President Trump’s plan to provide $2,000 rebate checks to Americans, funded by tariff revenue, is projected to cost $600 billion annually. This cost is double the estimated $300 billion in yearly revenue generated by the new tariffs. The Committee for a Responsible Federal Budget, a nonpartisan group, released these projections, which would increase deficits by $6 trillion over a decade if the checks were distributed annually. Furthermore, this plan faces potential obstacles, including a Supreme Court case that could invalidate the tariffs, and any distribution of these checks would require Congressional approval.
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Former President Trump took to social media late Monday night, warning the Supreme Court of a catastrophic financial “drubbing” exceeding $3 trillion if it were to strike down his tariffs on imports. He claimed these tariffs were responsible for triggering trillions in U.S. manufacturing investments and described their potential demise as a national security event, which would be “non-sustainable”. Trump’s post contradicted the legal arguments made by the Solicitor General, who attempted to downplay the revenue-generating aspect of the tariffs, which are ultimately paid by American businesses and consumers.
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On Sunday, former President Trump announced a plan to distribute at least $2,000 to every American, excluding high-income individuals, using funds generated from tariff revenue. This proposal, likely requiring Congressional approval, mirrors a similar bill introduced by Senator Josh Hawley earlier this year for $600 rebates. However, the Treasury Department has previously indicated a priority of using tariff revenue to reduce the national debt, which currently stands at $38.12 trillion. Despite the conflicting goals, tariff duties collected through the first three quarters of the year reached $195 billion, although consumers currently face an effective tariff rate of 18%, the highest since 1934.
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In a recent Truth Social post, former President Trump expressed his frustration with the Supreme Court, particularly justices he appointed, who are questioning the legality of his tariffs. The Supreme Court is currently reviewing arguments concerning Trump’s authority to impose tariffs without congressional approval, and the justices have expressed skepticism regarding his legal justifications. Trump, who has utilized the International Emergency Economic Powers Act (IEEPA) to bypass Congress, faces potential legal challenges, as the court’s decision could lead to a significant refund of tariff revenue. In addition to his tariff concerns, Trump also urged Republican senators to eliminate the filibuster to expedite the budget process and reopen the government.
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In a recent Truth Social post, former President Donald Trump promised most Americans a $2,000 dividend as part of his promotion of tariffs. While the specifics of the payment, including its timing and eligibility, were not immediately clear, the announcement followed Trump’s attendance at a lavish dinner. Trump’s claims about affordability were met with criticism, particularly in light of a recent elections in which Democrats focused on the cost of living. The former president, however, dismissed the Democrats’ focus on affordability, calling it a “con job.”
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The Supreme Court hearing regarding the Trump administration’s tariffs was heavily criticized, with six justices expressing strong disapproval of the Justice Department’s defense. Observers noted the court’s apparent frustration with the government’s arguments, suggesting a swift and decisive ruling could have been made. Mark Joseph Stern of Slate highlighted the anticipation surrounding the court’s stance on presidential power, suggesting a dislike of taxes may have influenced their decision.
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The Supreme Court heard arguments challenging Donald Trump’s use of emergency powers to impose tariffs, and the justices expressed significant skepticism towards the administration’s arguments. Conservative justices, including Chief Justice Roberts, questioned the scope of the president’s authority in this context, particularly concerning the power of Congress over tariffs. This potential ruling could be a major check on the Trump administration’s policies, especially considering the court has previously accommodated his policies. Two possible explanations for this potential shift include a wariness of presidential interference in the economy and a desire to preserve the major questions doctrine for future use, possibly against future Democratic administrations. This may also be the Court attempting to preserve their legitimacy.
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Texas Governor Greg Abbott posted on X that he would impose a 100% tariff on New Yorkers moving to Texas if Democrat Zohran Mamdani, the frontrunner, is elected mayor. This statement was made on the eve of the New York City mayoral election and appears to be a response to concerns about New Yorkers leaving the city. Legally, such a tariff would be unconstitutional because states cannot impose tariffs on other states, and the right to travel and become a resident of another state is protected. The post garnered reactions ranging from criticism, acceptance, and uncertainty over whether it was a joke.
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President Trump announced that the United States and Canada would not be restarting trade talks following an apology from Canadian Prime Minister Mark Carney. The apology was made in response to an Ontario political advertisement featuring former President Ronald Reagan criticizing tariffs. Trump considered the advertisement to be inaccurate, and had previously paused negotiations and increased tariffs on Canada due to the ad. The advertisement used a quote from Reagan, a known supporter of free trade, to warn against tariffs.
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Bank of America analysts assert that President Trump’s tariffs have undeniably increased consumer inflation. They estimate tariffs account for 30 to 50 basis points of the core personal consumption expenditure inflation rate. Furthermore, the analysts suggest that consumers have absorbed approximately 50 to 70% of the overall tariff costs. This indicates that tariffs could continue to drive inflation upward in the coming months.
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John Q. Hosedrinker