actually happens here.”

I mean the uncertainty actually makes it quite challenging because if you are a rational self interested company and you think there's going to be a deal to be had in a couple of months. I think it was actually probably just to you know sit you know sitting your hands and like pay the tariffs for a couple of months and hope this goes away. Since you don't really know what countries are going to be hit at what rates currently it's hard to know whether long term you want to re-shore production or not.

I mean you know I sort of think about you know electronic devices for example right like if you are there ever going to see. Probably just cheaper to pay the tariff than to actually ensure that production right you know because like the cost differential US is actually more than five or ten percent what a difference beyond what it would be in in Vietnam on the other hand it's some rate that obviously becomes. Actually advantage is to re-onshore production but you don't yet know what that rate is should you know move it from Vietnam to Mexico like it's just a little too chaotic I think right now for most companies to engage in that kind of kind of planning.

And back to what we were saying before to how is this different from the first term actually it's kind of similar post COVID you know now in this in this Europe were prepared for war were prepared for disease were prepared for port strikes were prepared for tariffs we right so so those that are able to perhaps see this some of them see this as you know it's part of the normal calculus of doing business now of course that's not true for some smaller businesses.

But at least for some of the bigger ones they're doing that they're they're also obviously lobbying on the back end and ways that we cannot see and they're running campaigns.

I've received I don't know if you all have messages from some of the companies from which I regularly buy saying letting you know our prices are going up and here's why. And so the consumer is now increasingly informed and that's one way to do it but we saw the market crash of course just before the the Canada Mexico.

The suspension announcement was was made and so there was some thinking about well you know is there going to be response and from the market and that's going to change how things happen so.

The best example might be the also the de minimus announcement which without getting into the details of this right some may recall that at the when these tariffs on products from China were announced. The expectation that it was that it would apply to every shipment no matter how big or small. And of course we all know that because of e-commerce so much comes in now very small amounts valid very small amounts and value and those are normally not subject to as much paperwork right as as bigger shipments but but the implementation.

Actually managing that on the side of the executive branch for customs to actually be able to process that for the US postal service to process these things it was so overwhelming so so I raised that because either between forces sort of outside everyone's control or the actual day to day disruption that this is causing. Those might be some of the bigger push factors here on on change right as a sort of flash point to look for going forward part of is the difficulties of implementation it was the difficulties of implementation and part that led to the set up of an exemption or exclusion process for some of the tariffs in the first in the first term again the president said we're not doing that this round but maybe there will be just enough pressure to say hey you know we don't have the staff at customs customs is running a staff shortage.

And actually do what you want to do Mr. President and so we have to make adjustments in certain places in certain ways to either you know keep industry going keep the the wheels of the economy turning on that might make a difference.

“Secondly on on congress just to say certainly congress is where I think most action should be at this stage as we said courts are are just too slow and it's not it's not working over there as well as I think people had hoped.”

And I think there is a lot of interest among members certain members of congress to do something the question is what and how.

I think there are many members of congress who have for many years said we're not comfortable with this level of delegation but to get the political capital that's necessary to make the changes in the law. That's the struggle so whether we can do it by looking tough on China making maybe dealing with the China's WTO status that's part of the discussion now right both on the president side as well as. In congress whether we can do it by actually empowering the president to make deals in an easier way so that we avoid the tariff disruptions that might be something.

“It's just we're saying that that some of these delegations we've been talking about tariffs for the last hour but but they go beyond that and and so you know congress right now is is I think has a is a critical touch point to be able to say hey.”

We don't like what we're seeing and we don't like the direction this is going it could get a lot worse so we have to address the delegations we have to reach out to the president's energy in a particular way that we think is going to be fruitful for the country. We are just about at time but before we part I want to turn to both view for one last closing question which is that this is a fast moving topic we are only in month in to a four year presidency we're going to see a lot more action around this.

What are the big flash points you are looking for in the next few days next few weeks next from a few months as people watch this closely if listeners want to understand what the next big moves are.

“Where should they be looking Kathleen I'll start with you. I think the biggest question is whether these investigations that are all under way will lead to action and and you mentioned that those deadlines for so many of them are coming up.”

So we've got in March several we've got an April several more and so by that point we will have more of the administration officials in office right we should have a little bit more of a.

We will either see some pullback from some of these steps it may be an extension of time in other instances but if to the extent we see more more tariffs in those moments then I think the landscape is going to change very quickly.

“Awesome, thank you, Kathleen. Peter, turn over to you. I think in addition to the points Kathleen made I am watching for weather.”

We get a kind of clear thesis of how the Trump administration sees these tariffs interacting with each other and with the different goals that Trump is articulated for these tariffs.

He has talked about tariffs as a revenue source talked about tariffs as a way of rebuilding American manufacturing and having on shore and then he's talked about tariffs and we've seen him talk about tariffs is kind of a you know economic bazooka he'll point at the Canadians over fentanyl.

“You can kind of conceptually see how you might fit that together into coherent story but we haven't yet actually seen the Trump administration do so what we've seen them do is kind of a lot of.”

You know seemingly piecemeal moves against different countries of kind of opportunistic and driven by you know the president sort of week to week priorities and events and so what I'm really looking for is do we as the team settles in us Kathleen says as the team settles in do we see these actions kind of emerge into a. You know coherent theory or is this ultimately just going to be kind of a whole bunch of either you know country by country actions and or deals that that that'll just kind of be out there for a while without really lattering up into a coherent vision.

“Well we'll have to all keep our eyes peeled on what developments are coming down the road as I'm sure there are some until then we are out of time Peter and Kathleen thank you for doing us here today on the welfare podcast.”

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