Bulwark Takes - Trump's Big Beautiful Trade Wars Are Going Off The Rails

Episode Date: May 30, 2025

Sam Stein is joined by Greta Peisch, former General Counsel for the U.S. Trade Representative, to explain the latest legal developments in Trump’s tariff policies, including a court ruling challenging his use of emergency powers to impose broad trade restrictions, and how the ongoing legal uncertainty could affect future negotiations.

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tender, juicy, and its own sauce. Would you look at that? Well you can't see it but trust me it looks delicious. New Mc crispy strips now at McDonald's. Hey guys, welcome back to the Bulwark. Sam Stein, managing editor for the site and I have a special guest for us Greta Peisch. Greta is the former general counsel at the US Trade Representative. She's now a partner at the firm Wiley. She is an expert on all things

trade and she's going to unpack all the stuff happening around tariffs in a way that hopefully we can all understand because frankly, it's hard to understand. More important than that, just to break down the fourth wall, Greta is an old friend. We went to school together and we have been in conversation for what? Two decades? Something like that. And that's like the greatest accomplishment that you bring to the table is that you've endured me for two decades. So it's been hard.

It's been hard. Yeah, exactly. So if you can do that, you can just do a 10 to 15 minute Riverside record. I can try. All right, Greta, we're speaking like literally, I don't know, 30 minutes maybe after the U.S. Court of Appeals for the Federal Circuit has announced that is going to put essentially a stay on an earlier ruling by the U.S. Court of International Trade, which had said that Trump's, a portion of Trump's tariffs, a lot of them overstep the emergency economic emergency policy or powers act.

And they had invalidated the tariffs. Now the tariffs are kind of back on, especially this is going to the Supreme Court, it looks like but what's your read on what the hell is going on here and what should we make of it? Well, you know, I wouldn't make too much into this pause, into the stay that the Court of Appeals has put on the original order. This is all very complex, and it was complex to start with before the courts got involved. And there's just been a flurry of papers coming out of the parties today.

And so it's really just been a continual roller coaster of a different flavor than the roller coaster we've all been on for tariffs. And so it's really just been a continual roller coaster of a different flavor than the roller coaster we've all been on for tariffs. So yes, the, you know, the Court of International Trade, they invalidated the order, said that within 10 days, the administration had to comply through administrative action to essentially take off those tariffs. So the tariffs were still on today and we're probably gonna be on for a week or more as the administration took those steps. So they didn't really go on and off today.

What then happened is the court of appeals said, we're going to pause the order, so the tariffs will continue to stay in place while we consider actually essentially whether they should be paused while appeals are pending. So it's an administrative pause to say, we're going to pause them while we look at all these papers and decide whether to further stay the order, pause it while we consider the whole appeal.

Which- So the rule, essentially the ruling wasn't going to take effect for 10 days, and now it's not going to take effect for however long it takes to adjudicate this. Let's step back for a second. Just explain this to me like I'm a child, which is usually how you talk to me. The US Court of International Trade, what did they actually find was illegal about Trump's tariffs? So, the authority that was used is one that has never been used for tariffs before, the

International Emergency Economic Powers Act. This is the statute that we usually use to sanction bad guys in countries. So Iran, traffickers, you know, etc. Russia, this is that's that's what we usually use this for. It is used in other contexts, but that's the normal use case. And so it hasn't been used to to impose tariffs. And the administration use the term regulate imports, which is in the statute to say, well, that includes regulation includes lots of things, including tariffs. And so that's that was the hook that

they use for both the worldwide tariffs, so liberation day tariffs, which was currently 10% on almost everyone, as well as the tariffs on Canada, Mexico, and China related to fentanyl and immigration. So those were the two sets. And all of these sets were, considered by the court, all found to be inconsistent with the statute.

The court didn't really say, never no way, ever can tariffs be used. They said for the worldwide tariffs, the statute does not allow this use for unbounded, sort of unlimited tariffs across the whole world. It's just that Congress just did not delegate that power through this statute to the president. And for fentanyl and immigration related tariffs, they said, you know, these tariffs, they don't really deal with that emergency, right? They're used, they're sort of, the argument was that they're being used to leverage and to induce Canada, Mexico and China to do more on that.

But they're not really directly getting at that issue. There's sort of a secondary effect. In other words, putting tariffs on underwear from China doesn't really directly address the fentanyl crisis. Right? It doesn't? Oh, well, that's what the court says. Okay. I just want to be clear. That's how I get

my fentanyl wrapped in underwear from China. I found this whole thing interesting because the idea is there's an emergency, right? Or that's what the Trump people saying, well, there's an emergency. So we have this emergency power. Let's use this emergency. That's not just the court said, you have yet to convince us that there's an emergency, right? They did quite say that they didn't. And I think that was smart of the courts. The courts don't like to get into telling a president what an is and is not an emergency, right? You know, that is something that courts like the type of question courts like to leave

with the executive branch. They don't want to get in the business of saying, well, this is an emergency. This is not, this is the national interest. This is not. Right. The emergencies are still declared actually a technical matter It's just saying it's flowing from that emergency. You can't use this power in this way And that was what the court found but now now Liberation Day is technically back on although we've kind of we definitely paused it There's a 90-day pause Although maybe not for China,

but China is paused and the EU was supposed to go up to 50%, but now that's paused. And it's really tough to keep track of all this. Now I know you're on the law side of this, but you do have some insight into the negotiation side of these things. I want to just kind of focus on 90 deals in 90 days, because that's essentially where we were

when liberation day was paused, 90 deals in 90 days because that's essentially where we were when liberation day was paused 90 is 90 days We really haven't seen any deals and For the people who don't know this stuff who haven't been in the room like what's the normal process for Negotiating a trade deal. How long does it normally take? What do we what is the haggling like? You know What do what do you have to get through in order to get a deal in place where you're like, yes, we're done. We signed the line.

We signed the paper. It is done. We have a deal. Well, it kind of depends on what your scope is that you're negotiating, right? Like how you're so lawyerly, just give me an answer. Geez. That's not how this works. It's not how I work.

So let me just say, I'll answer the question, but one, it depends. You'll answer the question, but let me have a preamble of about five minutes that goes to case law first. Yeah. No, you know, the, the administration has said that they're, you know, it's sort of one, it depends, but the administration has been pretty ambitious in what they said that they wanted to do. They've talked about tariffs.

They've talked about non-tariff barriers. They've talked about, um,'ve talked about non-tariff barriers. They've talked about laws and regulations of other countries that are difficult to change and difficult to agree to get other countries to change. So even if it's a slimmed down trade negotiations, something like what we think the administration wants to accomplish would take months, if not a year, usually. We did have an announcement on a US-UK framework, which was not a final agreement. It was a bit more aspirational

what they want to address. And you could see things like that coming out of, here's what we've agreed we want to accomplish. And then maybe sort you know, sort of rewinding back before you score cases came out, maybe sort of further pauses while they hammer at the detail. It's sort of extending those pauses that were in place out. That sort of felt like the direction that that was heading that we would get some number of announcements that we kind of have agreement ish on what we want to do. And we'll, we'll kick out that deadline while we kind of hammer out the details. And, and that sort of felt like where it could be heading.

Well, then let me ask you a last question then, because we, it always, or it already was incredibly hard to follow uncertain and dicey. And now you inject this legal uncertainty into the mix. Now I know everything's paused but it's only paused. It's not it's not 100% clear that the courts will ultimately say yeah you have the authority to put in place these tariffs. So now we have to wait and let this get adjudicated through the legal system. In what ways will this complicate all the, I assume, negotiations that are happening behind the scenes to get these 90 days and 90 days knowingfully well, they work 45, 40,

halfway through? Well, I think what the administration will likely do is try to continue to create leverage somehow. Right? So they're, you know, one, they'll say, we're gonna win the cases, I would expect. And then two, I think they'll say, look, even if we don't win these cases, and you've heard administration officials say this today,

we have other options. There are other tariff authorities. They might not be as fast or flexible or as desirable as ZAEPA in many ways, but we can still use those authorities to, to achieve the same objectives. And you know, you trading partner, you should keep talking to us because you know, that is what could happen to you if, if we, if we don't come to an agreement. Yeah, but that just seems less forceful. Honestly, then we're going to whip you with like this 50%, 145% tariff unless you come to the table and now it's like, well, you know, we might have some other authority and

yeah, you know, the courts may... I think they can get kind of concrete about it if they want to. And there are tariffs in place now. I mean, the UK, it actually didn't achieve, it appears a reduction in the reciprocal liberation day tariff that applied to them, which was 10%. They achieved concessions, it appears on sectoral tariffs under section 232,

which is a totally, this is the steel, aluminum, autos. There's other investigations and pharmaceuticals and a set of other products. And that's what the UK got. They got a hundred thousand Rolls Royce and that was not reciprocal tariffs. That was the Southern sectoral tariffs under another authority, which were not touched by the reliance yesterday. Now we were celebrating in the Stein household because of our impending Rolls Royce purchase, Good, good news for us.

All right, Greta, is there any last thoughts? What, what, what do you think? I don't, I know you're not going to, I know you're going to sort of punt on making a prediction, but let's say three months from now, what are we looking at in terms of a tariff regime from the administration? I think that they will find, uh, you know, I think the courts are hard to predict, but putting that aside, I think one way or another, the administration is going to have a plan B and C to achieve the tariff objectives that

the president has. This is obviously a priority for him. He's determined to pursue it in terms of both creating the leverage for negotiations and also having some tariffs in place, maybe permanently or in the long term. So I think they're going to find a way to do that. And they'll probably use the, this, this time while the tariffs are in place, while the courts consider to kind of figure out what that plan B is. All right.

Greta Peisch, thank you for doing this. I know, I know you didn't want to do this. I know you desperately were trying to avoid doing this and it was only me brow beating you over text relentlessly that got you here, but I hope it wasn't too painful. Well, that's all true and it was not too painful. Okay. Good. I can't wait to blast this out to our friends.

Text list. Greta pish. Thank you so much for doing this. Thank you guys for watching.