"The average American household spent an extra $1,000 this year thanks to tariffs"

 

The Supreme Court emerged from its winter recess on Friday, and the justices appear to have spent that break with pens in hand. In a 6-3 decision written by Chief Justice John Roberts, the court ruled that President Donald Trump had no authority under the International Emergency Economic Powers Act of 1977 to impose sweeping tariffs. Roberts was joined by conservative justices Amy Coney Barrett, Neil Gorsuch, and the court’s three liberal justices: Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson. The ruling totaled 170 pages, including a 63-page dissent from Justice Brett Kavanaugh, and several concurrences. As SCOTUS blog’s Amy Howe wrote after the decision, “In a part of the opinion joined by Justice Neil Gorsuch and Justice Amy Coney Barrett, Roberts said that Trump’s reliance on IEEPA to impose the tariffs violated the ‘major questions’ doctrine – the idea that if Congress wants to delegate the power to make decisions of vast economic or political significance, it must do so clearly.” While there remains some uncertainty—the justices did not address whether anyone who’d paid tariffs were due refunds, and Trump could try to implement tariffs again under different statutes—businesses across the country that rely on imported goods were undoubtedly relieved. In a piece we published Friday morning just hours before the decision, John McCormack interviewed Beth Benike, a small-business owner who’d invented the “Busy Baby Mat” to keep toddlers occupied while dining out and had been selling her product since 2019. John wrote:

Things had been looking up for Benike and her small business’s five employees—until President Donald Trump announced his “Liberation Day” tariffs on April 2, 2025. At the time, Benike had a container ready to ship from China with $160,000 of product. “My tariff was going to be like an additional $230,000 on top of that,” Benike recalled. “I would have had to come up with that money within the 30 to 45 days it takes for this stuff to get to America.” Benike could not afford the $230,000 tariff, so her product languished in China until Trump later reduced tariffs below their “Liberation Day” highs (yet still higher than they were at the start of the year). But the damage had been done: For two months, her product was out of stock. Over the past year, Benike had to cut staff from five employees to three. “I cashed in my retirement and didn’t pay myself all summer, went through all my family savings to just stay afloat,” Benike said. “I would say, conservatively, we had half a million in lost revenue because of the tariffs.”

In the weeks leading up to the ruling, a few data points had brought home how clearly Trump’s trade policy has been hurting Americans. Earlier this month, the nonpartisan Tax Foundation published a report finding that the average American household spent an extra $1,000 this year thanks to tariffs. And on February 12, the Federal Reserve Bank of New York released a study showing that, contrary to what Trump has claimed since first imposing his “Liberation Day” tariffs, that the burden of paying the tariffs has fallen almost exclusively to Americans. In Wanderland, Kevin D. Williamson noted that while Americans are paying $94 out of every $100 in tariff revenue, there are plenty of other, hidden costs to tariff policy:

A tariff that adds $10 to the price of a tire does not necessarily mean that the price of a tire in the shop goes up $10, but it may mean that there are no tire-shop employee bonuses at the end of the year, that employees are expected to take on additional work at no additional pay, or that the tire store owners decide to wait another year to have the shop painted and the parking lot resurfaced. The guy who owns the local restaurant that used to be a favorite of the tire shop manager will not be conscious of the fact that a tariff schedule is the real reason the manager takes his family to dinner there once a month instead of two or three times a month—and that the commercial painter and the guy who owns the asphalt company are not making up the difference but instead are cutting back, too—but he will notice that it is a little bit harder to come up with the money to send his kids to summer camp this year.

Trump has long claimed that the threat of tariffs has enabled him to secure pledges of foreign investment, and in a recent Wall Street Journal op-ed, he wrote, “I have successfully wielded the tariff tool to secure colossal Investments in America. …In less than one year, we have secured commitments for more than $18 trillion, a number that is unfathomable to many.” In Capitalism, Scott Lincicome agreed with one aspect of Trump’s claim—the part about the number being unfathomable— “because it’s completely—and impossibly—untrue.” Scott debunked, on a number of fronts, the notion that Trump had secured $18 trillion in foreign investment—starting with the fact that the White House itself touts only $9.6 trillion in pledges that it attributes to the “Trump Effect.” And within that $9.6 trillion, some spending is for expenses, not investment; some likely won’t happen (India’s pledge to buy more U.S. liquid natural gas); and some can’t happen (as with promises from the EU, “because government officials in these places don’t have the authority to control private firms’ purchasing decisions.) ...  -The Dispatch Weekly