The Dispatch Podcast - What Comes Next for Trump’s Tariff Agenda?

Episode Date: February 24, 2026

Steve Hayes is joined by Scott Lincicome, Mike Warren, and John McCormack to discuss the recent Supreme Court decision on tariffs and what it could mean for the U.S. economy and for American politics ahead of the 2026 midterms. Plus: embarrassing concert confessions.The Agenda:—Justice Gorsuch’s opinion—Why tariffs aren’t going away—The weak IEEPA case—Lincicome’s law—The fight over refunds—How tariffs will shape the midtermsShow Notes:—Justice Gorsuch’s opinion—Why Trump’s Section 122 Tariffs Are Illegal—Trump Tariffs: Tracking the Economic Impact of the Trump Trade War—Where Dems Affordability Message Goes Next The Dispatch Podcast is a production of ⁠⁠⁠⁠⁠⁠The Dispatch⁠⁠⁠⁠⁠⁠, a digital media company covering politics, policy, and culture from a non-partisan, conservative perspective. To access all of The Dispatch’s offerings—including access to all of our articles, members-only newsletters, and bonus podcast episodes—⁠⁠⁠⁠⁠⁠click here⁠⁠⁠⁠⁠⁠. If you’d like to remove all ads from your podcast experience, consider becoming a premium Dispatch member ⁠⁠⁠⁠⁠⁠by clicking here⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

The Dispatch podcast is presented by Pacific Legal Foundation, suing the government since 1973. Welcome to the dispatch podcast. I'm Steve Hayes, joined today by my dispatch colleagues Mike Warren and John McCormick, and dispatch contributor Scott Linsicum, who is the vice president for general economics at the Cato Institute and the author of the dispatch's Capitalism Newsletter. On this week's roundtable, we'll discuss the massive Supreme Court decision on tariffs. It's meaning for the economy, for separation of powers, for our legal system, and for our politics ahead of the 2026 midterm elections. And finally, this week's not worth your time takes us down a nostalgic road for a discussion about our first concerts. Before we get to today's conversation, please consider becoming a member of the dispatch. You'll unlock access to bonus podcast episodes and all of our exclusive newsletters and articles.

You can sign up at the dispatch.com slash join, and if you use the promo code roundtable, You'll get one month free. And if ads aren't your thing, you can upgrade to a premium membership. No ads, early access to all episodes, two free gift memberships to give away, exclusive town halls with the founders, and much more. Without further ado, let's dive in. The Hyundai-Alanta hybrid inspires a special type of love, the type that makes you slow down and enjoy the ride.

With best in-class fuel efficiency and a best-in-class new car warranty, it's made for the long run, wherever the road takes you next. Because some relationships are built to go the distance. It's that Hyundai-A-Lontra type of love. Gentlemen, welcome to the conversation. Scott Lincolum, Friday had to be just about the best day in a long time for you. And we'll come to you in just a moment to explain why and to explain, you know, what you've been doing.

For those people who are not yet reading capitalism at the dispatch, and I don't think there are many, really, in the country or in the world, we'll let you take us through why that is. But I want to start with you, Mike. Can you give us just a quick overview of the news from Friday and what happened? Supreme Court came out with their decision. It was a 6-3 decision, essentially overturning. And Scott will correct me if I get any of the terminology wrong.

Yes. Thank you. overturning the justification that the Trump administration had offered for, I don't know, something like 70, 75% of the tariffs that they've instituted in this administration under AEPA. I'm not going to even try to recite what that stands for. International Emergency Economic Powers Act of 1977. Well, I mean, you could show off, I guess. You know, nerd alert here.

He has it written down. But this 6-3 decision by the Supreme Court overturning that justification, it was an interesting split, and people can go listen to A.O. for sort of their emergency pod on the Kremlinology of the Supreme Court and that. But suffice it to say, John Roberts, the Chief Justice writing the opinion, you had the three liberal justices who concurred and wrote their own concurrences. Justice Amy Coney-Barrant had her own concurrence, and Neil Gorsuch had his concurrence, which I think was sort of the most edifying read of all the opinions because he goes through essentially every single, except for the chief justices, every other opinion that was written about this in order to sort

of deal with all of its arguments. And particularly what was interesting was, or such as handling of the dissents from Justice Kavanaugh, who was joined by Alito and Thomas, and then Justice Thomas wrote his own dissent. But the big picture is that these tariffs are the justification that the government was making for it, essentially a national emergency that allowed for the administration to institute these tariffs without the consent of Congress. And the Supreme Court basically said, no, you can't. And so seemingly they were sent back to the drawing board. But I think, as we'll discuss today, the administration is taking a very, like, plugging their

ears. I'm not listening approach to the way that this decision was reached, drawing a lot on the dissent, particularly from Kavanaugh, to justify their continued approach to instituting tariffs and some other justification. And in a sort of interesting little flourish, the Trump administration and Donald Trump in particular has essentially said, thank you Supreme Court. The tariffs just got 5% higher. And I think, what are we now? I don't even, I can't even keep up. 15% now he's sort of raised that rate. So, well, okay, well, look, I've talked enough, like, I've given, the outline here, but I feel like Scott needs to, like, give us the details of what we can take away

from this. Yeah, Scott, I mean, I think the first and most obvious question to you is, who could have predicted this? Okay, wait, everybody predicted this, right? Okay, Scott predicted this. Pretty much, I mean, I would say most legal observers predicted this. When this happens, Scott, you saw this coming. You've been talking about why the president shouldn't have taken this, course, in the first place beyond just the economics of it, the argument where I think weak, justifying his decisions. When you first saw this, what was your reaction? relief, quite frankly, the decision itself, 6-3 was basically what everybody expected. If you looked at the betting markets, you had about a 70, 30, 75, 25% chance that the court would invalidate the tariffs.

The relief was that they did it exactly as I thought they would. And look, pat myself on the bat, but no, this is actually really important because it was a very clean ruling on statutory grounds. There was all of this criminology, all of this speculation, which I always thought was kind of crazy, but there's speculation that the court might try to half the baby, right? So the fentanyl tariffs are okay, but the trade deficit ones aren't, or he can't do the tariffs prospectively, but retrospectively, it's all fine. There are all these kind of guesses. They did none of that.

It was, I mean, really exactly what we expected. they ruled on statutory grounds, the statute doesn't allow tariffs at the end, and they punted back to the lower court to deal with refunds. And I would have, as a card-carrying, pitch-fork-carrying libertarian, would have preferred them to have mandated

automatic blanket refunds instantly, but we knew the court wasn't going to do that. We knew they were going to go back to the lower court. And so the good news, and again, the relief is that we can now proceed as we were kind of planning, which the next stage of the fight, We expected Trump to respond with new tariffs. And so we're now in, you know, the third inning of a nine-inning ballgame.

There's so much to talk about. I want to get to Justice Gorsuch. It was basically just like the Justice Gorsuch, I'm going to name names moment, picking fights. Yeah, airing of grievances. It was great. Yeah. And in an important way, I think, actually, calling out sort of people to his right and to his left on some of this stuff. I want to get to what the administration is going to do next.

I want to get to refunds. Scott, first, can you just give us a basic sense of why the president wasn't allowed to do what he attempted to do here, number one, and number two? What have been the economic implications of the tariff regime that we've seen from the administration so far? Yeah, so let's start with what he did, and that is that beginning in February of last year, and then really ramping up in April, the president invoked the International Emergency Economic Powers Act, IEPA, to apply tariffs first on imports from Canada, Mexico, and China on these fentanyl grounds, and then the Great Liberation Day tariffs in April, basically global tariffs with all these different rates, the fund chart, the penguins, all that great stuff.

And what was so shocking about this is that he didn't need to do this. There are other tariff laws out there that allow the president that Trump has used, that Biden used, and even other tariff laws that have never been used. And instead, Trump went for the AIPA, which... First of all, isn't even in the tariff part of the statute, right? There's no mention of tariffs in Aipa. No mention of tariffs, and it has really no rules. It is a fictively little tariff switch, Trump thought.

He could wake up on a Friday morning and say he doesn't like a Canadian television ad and suddenly threaten new tariffs. And you had to take that threat, all the taco stuff aside. That's kind of nonsense. It's not Trump always chickens out. Trump sometimes chickens out. So you had to take this serious. And at the end of the day, we ended up with a brand new tariff regime almost overnight with no notice and comment, no input from Congress, no anything other than the whims of Trump and whoever was determining the tariffs.

So this runs into all sorts of problems. I mean, economically, of course, you're talking about tariffs almost overnight went from around 3% on average to about 15 to 20%, depending on how you measure it, a massive increase. something we haven't had since World War II era, you also, though, had, and I think even more importantly, a ton of uncertainty. Because if the president really can slap new taxes on effectively $4 trillion worth of annual commerce, and he can do it in any way he wants at any time, if you are a American manufacturer, a retailer, a foreign export, you name it, your planning goes out the window. So this uncertainty has trade policy, uncertainty, and certainty generally has a dampening effect on investment. And this was, again, all done via a

statute that had never been used like this. And it was quite frankly shocking. So we now, a year later, have wonderful economists that have dug through all this, and they all basically find the same things. One, contrary to what the administration claims, nobody ever predicted economic doom, Armageddon. We did not get that. Instead, we got a small but significant increase in the total price level. So our inflation indicators, whether it's the CPI or the PCE, that went up by a little under a percentage point. So that's important for the Fed. The Fed wants 2%. Instead, we're hovering around 3%. A lot of that is because of the tariffs. We saw really significant price increases for certain products. We saw all sorts of supply chain shifting and stops and starts. All the trade

figures for last year are crazy. I mean, you had this huge increase in imports and this huge drop in imports and it just was nuts. So, and then you saw, and we saw this in Friday's GDP figures as well, just kind of a small decline in total economic growth, right? Take out the government, shut down, take out the weird trade figures from the GDP figures, and you get this kind of just slow down, right? And that's, again, what you'd expect it, and that's what we got. We also know, again, contrary to Kevin Hassett in the White House, Americans are mainly

paying these tariffs, right? They are paying them either via higher prices for imported products or, importantly, higher prices for domestically made products. Because if you reduce the supply of available products, you have less competition, domestic prices go up too. And we've seen that as well. So it's basically the economic outcome. And then we had this huge legal fight, right? So shortly after Liberation Day, a handful of small businesses, not the big ones. This is important.

It was the little guys who did this. A great testament to the American system, quite frankly. These small businesses said, you're going to put us out of business. You're going to bankrupt us to the Trump administration. We're suing. They won at the Court of International Trade. Of course, the administration appealed. The plaintiffs won again at the Federal Circuit.

And now they've won at the Supreme Court. A great victory for the American system. But, of course, we're only in the third inning. The fact is that we knew the administration was going to respond with more tariffs, and that's what we got. So, John, you've done a fair amount of reporting on this going back over the past year. Take us from all of Scott's pointy-headed talk about these things to the practical implications of the day-to-day stuff.

Scott said that, you know, this really affected small businesses more than any others, and they sought remedy and eventually prevailed, but not without cost. So, yeah, a year ago, while Trump's Liberation Day tariffs were in effect, I spoke to several small business owners about how the tariffs had impacted them. And then I reached back out to them anticipation of this Supreme Court decision, which we knew was going to come sometime, whether on Friday or this week. And we published your piece Friday morning shortly before we got the decision. It's as if you knew something. Pretty great timing. No inside leaks. I think you'll notice that the prediction markets did not swing in the hours before the decision. So I had no inside sources other than just the SCOTIS blog team mentioning that Friday could be the day. So I said, hey, I should have a follow-up piece for Friday. So, for example, you know, there's one guy I talked to. His name is Dan Turner. He owns Turner.

hydraulics in Carlisle, Pennsylvania. One example he gave me was that he was sourcing a product for a U.S. steel mill, and he was trying to get something, this thing called a hydraulic accumulator, it basically prevents molten steel from solidifying in case of an emergency. You need to have some sort of device. Again, I'm not an expert on this to make sure that you can manually protect the steel from solidifying. Now, he ordered this product in January of 2025, right when Trump was inaugurated, thinking he was going to pay a 25% tariff on it. Once Trump's Liberation Day tariffs went into effect, he was going to pay a 170% tariff. So he's going to pay an $84,000 tariff on a $49,000 item. And he was basically expected to have to eat that cost. So he told me, you know,

I'm just hoping that the ship sinks, that this thing is on the container, the container ship sinks, or someone comes to their senses before this thing arrives. Just to point out, because once it's on its way, you have to pay those duties. You have to pay the tariffs, regardless. He looked into canceling the order. It would have been more costly to ship it back. And so he was just worried what was going to happen. Anyway, the tariffs did go down to something like 55% before it hit the dock. So he paid a, you know, a heightened tariff, but not a devastating one for himself. And after this happened, this experience led him to say, hey, I need to find a different supplier for this. And honestly, the country where he found his best next bet was Denmark. Then all of a sudden, Trump wants

Greenland. And so he's just like, oh my gosh. wherever I turn, on any different moment, Trump could invoke these emergency tariffs. Because, again, as Chief Justice Roberts says in his decision, Trump's claiming authority for any amount, any duration, any product, any time. And all these other statutes that Scott just mentioned, they are limited in time and duration and product. And so basically, you know, the small business owners I talked to this week, they said, yeah, they're some more cautiously optimistic that, hey, we're not going to be, you know,

devastated by these capricious tariffs by, you know, staggering amounts, like 170%. But the underlying theme I got from a lot of them was that they're just concerned about the uncertainty from all this, because as Kavanaugh says in his dissent, that, hey, Trump just basically checked the wrong box. He can recreate this tariff regime or not. And Roberts, in his opinion, in a little footnote, says, in fact, we won't speculate on these cases,

but the other statutes are limited in time, duration, and scope. But if you're a business person, you don't know that. You don't know how long it's going to take for these cases to work their way through the courts. I'd love it, you know, to hear Scott just kind of go one by one, And, you know, I mean, whether these things are legal, what the likelihood of all these tariffs being struck down. But I mean, that's what the business owners I talk to. The uncertainty is the real killer. I mean, the cost, obviously, but the uncertainty is just so hard to plan for Q4.

They're trying to plan for the end of the year, how much product they need. One person I talked to, she said, most of my sales are holiday sales. I need to know right now what I should be charging, how much product I should be shipping in. She doesn't know. Uncertainty's a cost. And I would just add, though, I think uncertainty is a huge issue. but the other issue buried in what John just talked about is timing. So IEPA is literally wake up on a Friday, mad about Canada, and you have new tariffs on a Monday.

And that's not how the global economy works. So it takes 40 to 70 days for a boat to get from Asia to the United States. So you have this period of time where as an importer, you simply you're on the hook. And by the way, you're often bringing in product that you already own, right? This is like you've outsourced just the production. You actually still own the product. It's coming in. It's your stuff.

You have to bring it into the country or you go out of business, right? So the Aipa is uniquely pernicious in the sense that it has no limits on anything. And even the tariffs that are coming and that are already here, they have procedural and other limits that do make it better for importers. I mean, look, you're still going to be paying higher taxes and those taxes. is a problem, but at least you have some notice, right, and the ability to comment publicly, that kind of stuff as well. And I think that's just a huge difference. And one of the reasons why the court was so right to say, no, you don't have this. This is effectively an unlimited grant of congressional tariff power to the president. Right. Anything you want, anytime. And so even if you

don't care about tariffs, and I get it, I totally understand that. Even if you actually think protectionism is great as a purely as a separation of powers issue, as an executive power issue. There's something really wrong with the president being able to declare a national emergency and suddenly tax anything any way he wants in perpetuity, right? That's just a huge problem. And Mike, this is why he chose IEPA, right? I mean, this is the point, was that it gives him the most discretion to do the most tariffing at his whim, at his most whimsical. I mean, we did see. I mean, the examples that Scott has thrown out, there was another example where the president admitted on television that he didn't like the tone of, I think it was the leader of Switzerland,

if I'm not mistaken, something. That's correct. Yes. Yeah. And decided that he was going to crank up tariffs there because he didn't like the tone of something she said. It's not just threats, by the way. The Brazilian tariff, that there was an additional Brazilian tariff under Aipa. That's because he didn't like the political trial for Bolsonaro, his buddy down there.

this is not a national emergency, and you're talking, again, about tens of billions of dollars and commerce, millions of dollars of new taxes, the president just can do whatever he wants, and that's a big problem. And I just one other thing that I think buried in John's piece that's also important, this is uniquely problematic for small businesses, because unlike a corporate tax or really almost any other type of tax that we think of, tariffs are paid at the border. So you haven't even sold your products yet, and you have to have. to pay up and you have to put a bond down. And so small businesses don't have the capital.

They don't have the teams of lawyers and accountants to find ways to, oh, we're going to go put this in a bonded warehouse and all this stuff. And so for a small business, I mean, you're screwed. You're just totally screwed. And that's, I think, another reason why it's great that the court has kicked this out. All right, we're going to take a quick break, but we'll be back soon with more from the dispatch podcast. You might be tempted to let Taco Bell's new Lux Value menu go to your head because 10 indulgences for $5 or less makes you feel fancy. Like you might think you need cloth napkins.

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And we're back. You're listening to the Dispatch podcast. Let's jump in. Mike, we had almost immediately, of course, the president took the microphone and pitched what can only really be described as a temper tantrum. Shouted about the court. J.D. Vance sent out a tweet calling the court lawless, even though, as we pointed out, lots of people had predicted this. But the president made very clear that he's not done with tariffs. He is going to seek to do what he had been doing through other means. Some of these are are things that his own advisors had told him to do at the outset that he ignored. But they're not without problems themselves, if I understand right?

What's your sense of what the White House is likely to attempt to do next to continue the president's sort of obsession with imposing tariffs? I mean, it appears to be full steam ahead and find whatever justification we can find and use. There's sort of a whole list of other options. I thought it was interesting, by the way, that Trump's sort of hissy fit on Friday after this opinion was released was to essentially say, we can actually do a better version of IEPA. I just did, which is funny to me that, like, so there was a better option for you, a more sound option for you to do tariffs, and you didn't choose that. I mean, it's just Trumpian bluster, but it's a reminder that, like, the things that he says

about this, it's always grab the closest tool at hand, the most convenient tool at hand, and and use that and when that stops working, grab the next one. And that seems to be what he's planning on doing. But I wanted to go back to what the opinion had to say. And this was in Roberts, but also a lot in Gorsuch's concurrence, which was almost an elementary civics lesson, you know, buried in this sort of very, you know, specific tariff-focused opinion about the buy-in necessary from Congress. And I think what the decision, like I would encourage everybody to read Gorsuch, even if you're not a lawyer, which I am not, because of this buried civics lesson, about if these are so important, if these tariffs are so important, if the emergency is such that this needs to happen, then Congress is the reason that the founders gave Congress, and particularly the House, sort of these responsibilities and tools to implement taxes and all things have to originate tax-wise in the House of Representatives is because it is, responsive, the most responsive part of government to the people, to the vote. Theoretically, this is what it should be. And you get a sense of that, like, it would be nice

if Congress did these sort of things. But what's interesting is the way in which J.D. Vance and some of the other kind of pro-Trump commentators have focused on, this is undoing essentially the 2024 election. This is what Trump was elected to do. And the court is getting in his way. And it's a real sort of perversion of where the political will or the political mandate for these kind of things comes from. It's not just that Trump was elected and he gets to do whatever he wants. And this seems obvious, but you really had to have the justices of the Supreme Court walk people through this. There's a whole bunch of other elections that happened in 2024, that are happening in 26, the House, the Senate, these other elements of self-government that have to have to have. buy-in. And if they're so important, if these tariffs are so important, go get buy-in from Congress.

That really seemed to be the big message and sort of a heartening one for those of us, like at the dispatch, who are constantly hitting this, to see that message in the Supreme Court's opinion. Yeah, I thought the Gorsuch opinion was important for a couple of reasons. He basically was telling everybody to do their jobs properly, right? And he was pointing out his fellow justices and saying, hey, look, on some of these questions, you seem to be voting one way or inclined to vote one way if the president from your quote-unquote party, even though that's not at all the way that he put it, is in office or is affected by these decisions. And another way, if it's the opposite.

How do you explain this? Really, sort of calling them out. But he also did, as you point out, Mike, make this case that Congress really just needs to do its job. The president was trying to go beyond his role in responsibilities. Congress wasn't doing it at all. and the justices were, in some cases, punting based on what they had done in the past. It is worth the time. We'll make sure that we link that in the show notes. Scott, I want to talk to you a little bit about what comes next here in more detail. As I've said, the president has made it very clear he's not done with this. You're not given up. Right. No surprise. And they're looking at several different possibilities. I wonder if you could just walk us through those possibilities, the feasibility of them. We had our friend Andy McCarthy at National Review come out and blast.

one of these options in a piece over the weekend about the president's use of Section 122 of the Trade Act of 1974, saying that it's, in all likelihood, even more clearly illegal. Do you agree with Andy on that? And what do you expect to see from the administration? So it seems it's illegal. The Section 122 allows the president to impose a temporary, So a tariff of up to 15% for 150 days for serious balance of payments problems. In a time of the exact, I can't remember now the exact phrase. But I mean, you have to have basically a balance of payments crisis. And that allows the president to impose this temporary tariff.

And what is a balance of payments crisis? Is that just I can't do my checkbook? Yeah, no. So effectively, it's a run on the currency. Basically, foreigners are freaking out about the economy. They're withdrawing all of their money. The dollar is collapsing. And the president, you know, 122 is one of the tools the president could use to stop it.

So the issue here is that we're clearly not experiencing any sort of balance of payments crisis, right? And I should note, balance of payments is different from the trade deficit. The trade deficit is just you're simply importing more than you're exporting. and the trade deficit is mainly private transactions, not government transactions. And the trade deficit, of course, was the grounds for the big IEPO Liberation Day tariffs. Balance of Payments crisis is different. It is official transactions. It's basically the Fed and the Treasury and it's, again, kind of a currency-related issue. And you'd be able to see it because the dollar would be collapsing. Okay, so none of that's happening. And in fact, and this is definitely not my area,

people who like Phil Magnus, who's looked at this, he's done some great work actually over the weekend, Andy McCarthy who looked at this, they say, in fact, it's basically impossible to have a balance of payments crisis today because we're now on a floating currency. That the whole 122 was back when we were on the gold standard and you had these currency issues. We don't have any of that anymore. And so the whole thing is silly that they're now saying, oh, balance of payments crisis and we're going to invoke these tariffs. So I think on the economics and on the history, the tariff opponents have a great case. I do, however, question, I don't know if the courts are going to be willing to second guess the Treasury Secretary about these issues, right? Because the second issue is not

just whether you're right on the facts. It's whether the courts want to actually get involved in something like this, right? This is different from Aipa, where it's really a statutory case. And in fact, apologies to some folks who think this was close. It really should not have been close. Like the statute doesn't do this, right? And 122 is slightly different in the sense that it's really about an administrative termination of what's a balance of payments crisis. And is this happening? So I think the courts will be skeptical of this, but I don't know for sure. But that's the next fight. I would expect to see a lawsuit. suit filed somewhat quickly to find all this out. I doubt today, because you just got the custom stuff. You need basically people to start paying duties. You also need to find a plaintiff. So that'll take a little bit of time, but I imagine this will get litigated pretty quickly. And then the one last thing I'd note, I think one of the most interesting things, aside from

who's going to sue, is, is the court going to issue an injunction to stop duty collection? Because they did not do that last time. And that was because the government said, oh, we'll refund all this money, so it's fine. Just let us collect. Well, now, first of all, we have $175 billion worth of tariffs to deal with, duties that have been collected to now deal with. It's a mess. I think everybody can agree.

And the government is now, the Trump administration is now saying that they're actually not going to make it easy to refund the money. We can talk about that in sec. So I am wondering if the courts say, oh, to hell with this. We're enjoining and will that end up maybe back at the Supreme Court? No idea. So that's 122. There are other tariff actions if you'd like. I can go into that, but I've been talking for a long time. Well, let me just offer some context. And Scott, correct me, if you think that this is wrong. We have some numbers here from the Tax Foundation,

nonpartisan analysts do really good work on taxes sort of broadly, looking at the effects of these tariffs and what it means. And they have put together a chart. We'll throw it in the show notes, showing that the weighted average applied tariff rate in 2022 was 1.5. percent. The total with IEPA before this decision was 13.8 percent. So a massive tax increase. If these tariffs go away as we expect and the administration in fact follows through by adding the section 122 tariffs at 15 percent for, as Scott says, 150 days, that would take sort of the weighted average to 12.1 percent. And then after they, expire, they would still be at 6.7%. So you're talking about major increases in tariffs,

kind of regardless of how this nets out, even in the post. It's not like, I just want people to understand, it's not like we got this Supreme Court decision and this stuff is going away. They are going to find any and all other possible ways to do this. Yeah, and we knew that going in. If we start from what I think we can now call Linsicum's law, which is he just likes tariffs. That's the reason we're doing all of this. Let's stop with all the 3D chess stuff. He likes tariffs. They're going to use whatever lever they can use to implement them.

If we understand that, then, yeah, it was obvious that they weren't going to go, oh, you got a Supreme Court where there's not an emergency, whatever. No, they're going to abuse whatever statute it takes to fulfill the president's wishes. And I think the other really important thing here is that this is actually why the IEPA case, I think, was so weak, is that this is not. actually about tariffs. The Congress has delegated to the president. Vast swaths of tariff power. And in my opinion, way too vast. I can point out massive problems with a lot of other tariff laws out there. And I have. And that's why he should never have gone down this road in the first place.

If he was getting good advice, and I really mean this, he would not have ever done the emergency stuff. he would have done a much more systematic litigation-proof strategy that actually would have achieved the same amount of protection, given him a lot of leeway to negotiate these deals that he loves to negotiate real or fake they may be, but would have been much more bulletproof in the courts. And instead, he went with the Aipa route and cost himself and his mission a year plus.

And now we're going to fight over a refund and I think it's going to be a massive political issue in the midterms. In fact, the Democrats have already said this is just, I mean, they're chomping at the bit. This is going to be a huge issue for them if they resist giving this money back. Yeah, John, what are the implications here on the expected refunds? You know, one of the arguments that Justice Kavanaugh made, and I think it was maybe the least compelling argument I read of any of the arguments was, boy, this is going to be messy. Maybe we ought not intervene here, which is just, so the president, you know, broke the

law, did things he was told he shouldn't do, told he couldn't do, but because it's going to cause this mess, and I'm overstating it, but not much, honestly. I think it was a really crummy argument. Yeah. John, when you talk to the folks that you interviewed for your piece, do they have expectations that they're going to see this money? Do you have a sense of how this works? I mean, it is a mess. Kavanaugh is not wrong about mass. He's wrong about whether we should then sort of shrug our shoulders and walk away. I will leave the legal question aside, but just based on talking to small business owners, yeah, a lot of them say this is going to be a total mess. For example, I talked to one guy.

It's a Franko Salerno. He owns a bridal store selling, you know, wedding dresses and tuxedos in Pennsylvania. And it's just very complicated. You know, he's basically told all of his customers that, hey, here's where the tariff is today. If it increases between now and when the dress is ready to give to you, I'm going to eat the cost. If it goes down, I'm going to issue a refund. So he's already been sending out $81 checks and stuff like that. The tariffs have been able to increase prices, $200, $300, $400, $400.

in some dresses. But it's very complicated. He said, for example, some of his designers, they're saying, this is a new price. They're not giving him a tariff price. So they're not going to give him a refund, and his customers are still going to expect the refund. So he said, Frank O'Slaren said, I think this might be a net loss for me because some of my customers are going to say, hey, the lower court just ruled, there are refunds. Where's my refund? He's going to go to his designers and say, where's my refund? They say, hey, we never charge you an extra tariff. We just this is a new price. And so, I mean, it's just so complicated. He says there are, you know, some dresses there's different products.

There's the lace from China and the bodice from Vietnam. And then it's all stitched together in Cambodia. And it's all very complicated on how this all works. And he was literally changing the price tags early on after Liberation Day and then sort of figured out sort of how to just be more consistent with it. But it is a mess for sure. I mean, obviously the ones that will get just simple refunds, you know, they sent in the $50,000 check.

They get $50,000 back. That'll be a big bonus to them. But it is a mess. But think of the time lost to the economy. Yeah. on business owners doing this stuff. I mean, people don't generally calculate that. It's hard to calculate.

It's hard to come up with. This is one of the things I think, you know, if you're in favor of government intervention in the economy sort of most broadly, these are the kind of arguments that conservative, classical, liberal, you know, free market economists have made forever, which is you have to count these hidden costs, too. And there are massive hidden costs for somebody like Frank to go back and figure out how he's going to issue these refunds rather than spend time trying to find, you know, better

materials for his dresses, that he can sell cheaper, that he can, you know, how to expand his sales, how to build what he's doing online. Like, he's not doing any of that. He's instead spending all of this time trying to deal with this stuff, BS, that the federal government has done. I mean, it's just a massive, massive waste. And the refunds, they can't undo the damage that occurred for a lot of these small businesses. I talked to another small business owner, Beth Benicki, out of Noco, Minnesota, Army veteran, 10 years after she left the Army, she became a mom for the first time, and she had this idea, hey, I'm going to stitch together some basically strings to an infant's sort of dining mat to keep the cups from falling off. The chair is called

the busy baby mat. She was on Shark Tank. She had finally ink deals to get into Target and Walmart in 2024 and 2025. She had five employees. When Liberation Day tariffs hit for her, she had a container of $160,000 worth of product in China ready to strip, but it would cost her $230,000 in a tariff to pay. And she didn't have that money. She had five employees. She's just a small entrepreneur. The product just sat there in China, just languished. She was out of stock for two months. So, you know, she couldn't afford the tariff. It ended up costing her more, probably, to let it sit there than had she been able to come up with the money. She would have been better up, but she just didn't have the money. She actually told me she spoke to Treasury Secretary Bessent last year at an event for, like the Chamber of Commerce in Minnesota. And you said, well, what about me? I'm so small that the American manufacturers who have this food-grade silicone, they say, we won't do business with you unless you have a $2 million contract with us. I have to go to China. That's the only place I can go.

And Besson says, well, you know, look to other countries in Asia that have a lower tariff rate. And Benachie says, I thought this was about bringing jobs and manufacturing back to America. What's going on here? So, I mean, and she had a layoff two of her five employees. They're not coming back. And she doesn't know. And the future, like I said, she's the one who says the last quarter of the year is when she has most of her sales, 40% of her sales. She needs to know right now what the prices are going to be.

She doesn't. She doesn't know if she's going to get her refund on what. And if she were a major corporation, she could. undoubtedly take some action against the government, right? She's not. It's going to be costly if she tries. She's joining a class action lawsuit to try and expedite this. And again, who knows how long that'll take to get decided. And this is honestly the double whammy of these tariffs. So small businesses get hit on the front end. They're put at a disadvantage versus the large guys because they can't switch suppliers quickly. They can't figure out all the tricks and the exemption. They don't have a lobbyist and all that kind of jazz.

But now on the refunds, they're also going to get hit. because the fact is that you're going to probably have to file a lawsuit to get your money back. Even if you join this class action, you're going to have to do some stuff. And the likelihood of that class action going forward, I think, is somewhat iffy. So you're talking about, we have about 600,000 importers in the United States. These are mainly small businesses. So far, there are only about one or two thousand lawsuits filed to get this money back. I imagine that's going to go up.

But there's going to be potentially tens of thousands of small businesses that are just never going to get their money back because it's going to cost them more to fight for their refund than the amount of the refund itself. You know, they're owed five grand by the government, 10 grand by the government. I mean, these are really small companies. It costs them 20 grand in lawyers. So they're just going to eat it. And that's why we are at Cato really, really hoping that there's an automatic refund. process for this. There's legislation that has already been offered on Friday to do this to effectively force the Trump administration. Trump administration could do this on their own. And they've told

the court that they were going to do refunds, but now they're apparently not. They're going to fight it. So legislation would force that. There are mechanisms for this. It is almost as easy as customs pushing a button and putting money back in American businesses' accounts. And hopefully some of that can move because otherwise, you, again, you have this double whammy for small business pay tariffs

and costs on the front end and then never even get your refund. I remember Treasury Secretary Scott Bessent saying on, Meet the Press on an episode that I was on after him, I followed him, saying, hey, don't do this to us

because we're going to have to issue refunds. And now they seem to be sort of hesitating on the refund question. Yeah, it's really disappointing. I mean, I wish I could say I was surprised, but the fact is that the government has repeatedly said to advance its legal arguments before the Supreme Court, the Trump administration repeatedly said they will give refunds.

And boom, they lose. And immediately Trump and Besson are saying, eh, we're going to tie them up in court for years. I've also heard that they're going to scrutinize everybody's paperwork and try to get them in bureaucratic. You know, oh, you didn't cross your tea and dot your eye, ergo you don't get a refund. And this, again, is going to,

really disproportionately burdened smaller businesses that can't fight it out. Costco, love them to death, they're going to get their refund and millions and millions of dollars back, and the little guys aren't. And by the way, Costco's probably not going to lower its prices or offer its customers like the wedding dress guy, a little bit of a tariff rebate, which, by the way, very cool economic story buried in there. And so Costco's not going to lower their prices. Trump's given him an excuse not to lower prices because he just announced new tariffs. And, oh, by the way, they're going to get millions more. The little companies that might compete, not with Costco, but you get the idea, they're screwed twice over. We're going to take a break, but we'll be back shortly. At MedCan, we know that life's greatest moments are built on a foundation of good health, from the big milestones to the quiet winds.

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about the essence of what it means to be human, regardless of our place and history. history. The film is directed by Oscar-winning filmmaker Andrew Stanton and stars Rashida Jones, Kate McKinnon, and David Diggs. Stream in the blink of an eye, February 27, only on Hulu on Disney Plus. Sign up at Disneyplus.com. And welcome back. Let's return to our discussion. Mike, let me ask you about the politics of this, if I can. There's some speculation that given the fact that the sort of net tariff receipts are going to be lower, notwithstanding all of the sort of chaos that we've just described about what's ahead of us on the refund question, but could end up, you know, freeing up some money in the economy that could benefit Donald Trump here,

could have a stimulative effect, Mike. When you talk to Republicans, are they sort of conscious of that? Are they thinking about it? We've had this weird situation on the tariff question broadly where I can say with great confidence that a majority of Republicans in Congress are not in favor of the president's tariffs. But only a few of them, three in one instance, six in another in the House of Representatives, have actually voted against those tariffs. And the president, after this decision, posted something on social media, going after Jeff Hurd, who's a member of Congress in Colorado, saying he's withdrawing his endorsement of Hurd and endorsing his challenger because, was heard was on the wrong side, according to Trump, of the tariff questions. How are Congress and

Republicans looking at this? I mean, unless you are a dyed in the wool, true blue believer in MAGA, I mean, Republicans are not, they're hiding their head in the sand about all this tariff stuff because they know the reality of the economics and the politics of it. By the way, I mean, you mentioned this about small businesses, really getting the brunt of this, and you hinted of this as well, Scott, customers too, like people who go out, like, they're not getting those refunds that the wedding dress purveyor is giving. And that seems to me like the reality that Republicans in Congress and Republican congressional candidates are going to have to deal with.

It feels like a mirror image or a sort of a compliment to the way that Democratic elected officials had to run on Joe Biden's economic policies. which were just making inflation worse, and they couldn't, like, what were they going to do? Were they going to throw their president under the bus? No, but they also have to deal with the political reality that things are more expensive now than they were, and they are more expensive, and it's very obvious

because just like with Biden and his sort of economic agenda, Trump is identified with these tariffs. He loves tariffs. He talks about how much he loves tariffs. He got, like, Liberation Day. Like, there's no hiding that this is a Trump, policy, and this is a Republican policy to implement these tariffs and all the uncertainty and higher costs as a result. And so what can you do? I think they just sort of are hoping it's

not as bad as it could be. They're hoping essentially that all these institutions, the Supreme Court financial markets, kind of rein in Donald Trump's own policy to save them from it. Yeah, and I got to say, you could not create in a lab a worst, political story than this could be this year because you have consumers aren't going to see lower prices and they have no legal recourse other than they have a political recourse, which is the ballot box. Small businesses could end up again being disproportionately harmed, not to mention the businesses that are already bankrupt. They get nothing, right? Big businesses are going to get their tariff refunds eventually. But even worse, a bunch of investment banks have bought

tariff refund claims. So they're going to be winning, too. So, I mean, every part of this, and a conservative Supreme Court told Donald Trump to give the money back, right? Politico had a piece over the weekend. Democratic strategists are saying half of our ad dollars are going to tariff refund issues this year. You can already see the Democrats mobilizing on the legislative front. Can't well set a letter to Bessent demanding refunds. Good luck getting that through the legislative process. it's going to be, you know, it's going to be bad for them. And all I can say is, hey, you made you're bad. And that's the result.

Maybe this is a unfounded concern. But one thing that does concern me and would concern me if I were a, you know, Democrat or a Democratic voter is, is that party kind of willing and ready to kind of make arguments in the political realm? And I think the answer is mostly, like, they just have to let the Republicans kind of fall on their faces, which they are on this issue. issue, but there is, I think, a lack of proficiency in the language of, like, free trade and certainly market economics that is concerning. Yeah, but here's the thing. They don't have to be free traders here.

And unfortunately, they're not. You know, they are reluctant tariff opponents. They'll always say, I like tariffs fine normally, but these tariffs, these tariffs are bad. And I have seen a bit of a change of heart in some Dems, but a lot of this is still the former script. But they don't even have to campaign on free trade here. All they have to do is say Trump lost, he owes all this money, he won't give it back, and it's killing small business, and it's keeping prices high the end. They don't even have to get into the rest of it. And, I mean, it's a pretty simple to understand message, and it checks a lot of boxes, even a lot of populist boxes.

It may be too late, but Republicans, of course, could always default to, you know, doing the things that the Constitution would have them do as members of Congress and saying what they believe. I mean, it's never too late to actually say in public what you believe. We're going to leave it there because I want to leave enough time today for not worth your time. I was thinking over the weekend, I was thinking about you a lot, Scott, over the weekend. And I was thinking about you in the context of a movie I saw. Now, regular listeners will know that I'm not much of a movie buff.

I don't go to see movies. I'm not conversant in the kind of, especially the sci-fi. fantasy stuff that everybody else around here seems to like not my world the movies i've seen however are almost all of the movies that you can get on southwest airlines because if you fly a lot you have a limited selection and i think there are probably of the 120 plus movies on southwest i think there are ten that i haven't seen and probably will never see so one such movie that i watched not long ago within the past six months was a movie called trap did any of you see it? Any of you hear of it?

Okay. It stars Josh Hartnett. Oh, yes, yes. Long time heart throb. He was in Black Hawk Down. I think he was one of his first big ones. And he goes, he takes his daughter to a concert. And he is, however, a serial killer.

And he takes his daughter to a concert while the FBI tries to catch him at the concert. And he has to do it without revealing to his daughter that he's a serial killer. killer. So Scott, this is what I imagined you doing this weekend, even though you're not a serial killer far as we know. Thank you. Thank you. Because you took your daughter to, I think you said it was her first concert over the weekend. So two questions to you, what did you take her to see? And how was it? Yeah. Three questions. What did you take her to see and how was it? And what was the first big kid concert you went to see? Yeah. So the band is called the Runarounds. For those of you who have Amazon Prime, it actually was a television show.

It's a kind of coming-age story about a bunch of misfit seniors who start a band out in actually Wilmington, North Carolina. It's one of the reasons we decided to watch it. And we noticed in the show the music was actually pretty good. And I saw that it was coming to town. My daughter loved this show. And so I took her Saturday. And it was actually pretty good.

Nice. Good musicians. Good kind of pop beat. rock music, so I wasn't forced to listen to, you know, the kind of 13-year-old girl Drek that is out there. The venue was relatively easy to get in and out of. It was standing room only, but that's fine. We just stood in the back, and it was great. It was only 90 minutes, so it was done at 10.30. I was in bed by 1115. I mean, good victory for... This sounds like a total win. It was a total win. And... You get dad points? And yeah, I got dad points. And I actually enjoyed myself.

other than the $18 beer I had. I mean, it was like, I couldn't believe it. I got the bill. I'm okay, I just spent $18 on a beer. Any of that related to tariffs? Is it just, you know? The aluminum.

Is this the greed that the Democrats have been telling us about? Yes, corporate greed at the old Ritz, Raleigh. But so overall, an excellent time, a good show, and actually, a good band, if they're coming to your town, it actually is a good show. The actors on the show are the musicians who are on the stage.

Yeah, so they're actually real musician. It's like the monkeys. This was a spinoff of the Outer Banks, which is another teen drama. They found real musicians for that show. They spun that off into a show called The Runarounds. It's a cute show, you know, stoner dudes, getting their act together and making it big,

kind of sort of maybe. Only a Cato guy would say it's a cute show with stoner dudes. I mean, come on. Leaning in. It is 20. It's 20, so. guys. It's over. We won. Anyway, so it was actually, it was a good time, good show.

If you like kind of surf rock, you'd probably like the music, too. Now, for me, my first show, George Michael Faith at Texas Stadium. What? Did you have to go out because of a date or something? Did you lose a bet? I was like in seventh grade, a friend got tickets. And by the way, I take a little bit of offense at the indirect slag there of good old George Michael. He has some pretty excellent songs if you go back into his catalog.

Freedom. Freedom 90 is one of actually my favorite guilty pleasures. But anyway, that was my first show. It was great. You know, in seventh grade, when a guy gets on stage singing, I Want Your Sex, and there's a laser guided woman walking. I mean, this is like amazingly great stuff. So I remember it vividly. I wish I still had the bandana because I was too, you know, I was not a rich kid.

I didn't have enough money to buy the t-shirt, but I did buy the bandana and I lost it, unfortunately. Well, I mean, look, first, huge credit to you for admitting that. I mean, that's really amazing. I could have lied and said Lollapu's a 92. Right, exactly. That's nonsense. No, I give you credit for that, but wow, do you still have horrible taste in music?

No, look, I am a Gen X guy, 90s alt rock, creeping into 2000s, Britpop, and then hip hop as well from, again, 90s, early 2000s. That's my absolute go-to zone, because look, we all love the music of when we were at our absolute, you know, physical peak. So for me, that's 98, baby. Mike, I think your kids are probably too young to have been taken to any real concerts. What was your first concert? So it's interesting because I think there's been a change in trends or actions here on concerts because I can't remember a time where like parents were taking their kids to concerts. Like that, like concerts were something that you were, you know, at earliest dropped off at

and then later, like, you might actually drive to, like, in high school. So, like, I didn't go to concerts before I was, I think my first concert, I was 15, and I was dropped off. This was in at Stone Mountain Park outside of Atlanta. And I saw, I was 15 years old, I saw three doors down, who's front man, we, we just lost a couple of weeks ago, sadly, died of cancer. But three doors down, when they were sort of at the peak of their powers, and there were a couple of other, Cedar was there, shine down an, and, you know,

Our Lady piece. So it was a real butt rock, as they call it, that kind of early 2000s. You'd explain what that as for the listening audience. Sorry, it's basically the late 90s, early 2000s, kind of mainstream rock. Nothing but rock. Nothing but rock is what they would say on the radio stations. And that's the kind of music that was playing. So I saw that. I was dropped off. There were like 40 kids from my high school at this concert. And it was in a field in this park. And it was great. And I just don't remember parents going to concerts. with the kids.

And so I can't even conceive of when I might do that. I got boys and they're just like, they're not, you know, so there's a less likelihood of like teeny bopperism. And so I don't know. I think 15 is a good age. I don't know. Scott went to George Michael, so there might be some teeny bopper.

I went to Sesame Street Live when I was three. And he was, you know. John, what was yours? It's hard to say. I mean, from age five to 18, I went to Summerfest, which is this great music and food festival in Wisconsin where there are, you know, eight different bands playing on different stages.

I don't recall any of them by name. I didn't go to any of the main headline events. So I would have to say my first concert would have been opening freshman weekend at college at George Washington University. The band Guster was playing, which is an alt-rock band. I like a lot just because, again, actually while I was going

to orientation that June, my two cool music friends, two my best friends, Eric and Stephanie, they went to a Guster concert in Minneapolis, the two of them. And I came back from orientation saying, hey, this band's playing, at my opening weekend. So that whole summer, my two best friends and I listened to that all summer, and I listened to it opening weekend. I saw them play at George Mason in that spring, and then I saw them play deliberately at Summerfest that following summer. So I now have a

Guster T-shirt that is 22 years old. Great band, by the way. I've heard them live too. The way you make sure that a T-shirt can last 22 years is to have several years where you can no longer fit into it. So that's why. It only has one hole. Yeah, don't wash it much. It only has one hole in the armpit, but I do have my Kelly Green Guster t-shirt. And again, it's one of those, the band that you listen to in your 18 with your best friends and your freshman year of college, you're immediately transported back to those years every time it comes on. Summerfest is great. By the way, I can back John up on that. I can't tell you, I've probably seen three, four dozen concerts over my lifetime at Summerfest because it's just what you did growing up in

Milwaukee. My first concert was at Red Rocks, which is pretty amazing. And it's like nothing really measures up. It was this four-man acopella group called the Nylons. My uncles took me to it. Scott, don't give me that eyebrow. It's way better than George Michael. They were really great. My uncles took me to it. Can you need an audience vote on this?

It was a terrific, terrific, terrific concert. My mom also did take me to see a French electric violinist named Jean-Luc Ponty because I was playing the violin at the time, and I thought it was great. So, Mike, my mom did take me to a concert. back. Hey, that's good. Good for her. And yeah, and kudos to her. It kept me playing the violin all the way through high school. And then my, my first concert with my kids, I think we just took the two older kids. We went and saw one direction and spent way too much money doing it because the concert from basically from my perspective was standing. It was at the what is now, I think, Capital One Arena, where the Washington Capitals played. And it was 30,000 teenage girls screaming at the top of their lungs for two plus hours.

Like, picture the clips that we've all seen of like Elvis or the Beatles. That's what this was for two straight hours. And it may have been better than the music, actually. So I suppose in some cases I should be, maybe I should be happy that I wasn't subjected to music. But it was a lot. I definitely got off easy with my daughter's concert. Yeah, if you like the music, that's a good first time out. All right, well, thank you, Scott, for coming on and sharing your wisdom on tariffs

and everything related to tariffs in the economy and sharing your embarrassing story about your first concert. Not embarrassing. You really appreciate it. You should try to recreate that bandana. You can wear it on the next time you're on the dispatch podcast. I'll do it. All right, thanks all. And finally, if you like what we're doing here, there are a few easy ways to support us.

You can rate, review, and subscribe to the show on your podcast player of choice to help new listeners find us. As always, if you've got questions, comments, concerns, or corrections, you can email us at Roundtable at the dispatch.com. We read everything, even the ones from people who still listen to George Michael. That's going to do it for today's show. Thanks so much for tuning in. And a big thank you to the folks behind the scenes who made this episode possible, Marguerite Howell and Peter Bonderventure. Thanks again for listening. Please join us next time.

Thank you.