Trump Will Come Out on Top in Supreme Court Tariff Case: Analyst

Thanks to Daniel for that report. And staying with that, joining us to discuss the implications of today's Supreme Court's case is Jill Home. Homeman, deputy director of trade and economic policy at the American First Policy Institute. Thank you for joining us this morning, Jill. Is there a legal definition for a quote emergency under the 1977 International Emergency Economic Powers Act? >> Thank you for having me. And as the president has uh explained, this is um and he called it the most critical Supreme Court case ever. And as you describe um the president has declared um two emergencies. We have two crisis. The first of which is we are running a trade deficit over $1 trillion. Um it it's completely unsustainable and that means that we are um weakening our country. um we're borrowing from foreign nations, many of which are adversaries, in order to fund this consumption-driven economy. So, that's a trade deficit. The second uh crisis is um the fentanyl that's been flooding across our borders and it's become the number one killer of young adults ages 18 to 44. So as a result of these two crisis um the president has um declared an emergency on these crisis and and that gives him the authority to be able to um implement this tariffs under the provisions of AIPA and that's also what's going to be discussed at the Supreme Court case which um at AFPI we filed um a mikas brief in support of um the president having the authority and we're confident that um the president and is going to come out on top um once the Supreme Court justices hear the case today. >> And can you explain the concept of the tariffs in terms of national security which the president framed very strongly in his 60 minutes interview? >> Certainly. And so what the president done and as I had mentioned before is um by being able to implement the tariffs and he had cited the example of China um what he's doing is stemming the flow of um fentanyl and opio opioids, excuse me, across the border. And so he's been using it as a tool um in his trade negotiations and in his negotiations with these countries. And that's what we've seen actually um as of just last night um the president uh reduced an additional tariff from 20% to 10% because of um additional uh concessions that China has made in in recognizing that it needs to um play a stronger role to prohibit uh the elements that make fentanyl and opioids from coming into our country. And so the president was able to negotiate that provision and therefore was able to lower an additional tariff from 20% to 10%. Yeah. And you use the example of adversary China but even with friendly nations the US for for a very long time you know many decades has been subject to not only unrescrocal tariffs but also unrescrocal market access. Can you help describe what the economic impact that this has had on the US's economy and the livelihood for you know working Americans? >> Exactly. And and so um you know we we many people are assuming that we started from a place of reciprocal tariffs and that's just not the case as you pointed out. Um so the United States was providing unfettered access to our markets but in turn our even our trading partners were implementing um and requiring the United States companies to pay tariffs when they access uh their markets which when you say that to all Americans and most Americans they just think well that's not fair and and that's what reciprocity really is about. And as a result of um of these tariffs over the last um 12 months, now granted only a portion of um the time President Trump was in office. Um but these tariffs have generated um close to 200 uh billion dollars and and that's enough, for example, to fund um the US Army. And so these these tariffs are um generating revenue, but really they're not an end in and of itself. They're also a means in order for a president to have um the authority to go out and negotiate strong trade deals which we heard from Caroline Levit describe. And so these trade deals have provided um and and um required countries to reduce non-tariff barriers. So meaning um to enable American companies to be able to sell more overseas. And they've also included elements of um our uh trading partners um having investment commitments to invest and expand um companies um in the United States which will create more American jobs. And this is all about moving from a consumption-based economy to a production economy, one that grows jobs in the country. Because what we saw um since China's ascension into the WTO and from um it receiving the most favored nation status back in 2001 um that America has lost hundreds of thousands and and by some accounts um some have said up to 5 million jobs. And so that um has hollowed out um what are bluecollar jobs and has also really hurt our capacity in our supply chain in our national security. And so by focusing on building up our um domestic capabilities, we're able to shore up critical supply chains. And so we've seen that in conversations about rare earth and critical minerals which it started and the technology started in the United States and over time um companies sold and and then um ultimately that ended up being a significant power and an industry in China and so here we are in a very weak position on this critical industry and we've seen the same thing play out with ship building and that's why for example um our trading ally of South Korea. Um, a key component of that deal negotiation included an investment of 150 billion in rebuilding America's ship building capacity. And so the president um think of this, the president is using tariffs as leverage in order to secure market access which grows American companies and American jobs and also to it does generate revenue but also to provide um investment opportunities which also when you have green field investments um and when you have other countries that are buying more planes for example that leads to more American jobs um high higher um wages and um ultimately um protects American workers. >> Yeah. You mentioned how the trillions of dollars of investment that has come into the US would not have been possible without the tariffs because they would just continue producing overseas and then just shipping in. But with the threat of the tariff, it's it's more viable for them to to invest in production in America. So, I want you to contrast um what you see as some of uh Trump's greatest wins with the tariffs um and and how um potential inflationary concerns may or may not be mitigated. >> Um yes. So, so really um three points about the winds. Um first of which is you the tariffs have generated revenue and so to the extent um they're generating revenue um we're facing as a country uh 37 actually it's now $ 38 trillion debt um that's $110,000 for every man and child so to the extent we're able to generate more revenue it provides us an ability to you know pay down the debt reduce taxes and and really strengthen our country and so that's the first point um secondly is um by as as I mentioned by um implementing the tariffs, it enables the president to have um and to have the leverage in order to um reduce and and require countries to reduce non-tariff barriers. And so we've seen that um with companies being able to sell more abroad um in certain instances um with particularly with our agriculture industry. Um and then thirdly, when these um trade agreements and trade frameworks include an investment commitment, um those investment commitments in uh enable um more companies to um expand and hire American workers. And so one just to give you one example is um within his Asia trip, if you add up all of the the investment commitments, that totals about $2 trillion. And if we expand that and say that investment comes over the next 10 years, that's about 200 billion a year. And if and there's academic studies that have said for every billion, that's about um invested, that's about 6,000 jobs. And so what this means is at 200 billion a year, you're talking about over a million jobs that this one trip could bring back to this country. And so that's the significance. and and I understand the point about inflationary um and and the critique on that and what I would point out is is let's look at the data from past years particularly when the president was in office and we saw in 20 in 2018 and 2019 that um the movement on prices were just a few ten of a percent and I think all of us will appreciate that this was the greatest economy when the president was in office and and wages were high um the stock market was high and and so um I Most people would agree that if if we can get strong wages and and our um our investments and and and our retirement savings can grow um if we have just a a shortterm um movement on prices. Um it's something that um we see as a means to an end. And and that's really what we're seeing with um the price movement is um is it's not it's not significant and we don't expect it to be very significant and we expect the benefits of these um trade agreements to far outweigh any short-term um inflationary movement. >> Well, we've been watching the Supreme Court today with great interest. Appreciate your analysis. Jill Homeman, thank you for joining. >> Thank you for having me.