This article is protected by copyright © 2024 Fortune Media IP Limited. Use is governed by their Terms of Use and Privacy Policy. The FORTUNE trademark is registered in the U.S. and elsewhere. Note that compensation may be received for certain product links, and offers are subject to change.
The administration is exploring sector-specific tariffs on imports deemed critical to national security, aiming to bolster domestic industries like military supplies, medical equipment, and energy production. This approach, unlike a previously proposed blanket tariff on imports from Canada, Mexico, and China, is considered potentially more palatable. Targeted tariffs are intended to incentivize domestic production and strengthen key sectors. While details on specific targeted imports remain unclear, this strategy represents a shift from the broader tariff proposals previously discussed.
While President-elect Trump’s proposed tariffs are unwise, they are not unconstitutional, as federal law grants the president significant power to impose them. The Supreme Court, however, has established a “major questions doctrine” that allows it to veto executive branch actions deemed too ambitious. Given the Court’s recent history of using this doctrine to strike down Biden administration policies, it remains unclear whether they will apply it to Trump’s tariffs, potentially setting a dangerous precedent for future presidents. The upcoming legal battle over tariffs presents a dilemma: a ruling against them would further empower an already powerful Court, while a ruling in favor would cause economic hardship for many Americans.
EU leaders, meeting in Budapest, have signed a declaration aimed at boosting the bloc’s competitiveness, driven by concerns over US protectionist trade policies and a need to address Europe’s own economic stagnation. The declaration calls for reduced bureaucracy, increased investment, easier access to capital, and higher productivity, echoing the recommendations of a report by former Italian prime minister and European Central Bank chief Mario Draghi. This report, warning of a “slow and agonising decline” for the EU, proposes radical reforms, including increased common borrowing and a “true single capital market,” to avert this fate. The summit also recognized the urgency of the situation, with leaders acknowledging the need to address both the economic challenges and the implications of the changing geopolitical landscape.
John Q. Hosedrinker