Trump’s Tariffs Struck Down – What it Means to the Economy & To You – Top 3 Takeaways, September 2nd, 2025
Takeaway #1: That was a big one
It’s been 224 days since Donald Trump once again became President of the United States. If there’s been anything you could count on any given day (even on holidays), it’s that some (commonly left-wing) interest group is suing his administration...and often two. As of today, there have been 384 lawsuits filed against Team Trump’s administration for an average of greater than 1.7 new lawsuits per day. Suing has become the new form of lawfare by the Left. Also aided by having a majority of Democrat-appointed judges in federal courts, they’ve been highly effective in getting at least temporary victories until decisions have been heard by higher courts upon appeal. In total, out of the 384 lawsuits, only 25 have led to the subject of the suits being permanently blocked, with an additional 77 currently leading to temporary blocks of Trump’s agenda with 18 currently pending appeal. In other words, President Trump’s agenda has held up to legal scrutiny 69% of the time thus far. That’s a really solid win rate considering. But few of the legal decisions that have been rendered to date carry anywhere near the weight that the federal appeals court’s ruling on Friday, as we were ready to ride into the Labor Day weekend, could bring about. The three-page order with a 127-page opinion issued by the Federal Appeals Court said this: This case involves the extent of the President’s authority under IEEPA to “regulate” importation in response to a national emergency declared by the President. For many years, Congress has carefully constructed tariff schedules which provide for, in great detail, the tariffs to be imposed on particular goods. Since taking office, President Donald J. Trump has declared several national emergencies. In response to these declared emergencies, the President has departed from the established tariff schedules and imposed varying tariffs of unlimited duration on imports of nearly all goods from nearly every country with which the United States conducts trade. The Constitution grants Congress the power to “lay and collect Taxes, Duties, Imposts and Excises” and to “regulate Commerce with foreign Nations.” U.S. Const. art. I, § 8, cl. 1, 3. Tariffs are a tax, and the Framers of the Constitution expressly contemplated the exclusive grant of taxing power to the legislative branch. The court, in a much wordier fashion then went onto say that only tariff powers expressly granted to the president unilaterally were lawfully imposed. So, what did that mean?
Takeaway #2: Most of President Trump’s tariffs were struck down
Without getting overly wonky and too far into the weeds of policy, it’s like this... Currently 69% of all goods imported into the U.S. have a tariff of some sort being imposed on them as part of President Trump’s expressed “reciprocal” trade policy. Should this ruling hold that number would drop to only 16%. In other words, only 23%, or just under a quarter of President Trump’s tariffs would remain in effect. That’s a huge hit to his trade strategy, that’s a huge amount of leverage removed from the equation from President Trump’s ability to impose his Art of the Deal on trade policy. Now, here are the three important things to know going forward. 1) Nothing has changed as of today. The appeal’s court stayed their ruling until October 14th anticipating the Trump administration's appeal to the United States Supreme Court – which was immediately in motion following Friday’s ruling. So, for the next six weeks at least (unless SCOTUS works sooner) it’ll be status quo tariffs paid for all stuff imported into the country. 2) It’s possible President Trump wins before the Supreme Court in the end, but let’s say that he doesn’t... 3) It’s possible President Trump could focus on the specific types of tariffs the appeals court said were legal for Trump to act on unilaterally – significantly raising tariffs in those categories to attempt to achieve a similar overall effect (although it wouldn’t be as evenly effective because many of our trading partners don’t trade in those categories with us).
Takeaway #3: The implications
For now, there’s likely to be a lot of trade limbo. Why, for example, if you’re a foreign trading partner, would you sign some kind of permanent trade accord when it’s possible that very soon most of the leverage President Trump has used to exact outcomes could be removed? So, we’ve likely seen the last of meaningful trade policy changes until the Supreme Court weighs in on this. Big implications could also exist with inventories maintained by importers. Why, for example, would you place normal orders for imported goods if in a matter of weeks, you could order the same stuff for considerably less? For that reason, it's possible businesses run super tight inventories over the next month plus as they wait to see what will be here. That might mean we could see shortages of goods in certain categories based on the level of demand and decisions made by businesses in the coming weeks. The other significant impact could come in the form of the Federal Reserve’s interest rate policy. 90% of investors have now priced in an expected decrease in interest rates when the Fed meets on policy later this month. But based on Federal Reserve Chairman Jerome Powell’s previous commentary it’s rather clear that the Fed would have already cut rates if the tariff policies weren’t in place. It appears unlikely that the SCOTUS will have ruled by the Fed’s meeting at the end of the month, but based upon how the Fed feels about this – there could be the potential for interest rates to come down in larger sized cuts, or at least that we could see rates come down progressively in coming months and future meetings. Friday’s ruling will have a profound impact on all aspects of the U.S. economy, foreign trade policy, and revenues to the Treasury Department. In other words, it’ll have a profound impact on you – one way or another...stay tuned.