00:00This is just a tremendous day. A huge win for the Constitution, for folks who cover tax policy,
00:08for anybody who remembers the Revolutionary War. We fought against specifically a taxation power
00:14that Congress did not have any say over. So this is, in my opinion, the largest and most impactful
00:20macroeconomic ruling the courts have ever delivered. So just a tremendous day. It is in
00:26line with what the market was expecting. You can see that investors were very prepared to rip the
00:31retail stocks, everybody who's been exposed to the 40 percent trans-shipping tariffs, the ad hoc 50
00:37percent tariffs on Brazil, the wide-ranging threats of 200 percent tariffs on French wine that have just
00:46been spewing out of the White House for 12 months now. So it's really an exhilarating day, an incredible
00:52day for the Constitution, in my opinion. Henrietta, is this, do you think, emboldened any of President
00:57Trump's adversaries, whether in Congress or just within Washington, D.C., apparatus, that maybe
01:03this gives them a little bit more confidence to push back? Is there any reason to believe that?
01:07Absolutely. I think there's two ways to look at this. First of all, this is exceptional news for
01:11President Trump. Americans hate the tariffs. They know their taxes. They know that they're driving
01:16inflation and they don't like them. So now that that authority has been stripped away from him,
01:21the president no longer has to collect these taxes. It's up to him to decide whether he wants
01:25to migrate into new and different authorities, like Section 122, that give him the ability to
01:31impose tariffs at a 15 percent rate for the next five months. If he wants to do that, he can
01:36go ahead
01:36on. But the American public will be very grateful that the Supreme Court struck these tariffs down and
01:42even more grateful if he keeps them off. So that's one way of looking at it. And Republicans on Capitol
01:47Hill are staring down the barrel of a very ugly affordability narrative election cycle, where we've
01:53seen races as diverse as Texas swing 31 points away from President Trump just since he was elected.
02:01Those are tremendous losses for the Republican conference, and most of it is driven by the
02:06president's handling of the U.S. economy. It's influenced not just the traditional independent
02:11voter that we are always concerned with, but also with young male and Hispanic voters who have driven
02:17the president to his second term. So a lot to see here. A lot to see here. And it's not
02:23just
02:23American stocks that are benefiting. I'm looking at, for instance, LVMH, Hennessey in Europe climbing
02:29on the news up 4.4 percent in European trading. So companies that rely on exports to the U.S.
02:35also
02:35benefiting from this ruling. Paul asks a really important question, Henrietta. Basic.
02:40It's very basic. Are tariffs rolled back starting today?
02:44They are illegal. So at Border Patrol, one of the things that's questionable here is that the White
02:49House has said all these trade deals are still going to be intact. You know, we've signed these
02:53agreements. That is null and void. Now, if you are an importer and you are at Customs and Border Patrol,
02:59you no longer will suffer paying for these tariffs. The Supreme Court has told Customs and Border Patrol
03:04they can no longer collect them. So this is a problem that the White House is going to have to
03:09address.
03:09They have a number of trade deals that they have signed. I believe there's about eight
03:13at this point. And many of them include a reciprocal tariff of 10 percent in the case of
03:18the U.K. or 19 percent in the case of Indonesia. Those tariffs are illegal. The Supreme Court has
03:24told the Customs and Border Patrol people this authority is not permitted. So it's the importers
03:30who are going to rise up and say, I'm not paying. It doesn't matter what the country is,
03:35you know, independently decide or whatever the White House says.
03:37So what do we expect this administration? How do you expect the president and administration
03:42to respond to it? Do you think they will aggressively try to work other tariff routes or maybe just let
03:48this issue die and just fade away? I appreciate the question, Paul. I am widely, wildly out of
03:55consensus on this. But what I just described on Section 122 is just one of the many alternates
04:01and alternatives that the president has. Section 301, which is, you know, $350 billion worth of
04:07tariffs on China. We could re-up that and apply it to the EU, the U.K. or Brazil. All
04:11of those
04:12have been threatened. But think about what functionally that means. It means that individual
04:16businesses will have to go out again, get their trade lawyers on the payroll to comply with brand
04:23new, potentially even unused authorities that they'll have to comply with. Once again,
04:28is it a 15 percent tariff rate under Section 122? Does it exist now? When's the president going to
04:33put it on? What do I need to worry about with the national security tariff? The confusion and the
04:38uncertainty, which were the buzzwords following Liberation Day in April, are going to come roaring
04:43back in the event the president decides to migrate away from IEPA and move into new and different
04:48authorities. I think it would be extraordinarily disruptive. And again, with my eye on the election
04:53cycle and then affordability narrative, the president, I think, is already on a very tight
04:58leash and he's not going to have the leeway to fully reimpose anywhere near the revenue that has
05:05been collected by IEPA so far. So I don't think these tariffs will ever come back at their current
05:09level. And I think they will be much more restrained going forward.
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