Key takeaways

• The Supreme Court might soon overturn most of Trump’s tariffs.
• If those tariffs ceased to exist, prices would fall, growth would accelerate, and employment would rise.
• But Trump can probably reinstate any overturned tariffs on a different legal basis.

The Supreme Court may soon upend President Donald Trump’s trade war.

Various state governments and small businesses are challenging the legality of most of Trump’s tariffs. Their case reached the Supreme Court a week ago. In oral arguments, a majority of justices appeared to side with the plaintiffs — and it isn’t hard to see why they might have such sympathies.

To justify the bulk of his tariffs, Trump has invoked the International Emergency Economic Powers Act (IEEPA), a statute that empowers the president to “regulate” transactions in response to “unusual and extraordinary” threats amid national emergencies. In the administration’s view, this law authorizes them to impose tariffs on more or less any nation, since America’s trade deficit constitutes an unusual and extraordinary threat to the United States.

But the idea that a trade deficit constitutes such a calamity is disputed by most economists and legal scholars. And it’s not clear that the IEEPA authorizes broad tariffs in any case: “Regulating” a transaction is not necessarily the same thing as imposing a tax on imports. And it’s not clear that Congress can constitutionally give presidents completely open-ended authority to impose new tariffs, given that the legislative branch is supposed to hold the power of the purse.

If the Court overturns Trump’s tariffs, the economic consequences for ordinary Americans could be profound — at least, until he finds new legal rationales for deliberately driving up the cost of living.

The Supreme Court may soon increase your income by $1,000

Since taking office, Trump has massively increased taxes on imports. In January, the average US tariff was 2.5 percent. Now, it is 17.9 percent — the highest since 1934 — according to the Budget Lab at Yale.

This has taken a toll on the US economy. By taxing various foreign-made industrial inputs — from steel to semiconductors to lumber — Trump has made it more expensive for American companies to produce........

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