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Fed Governor Resigns & Tariff Battles · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosseo from Bloomberg Radio.
0:10
Speaker 2: I have an open spot or the Federal Reserve Board.
0:13
Speaker 2: I'm very happy about that.
0:15
Speaker 1: President Donald Trump suddenly has a chance to fill an
0:19
Speaker 1: opening at the Federal Reserve earlier than expected, after FED
0:23
Speaker 1: Governor Adrianna Kugler announced her resignation on Friday. Kugler's exit
0:29
Speaker 1: unfolds amid unprecedented political pressure from the White House on
0:33
Speaker 1: the Central Bank over monetary policy, with Trump often launching
0:38
Speaker 1: personal insults at your own Powell. The current chair joining
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Speaker 1: me is Catherine Judge, a professor at Columbia Law School. Kate,
0:47
Speaker 1: what's your reaction to Kugler's departure.
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Speaker 3: I was surprised she is the next governor to leave. Naturally,
0:55
Speaker 3: her term expires early in twenty twenty six, so it's
0:59
Speaker 3: clearly a spot that President Trump is going to be
1:01
Speaker 3: able to have available in the relatively near future. But
1:06
Speaker 3: this short window of time changes dynamics in a meaningful way.
1:12
Speaker 3: Among other things, her spot was seen as a like
1:14
Speaker 3: b position for the person that President Trump would like
1:18
Speaker 3: to bring in to be the next chair, So this
1:20
Speaker 3: really potentially accelerates that process and could lead to even
1:24
Speaker 3: more intense pressure on Powell to step down from his
1:28
Speaker 3: position as chair.
1:30
Speaker 1: When President Trump was leaving the White House on Friday,
1:35
Speaker 1: he said that he was very happy to have an
1:37
Speaker 1: open spot, and he told reporters that she was stepping
1:40
Speaker 1: down because she disagreed with quote too late on the
1:44
Speaker 1: interest rates. That's his derogatory term for Powell. But does
1:48
Speaker 1: that align with her publicly stated views.
1:51
Speaker 3: We have not seen anything to that effect in what
1:56
Speaker 3: she has stated publicly. We have seen disagreement with Van
2:00
Speaker 3: Koogler and Michael Barr on the one hand, and other
2:04
Speaker 3: members of the board on the other hand. Are matters
2:08
Speaker 3: of regulation, and it does look as though the current board,
2:12
Speaker 3: under the effective leadership of a vice chare for supervision
2:17
Speaker 3: Michelle Bowman, is going to engage in a deregulatory agenda.
2:20
Speaker 3: So on that front, it does look like there was
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Speaker 3: a difference of opinion, But that's not necessarily a reason
2:24
Speaker 3: for her to accelerate her departure. If anything, that's the
2:27
Speaker 3: reason for her to stick around and to let her
2:30
Speaker 3: voice and vote be heard.
2:32
Speaker 1: Trump says he's going to appoint the next FED governor.
2:35
Speaker 1: Will you explain why he basically has to appoint the
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Speaker 1: next FED governor to fill her spot, so.
2:42
Speaker 3: He has to choose the chair among the governors. Powell's
2:47
Speaker 3: term as chair expires in May of next year. His
2:51
Speaker 3: term his governor doesn't expire until twenty twenty eight. It
2:55
Speaker 3: is possible that Powell stepped down as governor at the
2:58
Speaker 3: same time he sets down share, but that is by
3:01
Speaker 3: no means guaranteed, and because there are no other additional
3:06
Speaker 3: slots open, Chris Waller, who's a Republican who Trump previously
3:12
Speaker 3: put on the Board of Governors, is a possibility or
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Speaker 3: FED chair, as if he wants to promote Waller, then
3:19
Speaker 3: he wouldn't need to use this slot for purposes of
3:23
Speaker 3: introducing somebody who would then take over as chair. But
3:26
Speaker 3: if he does want Kevin Hassett or Kevin warsh or
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Speaker 3: any of the other names that have been bandied about,
3:32
Speaker 3: this slot might be his critical opportunity.
3:36
Speaker 1: Are there any indications as to whom he's favoring for
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Speaker 1: the role.
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Speaker 3: There's been rumors that hast has been taking over as lead.
3:46
Speaker 3: Kevin Worsh's names has been around for a long time.
3:50
Speaker 3: We have certainly seen both of them actively campaigning for
3:54
Speaker 3: the job in their public statements have been very supportive
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Speaker 3: of the lower interesting streat policies that Trump would otherwise
4:02
Speaker 3: like to see in place, But we have heard nothing
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Speaker 3: official from the White House the respect who's likely to
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Speaker 3: be the next comanee.
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Speaker 1: The Open Market Committee voted nine to two to leave
4:13
Speaker 1: rates unchanged, so one more vote won't necessarily make a difference.
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Speaker 3: It's hard to know. I mean, then this is really hard.
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Speaker 3: So first of all, the site is already facing an
4:24
Speaker 3: environment in which they might be changing course independent of
4:27
Speaker 3: a new chair coming in. The most recent jobs numbers
4:31
Speaker 3: look weaker than they expected, and there have been some
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Speaker 3: revisions for a variety of reasons to think that there
4:37
Speaker 3: might have already been a modest changing course underway. But
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Speaker 3: you're right, I mean, one of the key things to
4:42
Speaker 3: keep in mind is the Federal Open Market Committee is
4:45
Speaker 3: a twelve member committee, and the chair or kind of
4:49
Speaker 3: the expected chair, is only one of those votes. As
4:53
Speaker 3: one of the things that Trump past to kind of
4:55
Speaker 3: keep in mind, and that we all have to keep
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Speaker 3: in mind as we're watching, is how effective is the
4:59
Speaker 3: new going to be garnering support for a meaningfully different
5:04
Speaker 3: trajectory for policy. And that's going to be one of
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Speaker 3: the open questions as something new comes in, both what
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Speaker 3: is the interest rate corrector they want to see and
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Speaker 3: what are the tools they're going to use to try
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Speaker 3: to convince fella members of the Federal Open Market Committee,
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Speaker 3: But actually a different policy courses for the best in.
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Speaker 1: The past have fed Governor's not been able to convince
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Speaker 1: the Open Market Committee to do what they want.
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Speaker 3: What we haven't seen in the past is quite as
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Speaker 3: clear of a mismatch between what the President wants to
5:39
Speaker 3: see happen and what the current interust rate policy is.
5:43
Speaker 3: So we've certainly seen nominees come in because they are
5:46
Speaker 3: meant to kind of change the directory. Paul Volker famously
5:50
Speaker 3: was appointed because there was suddenly an appreciation that inflation
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Speaker 3: and managing inflation had to be the priority. That being said,
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Speaker 3: that was an insight that the Board also shared and
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Speaker 3: that President shared. So we did have some struggle at
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Speaker 3: times with aspects of his policy getting the level of
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Speaker 3: support he wanted. On the other hand, he was actually
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Speaker 3: pushing against the president, pushing against short term political will
6:16
Speaker 3: and pushing for kind of a longer term vision than
6:19
Speaker 3: aligned with the core mission of the Federal Reserve, which
6:22
Speaker 3: is fighting inflation and promoting maximum employment. So in that instance,
6:26
Speaker 3: it was a very different set of dynamics. So this
6:30
Speaker 3: is a different type of transition because we have a
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Speaker 3: president who had just been so outspoken for such a
6:36
Speaker 3: long time about wanting monetary policy to look dramatically different
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Speaker 3: than it has.
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Speaker 1: Have you ever seen this kind of pressure from the
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Speaker 1: White House on the FED.
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Speaker 3: Chair, No, No one has. We've certainly seen pressure from
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Speaker 3: the White House on the FED chair in the past,
6:53
Speaker 3: and on the pig reserve in the past. The classic
6:56
Speaker 3: concern is that the president always wants monetary policy to
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Speaker 3: be some more accommodative than the said oftentimes wants it
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Speaker 3: to be. There's certain times that those interests are allives.
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Speaker 3: During a depression, during difficult times, accommodated monetary policy is
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Speaker 3: the right policy given the FEDS du a manadate. But
7:13
Speaker 3: in moments like now, where the Fed's looking long term
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Speaker 3: and trying to think about what does it need to
7:19
Speaker 3: do to make sure that it successfully fights off the
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Speaker 3: reason bout of inflation, there's a possibility for conflict, and
7:26
Speaker 3: so LBJ famously kind of pushed around William mcchezie martinin.
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Speaker 3: So we've certainly seen presidents in those past that have
7:34
Speaker 3: pushed around FED chairs and pushed around the FED, and
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Speaker 3: that's because they oftentimes do want monetary policy to be
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Speaker 3: somewhat more commodative. Then is prudence given the medium to
7:45
Speaker 3: longer term interest in trying to mainstain stable prices. And
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Speaker 3: that's when those conflicts have come into place. But what
7:52
Speaker 3: we haven't seen is this type of continual pressure where
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Speaker 3: the FED chair is really targeted in an ongoing and
8:01
Speaker 3: repeated way, and where the President isn't just suggesting that
8:04
Speaker 3: rate should be a little lower or that monetary condition
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Speaker 3: should be somewhat more accommodative, but is really seeking but
8:11
Speaker 3: seems to be a very different approach to monetary policy
8:15
Speaker 3: than the current Federal Reserve is pursuing at a time
8:17
Speaker 3: where there is still some reason at least to worry
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Speaker 3: about inflation.
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Speaker 1: The nominee, whoever Trump chooses, will have to be confirmed
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Speaker 1: by the Senate. But if that person is then chosen
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Speaker 1: as the chair that does or doesn't need Senate confirmation.
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Speaker 3: That also is a Senate confirmation process. And there's also
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Speaker 3: this additional oddity this person is going to face kind
8:39
Speaker 3: of the ringer. There's a Senate confirmation to fulfill the
8:44
Speaker 3: remainder of Coogler's term. But the way this sat a
8:47
Speaker 3: reserve works oftentimes for agencies, once you are confirmed, you
8:52
Speaker 3: have a period in office that dates from when you
8:56
Speaker 3: are confirms You might have five years from the time
8:59
Speaker 3: you actually take office. For example. The way the fatal
9:02
Speaker 3: reserve works is there are these fourteen year terms on
9:05
Speaker 3: a staggered basis, and they are fourteen year terms in
9:09
Speaker 3: part to limit the ability of anyone president to appoint
9:12
Speaker 3: too many different governors, but partly because of that distinct
9:16
Speaker 3: staggered structure. When somebody is nominated to fulfill a seat
9:21
Speaker 3: for somebody who's leaving before their end of the term,
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Speaker 3: as Cooper is, they only are confirmed to the end
9:29
Speaker 3: of that term. So in theory, if this person manages
9:33
Speaker 3: to go through hearings and confirmations in time to fill
9:38
Speaker 3: the seat before it naturally become vacant, there might have
9:42
Speaker 3: to be a nominal second process to have a person
9:45
Speaker 3: actually confirmed again when the term expires.
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Speaker 1: Trump on Friday call for the Board of Governors to
9:52
Speaker 1: usurp the power of the FED chair. He said in
9:55
Speaker 1: all caps, the board should assume control and do what
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Speaker 1: everyone knows has to do be done.
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Speaker 3: I mean, there's a lot of things to say there.
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Speaker 3: So first of all, as we were discussing earlier, each
10:05
Speaker 3: member of the FMC is not just the board the FOMC.
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Speaker 3: The Federal Up the Market Committee, which determines monetary policy,
10:13
Speaker 3: is a twelve member committee, so all seven members of
10:15
Speaker 3: the board governors have votes on that committee, but so
10:18
Speaker 3: do five presidents. So the policy makers involved are not
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Speaker 3: just governors, and the governors are exercising their independent judgments.
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Speaker 3: We saw two governors actually dissent and they did suggest
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Speaker 3: that more accommodative monetary policy was appropriate, but we saw
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Speaker 3: the rest of the governors go along and actually agree
10:37
Speaker 3: with Powell that the preferred approach was the right approach
10:42
Speaker 3: to take.
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Speaker 1: The Supreme Court in a May decision suggested that Trump
10:49
Speaker 1: couldn't remove Powell because of policy disagreements. Is there any
10:53
Speaker 1: feeling for whether the administration is still trying to get
10:57
Speaker 1: him removed.
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Speaker 3: Yeah, there's two different issues. So one we did to
11:02
Speaker 3: be this effort with the renovations, which really looks pretextable. Right.
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Speaker 3: What we know is Trump wants lower interest rates. He
11:09
Speaker 3: blames Powells for the interest rates being what they are,
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Speaker 3: and so he was looking at the cost overruns and
11:15
Speaker 3: trying to use that as potentially a basist for removing
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Speaker 3: Powell for cause that has seemed to have passed at
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Speaker 3: least modestly passed. But it does suggest that Trump might
11:25
Speaker 3: still be on the lookout for other pretextual grounds for removal.
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Speaker 3: The other issue that remains an issue particularly and actually
11:32
Speaker 3: becomes more of a live issue since Coopler is stepping down,
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Speaker 3: is might he try to appoint somebody else as chair
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Speaker 3: and not remove Powell but merely demote Powell? And here
11:44
Speaker 3: are the laws little tricky and the Supreme Court decision
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Speaker 3: which wasn't even really a decision as part of their
11:50
Speaker 3: shadow docket, did it resolve the question of whether Powell
11:54
Speaker 3: can be devoted. The statutory language is very clear governors
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Speaker 3: of the SUTA Reserve can be moved from the role
12:00
Speaker 3: of governors only for cost, so there's very clear statutory protection.
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Speaker 3: There By contrast, the chair and the various vie chairs
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Speaker 3: have four year terms. The vote is to fourteen year
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Speaker 3: terms and there's no explicit four cause removal protection. There's
12:15
Speaker 3: arguments that he can still be demoted only for cause
12:18
Speaker 3: and not for policy. Differences, but there is a real
12:21
Speaker 3: risk that that legal question will be tested in a
12:25
Speaker 3: more pressing way now that the window of time between
12:29
Speaker 3: when he can get a new nominee onto the board
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Speaker 3: and when Powell's terms chair comes to a natural end.
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Speaker 3: Now that the window is to come Bonger, this falls.
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Speaker 1: Into the more questions than answers category. Thanks so much, Catherine.
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Speaker 1: That's Professor Catherine Judge of Columbia Law School.
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Speaker 2: The US Treasury has taken in one hundred and fifty
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Speaker 2: billion dollars from tariffs, and we'll be adding about two
12:52
Speaker 2: hundred billion dollars next month, four totals that nobody's ever
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Speaker 2: seen before.
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Speaker 1: Frankly, the challengers to President Trump's tariffs say they rest
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Speaker 1: on a quote breath taking claim to power that no
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Speaker 1: president has asserted in two hundred years, and a federal
13:11
Speaker 1: appeals court appeared skeptical about Trump's authority to issue the
13:16
Speaker 1: sweeping global tariffs under an emergency law that has never
13:20
Speaker 1: been used for that purpose and doesn't even mention tariffs.
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Speaker 1: In May, the U s Court of International Trade ruled
13:28
Speaker 1: that the vast majority of President Trump's levies were issued
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Speaker 1: illegally and ordered them blocked. The Federal Circuit Court of
13:35
Speaker 1: Appeals gave the Trump administration a temporary reprieve, but during
13:40
Speaker 1: the high stakes oral arguments last week before the circuit's
13:44
Speaker 1: entire slate of eleven active judges, it appeared that several
13:49
Speaker 1: were skeptical of the government's arguments. A decision finding against
13:54
Speaker 1: the tariffs will almost certainly be appealed to the Supreme Court.
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Speaker 1: My guest is Simmy Garula, a professor at Notre Dame
14:02
Speaker 1: Law School and the former Undersecretary for Enforcement at the
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Speaker 1: Department of the Treasury. Jimmy, will you start by explaining
14:10
Speaker 1: what authority President Trump is using to impose these tariffs.
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Speaker 4: Now, President Trump is using a law called the International
14:20
Speaker 4: Emergency Economic Powers Act, and it goes by the acrony
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Speaker 4: i EPA, and IIPA does authorize the President to impose
14:33
Speaker 4: economic sanctions on individuals, entities, even countries in response to
14:39
Speaker 4: an unusual and extraordinary emergency. So that's the precondition for
14:45
Speaker 4: the exercise of these economic sanctions. The President has to
14:50
Speaker 4: declare that there is an unusual and extraordinary emergency that
14:55
Speaker 4: has its source in whole or in substantial part outside
14:59
Speaker 4: the United State, and further that threatens national security, foreign policy,
15:05
Speaker 4: or the economy of the United States. So that's the
15:09
Speaker 4: statute that the president is relying upon. There's a couple
15:13
Speaker 4: of very serious problems with using IIPA. First and foremost,
15:17
Speaker 4: AIPA never mentions tariffs. The word tariff does not occur
15:23
Speaker 4: even one time in the text of the statute. And second,
15:28
Speaker 4: AIPA was enacted to Congress in nineteen seventy seven, and
15:34
Speaker 4: no president in the history of AIPA has ever cited
15:39
Speaker 4: AIPA as the authority to authorize the position of tariffs.
15:44
Speaker 4: So this is the only president in the entire history
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Speaker 4: of AIPA that's ever cited aipa's authority for imposing tariffs
15:53
Speaker 4: on foreign countries.
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Speaker 1: The challenges here were a group of democratic led states
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Speaker 1: and small businesses. Is what was their basic argument.
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Speaker 4: Their basic argument was, first that a EPA just doesn't apply,
16:07
Speaker 4: that it does not provide authority for the president to
16:10
Speaker 4: impose economic sanctions. And again for the reason the basic
16:13
Speaker 4: particulate character i'll mention of the statute, no president has
16:17
Speaker 4: ever used a EPA to justify the imposition of terrorists,
16:21
Speaker 4: So that's argument number one. Argument number two is that
16:24
Speaker 4: even if AEFA did apply that there's some serious questions
16:28
Speaker 4: about whether or not the president is properly using or
16:32
Speaker 4: satisfied the requirements of a EPA. You know, for example,
16:36
Speaker 4: what is the unusual and extraordinary emergency that justifies economic
16:43
Speaker 4: sanctions in the form of terrorists? And here the president
16:49
Speaker 4: has articulated many different so called emergency. On the one hand,
16:57
Speaker 4: it's a trade deficit, you know, that's the unusual exurin
17:00
Speaker 4: or emergency. On the other hand, it's the fetanyl crisis,
17:05
Speaker 4: the importation of the fetanyl from Mexico, Canada and China.
17:10
Speaker 4: And the third yes, and even cited immigration. You know,
17:14
Speaker 4: the immigration is the emergency. But first there's a question about, well,
17:20
Speaker 4: is a trade deficit really an unusual insternary emergency. We've
17:25
Speaker 4: had trade deficits with countries around the world for decades.
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Speaker 4: I mean, that's nothing new. Trade deficit with China, trade
17:33
Speaker 4: deficit with Mexico, Canada, with the EU, that's nothing new.
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Speaker 4: So what is so usual and extraordinary about trade deficits today?
17:44
Speaker 4: That again triggers the application of a EPOS. And then
17:48
Speaker 4: there's another problem with the actual application of the statute.
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Speaker 4: And when we look at the feedinyl crisis, for example,
17:54
Speaker 4: approximately eighty eight percent of fetanol that consumed in the
17:59
Speaker 4: United States comes to across the Mexican border, the border
18:02
Speaker 4: with the US and Mexico. Only eight percent comes across
18:07
Speaker 4: the Canadian board. So if AIPA is being used or
18:11
Speaker 4: the emergency is fetnol involving the importation from Canada, Canada
18:18
Speaker 4: is only responsible for a very small percentage of fetnol
18:22
Speaker 4: coming across the US Canada borders. But there doesn't appear
18:26
Speaker 4: to be a nexus or a close nexus between the
18:30
Speaker 4: so called crisis and the targets of the tariffs and
18:34
Speaker 4: the sanctioned They are being closed on various countries.
18:37
Speaker 1: So what was the government's response to that.
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Speaker 4: One response is that, well, this involves foreign affairs, and
18:46
Speaker 4: in the area of foreign affairs, the Supreme Court is
18:49
Speaker 4: recognized that the president has sundery powers. You know, the
18:52
Speaker 4: government needs to speak with one voice in dealing with
18:56
Speaker 4: foreign affairs, and that one voice should be of them,
19:00
Speaker 4: you know, the executive branch. So it's again the president
19:03
Speaker 4: has plenary, you know, virtually unlimited powers in dealing with
19:08
Speaker 4: other countries. On the other hand, that argument runs into
19:12
Speaker 4: a serious problem, and that serious problem is the US
19:15
Speaker 4: Constitution itself because Article Launce, Section eight was one state
19:21
Speaker 4: that Congress shall have the power to lay collect taxes. Duties, infosts,
19:26
Speaker 4: and excises and tariffs are really a form of attax.
19:31
Speaker 4: It's a form of attax. And therefore the power to
19:36
Speaker 4: lay and collect taxes fall within the power of comus,
19:41
Speaker 4: you know, not the present. And I think there's one
19:44
Speaker 4: other very important argument, and I don't think it came
19:47
Speaker 4: up in this recent argument before the US Court of
19:50
Speaker 4: Appeals for the Federal Circuit, and it's a very basic
19:53
Speaker 4: fundamental principle of our democracy and our founding fathers. We're
19:58
Speaker 4: very concerned about too much power residing in the hands
20:02
Speaker 4: of any one person or any one branch of government.
20:06
Speaker 4: And that's why we have a democracy based upon separation
20:09
Speaker 4: of powers. And here, if you follow the government, it's
20:13
Speaker 4: all even reasoning. Then the president has this unwomaned power.
20:17
Speaker 4: One person can decide to impose tariffs on any country
20:23
Speaker 4: or every country in the world, can decide what the
20:28
Speaker 4: percentage of the tariff should be, should be, ten percent,
20:31
Speaker 4: should be, twenty and twenty five percent against what countries
20:35
Speaker 4: and for what we And so it seems to me
20:38
Speaker 4: that the president's position really flies in the base of
20:42
Speaker 4: this very fundamental bedrock principle of separation of powers on
20:47
Speaker 4: which are democracy is based.
20:49
Speaker 1: So the panel of judges seem to sharply question the
20:53
Speaker 1: government's position. One judge said, tariffs seemed to have no
20:57
Speaker 1: friends in the text of the emergent see law. Do
21:01
Speaker 1: you think that a majority of the judges might rule
21:05
Speaker 1: against the tariffs?
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Speaker 4: I think, based upon the questions and the tenor and
21:10
Speaker 4: some of the questions that were asked me the oral argument,
21:13
Speaker 4: I think the Federal opelate Court is very skeptical of
21:17
Speaker 4: the government's position that i provides authority from the President
21:22
Speaker 4: to impose terriffs. So I'm cautiously optimistic that the appelic
21:29
Speaker 4: Court will likely reject the government's argument and then find
21:34
Speaker 4: that i APE has been in a supply here. So
21:37
Speaker 4: then the credible next question, the credibal next step is
21:40
Speaker 4: going to be before the Supreme Court, because if the
21:43
Speaker 4: government loses, there's no question that they'll appeal the matter
21:47
Speaker 4: to the United States Supreme Court, and there the outcome
21:51
Speaker 4: is really up in the air.
21:53
Speaker 1: Because it's an on bank panel, the decision here can
21:56
Speaker 1: be appealed directly to the Supreme Court.
21:59
Speaker 4: Yeah, and there. What we've seen is that, you know, historically,
22:02
Speaker 4: just you know, the first six months of the Trump administration,
22:05
Speaker 4: the US Supreme Court has been very differential to the
22:07
Speaker 4: executive branch with respect to claims of executive authority or
22:13
Speaker 4: Trump adminspiration. The Supreme Court determined, first and foremost, the
22:18
Speaker 4: president is immutial from criminal prosecution excepting very very rare
22:24
Speaker 4: limited exceptions, and the President can on his own dismantled
22:29
Speaker 4: federalations without consulting with or attaining the approval of Commerce,
22:34
Speaker 4: and with whole bonds that have been appropriated by commers
22:37
Speaker 4: and fire Inspector General and fire other key government personnelities
22:42
Speaker 4: without any consultation or approval from Congress. And so the
22:46
Speaker 4: president might be a more favorable audience imported Supreme Court
22:51
Speaker 4: than he received before the US Court of Appeals for
22:55
Speaker 4: the Federal.
22:55
Speaker 1: Circuit is Supreme Court president. On the Challengers, they cited
23:01
Speaker 1: two of the Biden administration's biggest losses before the Supreme Court,
23:06
Speaker 1: in fights over restrictions on pandemic era evictions and canceling
23:12
Speaker 1: federal student loan debt to support their position that Trump
23:16
Speaker 1: now can't try to read more power into the economic
23:20
Speaker 1: emergency law than it offers on its face.
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Speaker 4: Well, here's a difference. I think the difference here is
23:27
Speaker 4: that the Supreme Court again could focus on the fact
23:31
Speaker 4: that these tariffs involve foreign affairs and the president's ole
23:37
Speaker 4: oregon for the country on issues involving international affairs. The
23:43
Speaker 4: cases that you cited involved domestic statutes, you know, domestic law,
23:47
Speaker 4: not international foreign affairs. And so here the court might
23:52
Speaker 4: seize on that recognized and the president has those plenary
23:56
Speaker 4: powers in the field of foreign affairs, and again be
23:59
Speaker 4: more pathetic, you know, to the argument. At the same time,
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Speaker 4: I mean, if the Court were to rule against the president,
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Speaker 4: I mean, just think of the repercussions of that ruling
24:09
Speaker 4: with respect to the tariffs that the President has set,
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Speaker 4: the tariffs that have gone into effect, the tariffs that
24:16
Speaker 4: are going to be going into effect in a few weeks.
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Speaker 4: I mean, they would have just literally global ramification of
24:22
Speaker 4: the Supreme Court held that the President did not have
24:25
Speaker 4: the authority to impose these tariffs foreign countries across across
24:29
Speaker 4: the globe.
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Speaker 1: Could the US then be forced to refund duties that
24:34
Speaker 1: have already been collected, Would the ruling be retroactive?
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Speaker 4: Would really just be you know, perspective, and so the
24:42
Speaker 4: scope of the ruling we would have to see, you know,
24:45
Speaker 4: what the application scope of the ruling would be. But
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Speaker 4: that certainly could be one of the one of the
24:50
Speaker 4: implications if it rules against against the president. And so
24:53
Speaker 4: maybe again the Supreme Court just doesn't want to take
24:56
Speaker 4: that on. They don't want to rule in a way
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Speaker 4: it's going to create these kinds of political and economic
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Speaker 4: and you know, sea waves across the globe.
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Speaker 1: Does Trump have other tools to impose tariffs?
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Speaker 4: The tool would be the I think the appropriately too,
25:12
Speaker 4: it would be just simply to build to Congress. And
25:14
Speaker 4: so there's certainly nothing that prohibits the president from going
25:18
Speaker 4: to Congress and actually Congress to enact legislation that would
25:22
Speaker 4: authorize the president to impose tariffs of particular countries for
25:27
Speaker 4: particular reasons. You would think, in light of the fact
25:30
Speaker 4: that that both the House and the Senate are controlled
25:33
Speaker 4: by the Republican Party, that he would receive a very
25:37
Speaker 4: receptive audience there and they would respond accordingly. And the
25:42
Speaker 4: legislation that the president has a question. But here I think,
25:48
Speaker 4: you know, there's maybe something more you know, more fundamental,
25:51
Speaker 4: more basic. That's that play here, and that's again the
25:55
Speaker 4: power of the of the executive branch. And we've seen
25:59
Speaker 4: a president that has been really pushing and stretching the
26:02
Speaker 4: limits to his Article to powers. So maybe that's even
26:07
Speaker 4: more important to the Presidence being able to say no,
26:10
Speaker 4: I have it, or I don't have to go to confrege.
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Speaker 4: I can do this on my own. I don't need
26:14
Speaker 4: Congress and support. But at the end of the days,
26:16
Speaker 4: the pragmatic matter, he could accomplish what he's trying to
26:19
Speaker 4: accomplish by going to Congress, the course and process would
26:23
Speaker 4: be much slower in enacting the necessary legislation and procedurally.
26:30
Speaker 1: This is an appeal from a decision in May of
26:33
Speaker 1: the US Court of International Trade which struck down both
26:38
Speaker 1: the April second Liberation Day tariffs and the migration related tariffs.
26:44
Speaker 1: Was that a forceful decision from the US Court of
26:47
Speaker 1: International Trade?
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Speaker 4: I think it was the written opinion articulated many of
26:54
Speaker 4: the reasons and many of the arguments that will raised
26:58
Speaker 4: again before the Pellet Court the Federal of Pelt Court,
27:02
Speaker 4: and which the Federal of Pelt Coort seemed to agree
27:07
Speaker 4: that those arguments also seem to resonate with the Federal Circuit,
27:12
Speaker 4: and so I think I think the underlying decision is
27:14
Speaker 4: sound based upon oral argument here before the Federal Circuit
27:19
Speaker 4: Court of Appeals, it appears that they're probably going to
27:23
Speaker 4: be incorporating many of those arguments and reasons that were
27:26
Speaker 4: articulated below in their opinion if in fact they rule
27:30
Speaker 4: against the President.
27:31
Speaker 1: You dealt with tariffs when you work for the government,
27:35
Speaker 1: what struck you about these?
27:38
Speaker 4: I found it significant. I did a little bit of
27:40
Speaker 4: due diligence on the opioid crisis in fetanol, and the
27:46
Speaker 4: CDC in twenty twenty four reported there's been a twenty
27:51
Speaker 4: seven percent decrease in overdoes death from fetanol compared to
27:56
Speaker 4: twenty twenty three. And so even that that argument, the
28:00
Speaker 4: unusual extraordinary emergency is the fedenyl crisis that has seemed
28:06
Speaker 4: to have subsided or reduced significantly over the last couple
28:12
Speaker 4: of years. Last year it is twenty twenty four, and
28:15
Speaker 4: so I think it further under touch. The presidents claimed that,
28:19
Speaker 4: you know, that's an emergency that justifies the imposition of
28:22
Speaker 4: carols against Mexico, China, and Canada.
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Speaker 1: It will probably be several weeks before we hear a
28:29
Speaker 1: decision from the Federal Circuit Court of Appeals. Thanks so much, Jimmy.
28:35
Speaker 1: That's Professor Jimmy Garoule of Notre Dame Law School. And
28:39
Speaker 1: that's it for this edition of The Bloomberg Law Show.
28:41
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28:44
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29:00
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29:07
Speaker 4: Mhmm.