The two biggest stories of the week, as I see it, are the effects of demanding reciprocity in barriers to trade and the Supreme Court putting the leash on out-of-whack federal district court judges.
It’s my personal belief that the strongest nations have a large, productive middle class. In recent decades, domestic fiscal profligacy and unfair international trade practices have hollowed out countless working-class communities, emptied middle-class pockets, and steadily eroded middle-class lives. Both the Administration’s ordering of reciprocal tariffs and cutting wasteful and corrupt use of tax revenues seem to me an effort to return these people and communities to once-commonplace normal, decent, and dignified living. Both efforts have substantial national security benefits as well.
I’m not sure how the reciprocal tariff policies will be administered. I believe nations individually will negotiate the exact terms. Argentina has already agreed with the President that neither country will impose any tariffs on products from the other. Vietnam has sought an appointment to negotiate terms with us, as have, according to the President, many other nations. Yes, there’s been some tough talk by leaders of countries who have benefited from the present system, but the U.S. is the largest consumer market in the world, which is the most significant bargaining chip. We have also been very generous donors and lenders. French President Emmanuel Macron yapped that French companies should stop investing here. Ric Grenell, presidential envoy for special missions, responds that we should cancel the $5 billion loan we made to France’s TotalEnergies African LNG project.
China announced a 34% tariff on U.S. imports. ZeroHedge examines the consequences if China follows through on this threat:
“China has three options: 1. Concede defeat to whatever terms Trump demands 2. Devalue the yuan by 20-40% 3. Unleash biggest fiscal stimulus in its history (talking $2-3 trillion) which will push its debt off the chart.”
It’s not just U.S. treasure involved. There are, after all, as Hugh Hewitt observes, national security implications of outsourcing so much manufacturing overseas.
“Donald Trump triggers race to offer US concessions before tariffs hit
Nations prepare offers to Washington including weapons deals, dropping their own tariffs and moves against China”
I’ve said a hundred times I have no idea if this will work out and that those of us raised on free trade theory have to put aside our instincts for a while to see if in fact the U.S. emerges on the other side stronger and more prepared for Cold War 2.0 which we are in. POTUS is forcing the world to choose: Does it want the U.S. to continue as its leader? If so, it cannot continue to treat it has the rich relation that can afford to cover their costs on matters like defense. It’s not 1947 with the Marshall Plan or 1991 after the U.S.S.R. fell. It is the era of U.S.-China face off. All analysis should begin with that framing because that is the fundamental reality of 2025.
Many friends like @DavidBahnsen hate the tariffs. They have said so many times and have explained why many times. But some of the fiercest critics (not David) won’t admit the national security envelope in which the program rests. Almost everyone in the U.S. was wrong about the CCP and the course China would take after admission to the WTO. That’s the baseline awful decision that should be admitted by every critic before they take off on the tariffs. Re-shoring production of almost everything is the necessary but not sufficient step to secure a future for those under 10. If we don’t, China will simply displace the U.S. instead of oppose it as the only other super-power.
(When we were forced to enter World War II, we faced a substantial deficit of military equipment, but we then had steel plants, auto plants, shipbuilders, aircraft factories, and such to remedy that.)
opposition to the notion of reciprocal tariffs, which I don’t recall seeing when Nancy Pelosi, Bernie Sanders, and Barack Obama called for them.
The early Wall Street response was a dip, particularly of FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks, that is, the high-tech stocks that are considered most overvalued in any event. Yet leaders of those companies already anticipated this and are making substantial domestic investments.
Most of the other FAANG+ companies announced plans to soon spend multiple billions in the US. Amazon, Microsoft, Open AI, Oracle, Softbank, and Meta — together they announced last week over a trillion dollars in new domestic investment.
So… Trump’s tariff plan started working well before he announced it on Liberation Day. The FAANG+ tech leaders were already moving back toward more familiar shores. The hit would have been much worse if these moves weren’t already on the record.
Disruptions are inevitable. But this isn’t trade war fallout. It is supply chain triage. It’s not protectionism. It’s industrial self-defense. And it’s already rebuilding America. In other words, FAANG+ didn’t flee from tariffs: They ran home.
The useless, flatlined media is decrying Trump’s moves as reckless, ill-advised, and poorly thought-out, like he just dreamed it all up Monday after eating a bad taco, but the truth (as usual) is the exact opposite.
In context, the FAANG+ adjustment was not only long overdue, but it’s painfully clear it was fully expected and carefully planned for. The plan was already in motion.
Trump vs. the Courts
Last week, among other things, I discussed the case where a lower court issued a nationwide order requiring the Department of Education to reinstate $65 million in various education grants, which included Diversity, Equity, and Inclusion (DEI) initiatives, which this Administration rejects. The First Circuit Court of Appeals refused to stay the order but fast-tracked the appeal. The Administration argued that unless the Supreme Court intervened, ”federal courts around the country will continue to exceed their powers by ordering the Executive Branch to restore lawfully terminated grants across the government, keep paying for programs that the Executive Branch views as inconsistent with the interests of the United States, and send out the door taxpayer money that may never be clawed back.” By a 5-4 decision, the Court agreed to stay the lower court order, finding that while the order was called a temporary restraining order, it was, in fact, a preliminary injunction in disguise, upon which the higher court had jurisdiction to rule. It noted the obvious: Once the money is paid out, even if the government ultimately wins on the merits, it’s unlikely to get the money back.
Professor Margot Cleveland observes that there are multiple other lower court cases involving payment of grants as to which this ruling should be determinative, and the same reasoning should apply to cases challenging the firing of employees and officers.
As I predicted last week, we are nearing the final lawfare battle. Bill Shipley says there are now five justices who have signaled their opposition to such overreaching lawfare:
1. There is likely now a sentiment among at least 5 Justices that the lawfare via TRO/Injunction from liberal/progressive district judges has reached a dangerous level, and some signals need to be sent not just to the district judges but also the Appeals Courts who should be issuing stays on these TROs and Injunctions. The Order clears the way for TROs to be treated as de facto injunctions which are appealable. Currently activist district judges are compelling compliance with TROs — which they can extend beyond the initial 14 days — while Appeals Courts stand idly by on the basis that TROs are not “final orders” subject to appeal.
2. There is language in the Order that suggests at least 5 votes now exist for the proposition that some significant amount of the ongoing litigation over new Administration policies regarding cancelling grants, contracts, and other spending cuts, needs to be filed in the Court of Claims. This should now form a solid foundation for Circuit Court decisions that a substantial number of the district judges issuing TROs and Injunctions are without jurisdictional authority to do so.
3. The district judges need to take seriously the requirement under the Federal Rules of Civil Procedure that meaningful financial bonds be posted to protect the Government from financial losses should it win these cases after being forced to pay out money while the cases are pending.
4. Justice Barrett could have written a concurring Opinion but did not. If she didn’t agree with “1”, “2”, and “3” above, she could have made that clear in such a concurrence. Given that she did not, I think it is a fair supposition that she agreed with all 3. That is very significant on Point 2 regarding some significant number of these cases belonging in the Court of Claims, thereby taking jurisdiction away from the activist district judges with regard to how the Government spends taxpayer money.
The Administration already seems to have the upper hand in the litigation over terminating Executive Branch Officers in order to bring “independent” offices and agencies under greater Executive control. It should win the dispute over terminating large numbers of federal employees, but it might need to back up a step or two and ensure it is complying with statutes that apply to “Reductions In Force” — RIFs — of the federal workforce. The losses in district court on that issue have not involved whether federal workers can be let go, they have involved whether the Administration is following the steps created by Congress for how such reductions must be carried out.
Getting favorable outcomes — or at least getting the cases away from activist district judges — on the disputes over reducing Government spending would be a huge win in two respects. First, the goal of reducing the budget deficit in some meaningful manner would be advanced. Second, we now know that all manner of progressive/Marxist NGO funding was routed from various Government agencies and programs for the purpose of advancing the progressive/Marxist ideology and keeping the activist groups swimming in cash.
That’s not to say there aren’t still some wild rulings in the pipeline, but the opposition’s supply train (USAID, NGOs, big law firms acting as Democrat party arms) has taken big hits and, this week, the administration’s offensive team has penetrated the enemy line. In the meantime, one wag suggests the courts should get together and make up a list of what, if anything, they think the Executive has legal authority to do.
Jesus Christ is King
Comments are closed.