00:00Vicky, welcome back. I mean, first of all, your reaction to this?
00:05A bit of a surprise, although there had been hints that this perhaps was coming.
00:08And indeed, as you've just been reporting, President Trump had said that it would be a terrible decision if that
00:15was to be the case,
00:16and that he did indeed have all sorts of other ways in which he could make up for any decision
00:21by the Supreme Court.
00:22So it's all to be awaited, really, in terms of what the real response will be.
00:27But it's interesting, you've just been discussing whether countries are going to start legal proceedings to get some of the
00:32money back,
00:33and not so much countries, but certainly companies that have been affected by this.
00:37That would take a huge amount of effort and time, and I would imagine that that isn't really going to
00:44go anywhere.
00:44But nevertheless, that would seem to be the logical conclusion of the decision made today.
00:49By the sound of it, then, we are now in pretty uncertain territory, both economically, in terms of refunds,
00:56and in terms of politics.
00:58Well, yes, and of course, once again, you know, you wonder.
01:02Obviously, the U.S. has changed the world's sort of trade rules simply by itself, by just imposing those tariffs.
01:10It would be interesting to see what the WTO says, the World Trade Organization.
01:14But yes, indeed, we are in sort of uncharted territory, because we don't know how the rule will be either
01:22accepted or even enforced.
01:23And that's not very good, because it creates all sorts of uncertainties.
01:27But what it does do, it emphasizes the point that many people have been making recently,
01:32which is that it is the consumers and the importers, the companies that have been having to absorb those tariff
01:39increases.
01:39Yes, of course, it has helped the government in terms of raising funds, because it's been quite substantial, significant.
01:46I mean, if your average tariff goes up from 2.5% as it was to about 13%, you raise
01:52quite a lot of money,
01:52despite all the changes downwards that have happened during the year.
01:56But it is quite a cost to the economy and to businesses.
02:01And it's one of the reasons why what we saw immediately happen is that, in fact, there was a positive
02:07reaction in Wall Street,
02:09because it means that perhaps in the future prices won't go up that much, and also it means hopefully faster
02:15growth.
02:16So a bad day perhaps for President Trump, but it might be rather good news for U.S. consumers.
02:22Yes, it might be, because the calculations again are that the U.S. consumer, or the average household rather,
02:27has been paying through 2025 about $1,000 more for goods than would otherwise have been the case,
02:34and the expectations were that they will be paying even more in 2026.
02:39Well, if for any reason that is reduced, but of course, remember, we still have the problem of sector-specific
02:46ones,
02:46sector-specific tariffs that can stay there and which can be argued.
02:51They are protecting sensitive and sort of high-security areas of the U.S. economy.
02:58Those will remain, and maybe they will be raised.
03:02So who knows what the actual outcome would be.
03:05But overall, if there is any resolution to this,
03:07and at least would put a stop to any more sudden changes in tariffs of the type that we have
03:14seen over the last year,
03:16that would be a positive.
03:18Very briefly, I mean, presumably it's too early to say that categorically this is the beginning of the end of
03:25tariffs then.
03:27I'm afraid so, yes.
03:28There could be other ways in which President Trump can find to still impose even higher tariffs for particular goods,
03:35and also, and I think again, as you said, may find a different ruling that allows him to do those
03:42unilateral,
03:44if you like, and more general tariffs as well across countries,
03:47in other words, covering all goods as he has done before.
03:51But I think it's one to watch.
03:52I'm afraid the outcome is very uncertain right now.
03:55Vicky, good to see you.
03:56Thanks so much for coming on the programme again.
03:57Vicky Price, The International Economist.
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