Supreme Court Strikes Down Trump Tariffs as $8.2B in Cargo Hangs

[00:00] Daniel Brooks: From Neural Newscast, this is Buzz, tracking what's trending and why it matters. [00:09] Margaret Ellis: From Neural Newscast, I'm Margaret Ellis. [00:13] Margaret Ellis: And I'm Daniel Brooks. [00:14] Margaret Ellis: We are looking at a historic shift in U.S. trade policy following a massive Supreme Court ruling this past Friday. [00:21] Margaret Ellis: The high court struck down the sweeping global tariffs that have defined the current administration's economic agenda, [00:27] Margaret Ellis: voting six to three that the president exceeded his constitutional authority. [00:33] Margaret Ellis: This case really hits at the core of operational drift in the executive branch. [00:37] Margaret Ellis: Chief Justice John Roberts wrote for the majority that the framers did not vest any part of the taxing power in the executive branch. [00:45] Margaret Ellis: For years, the administration relied on the 1977 International Emergency Economic Powers Act [00:51] Margaret Ellis: or IEEPA, to bypass Congress. [00:56] Margaret Ellis: My research into the historical record shows that while previous presidents used IEPA for sanctions, [01:02] Margaret Ellis: no one had ever attempted to use it for broad, unilateral tariffs until now. [01:08] Margaret Ellis: Roberts pointed out that the very lack of precedent was strong evidence that the power simply didn't exist in that statute. [01:15] Margaret Ellis: The immediate impact on the ground is where things get complicated. [01:19] Margaret Ellis: Even though the ruling came down Friday, U.S. ports are still in a state of suspended animation. [01:25] Margaret Ellis: U.S. Customs and Border Protection hasn't updated the Cargo System Management Service yet. [01:31] Margaret Ellis: That means importers are still seeing the old tariff requirements when they try to clear their goods. [01:36] Margaret Ellis: According to data from Vision, roughly 211,000 containers carrying over $8 billion in goods [01:43] Margaret Ellis: arrived between Friday and Sunday. [01:46] Margaret Ellis: All of those entries are still being flagged for IEEPA tariffs that the Supreme Court just [01:51] Margaret Ellis: declared illegal. [01:52] Margaret Ellis: It creates a massive paperwork nightmare for brokers. [01:56] Margaret Ellis: Daniel, you mentioned the Cargo System Management Service, and we're hearing from customs brokers [02:00] Margaret Ellis: like Lori Mullins that they [02:01] Margaret Ellis: that they have to keep reporting these codes just to get the goods released. [02:06] Margaret Ellis: There's a 10-day window to pay these duties. [02:08] Margaret Ellis: If the systems aren't updated by then, importers have to pay the money [02:12] Margaret Ellis: and then file for a refund later. [02:14] Margaret Ellis: It's essentially forced interest-free loans to the government for taxes that shouldn't exist. [02:20] Margaret Ellis: Wild. [02:21] Margaret Ellis: And that refund process is the $100 billion question. [02:24] Margaret Ellis: The Treasury has collected more than $133 billion from these import taxes since they began. [02:32] Margaret Ellis: Justice Brett Kavanaugh, who dissented, actually noted that returning this money is going to be a mess. [02:37] Margaret Ellis: We are already seeing companies like Costco lining up in lower courts to demand their money back. [02:43] Margaret Ellis: If the government has to return $133 billion, it creates a significant hole in the federal [02:49] Margaret Ellis: budget that no one was planning for this morning. [02:52] Margaret Ellis: The response from the White House has been incredibly sharp. [02:55] Margaret Ellis: President Trump called the justices disloyal to the Constitution and even referred to some [03:00] Margaret Ellis: as lapdogs. [03:02] Margaret Ellis: But he isn't backing down on the policy itself. [03:04] Margaret Ellis: He's already announced he'll sign an executive order to impose a new 10% global tariff [03:10] Margaret Ellis: under Section 122. [03:11] Margaret Ellis: This is a different legal mechanism that allows for tariffs during a balance of payments emergency, but it's restricted to 150 days. [03:20] Margaret Ellis: It feels like a tactical pivot to keep the pressure on while the administration looks for other legal avenues. [03:25] Margaret Ellis: It's a temporary fix at best, Margaret. [03:28] Margaret Ellis: Section 122 has never been used to apply a broad global tariff like this either, so we might just be heading back to court in a few months. [03:37] Margaret Ellis: Meanwhile, international partners are watching closely. [03:40] Margaret Ellis: The European Commission is already seeking clarity on what happens next. [03:44] Margaret Ellis: The uncertainty is the biggest problem for urban policy and local supply chains. [03:49] Margaret Ellis: When the price of basic materials is in legal limbo, it's impossible for developers or city planners to finalize costs for housing or infrastructure projects. [03:59] Margaret Ellis: Um, [04:00] Margaret Ellis: The Supreme Court essentially told the administration that if they want to remake global trade, they have to go through Congress. [04:07] Margaret Ellis: It's a return to a more traditional interpretation of the separation of powers, but it comes at a moment when the executive branch has grown used to moving much faster than the legislature. [04:17] Margaret Ellis: We'll be watching the Treasury data closely to see how quickly those refund filings start hitting the dockets. [04:23] Margaret Ellis: The scale of the corrections alone could take months to process through the automated commercial environment system. [04:30] Margaret Ellis: For now, the ports of Los Angeles and Long Beach are the front lines of this legal battle. [04:35] Margaret Ellis: From Neural Newscast, I'm Daniel Brooks. [04:37] Margaret Ellis: And I'm Margaret Ellis. [04:40] Margaret Ellis: Thank you for joining us on this Monday, February 23rd. [04:46] Margaret Ellis: Neural Newscast is AI-assisted, human-reviewed. [04:52] Margaret Ellis: View our AI Transparency Policy at neuralnewscast.com. [04:59] Daniel Brooks: This has been Buzz on Neural Newscast, tracking what's trending and why it matters.