The Truth with Lisa Boothe: Trump Tariffs After the Supreme Court: What the Ruling Means for Trade, China & U.S. Jobs
2/24/202626 mincomplete
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0:24Welcome to The Truth with Lisa Booth, where we get to the heart of the
0:27issues that matter to you.
0:28Today we're talking tariffs, more specifically that Supreme Court decision 6 -3 that President Trump
0:34can't use IEPA to impose his tariff strategy.
0:38What does this mean for the president?
0:40What does it mean for his leverage moving forward?
0:42We're going to ask Nazak Nikitar.
0:44She's the former Undersecretary of Commerce and an international trade attorney.
0:48She worked during President Trump's first administration.
0:50So we're going to talk to her about his trade strategy.
0:54What does it mean? Why did he do it in the first place?
0:57What do you need to know at home?
0:59There was also a report recently that there has been a decoupling from China as
1:04a result of President Trump's trade policies.
1:07So how important is that?
1:09And what does this all mean moving forward?
1:11I'm sorry, but tariffs, they're complicated.
1:14Trade, it's complicated. But Nazak is going to break it down for us.
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1:36Well, Nazak, it's great to have you on.
1:39I interviewed you recently on Fox Business.
1:41And it was after the IEPA Supreme Court ruling.
1:45And you just did such a good job explaining everything.
1:48And I feel like tariffs and trade and all this stuff is so complex.
1:52And you just did such a great job of explaining it in layman's terms for
1:56the rest of us. So I appreciate you coming on and making the time.
2:00My pleasure. Good to be with you again.
2:02And thank you for having me.
2:03Oh, well, thank you. Well, I guess walk us through real quick what the Supreme
2:07Court decision means for President Trump's tariff strategy and no longer being able to use
2:13IEPA. Yeah, I mean, what the Supreme Court ultimately did was it just said, you
2:17know, the IEPA authority is just to sort of limit transactions, stop transactions.
2:23You can't put tariffs on things through the IEPA authority.
2:27And that's really all it was, was just setting guardrails on, you know, if you
2:32want a tariff, you can't use this authority.
2:34But it didn't say that the president doesn't have tariff authority.
2:38The president has vast tariff authority.
2:41And so could the president quickly pivot to the range of other authorities he has,
2:47you know, beyond the traditional sort of the way we think about tariffs, the trade
2:51remedy, anti -dumping, countervailing duty tariffs.
2:53Does he have Section 232 national security tariffs?
2:57Section 301 trade retaliatory. If our foreign trading partners' practices harm us economically, we can
3:03retaliate. Discriminatory behavior by our trading partners, we can tariff that too.
3:08And so, and of course, as we see now, the balance of payments tariffs.
3:12So everything that the president wants to tariff, he has other authority to do it.
3:18So I think he's moved past it.
3:20And I think he was right.
3:21He said, look, the Supreme Court just has emboldened me to use other authorities that
3:27I actually have. And I think he's going to proceed in doing that.
3:30And I think that there's enough cause for him to want to use tariffs as
3:36leverage to get corrections from our trading partners.
3:39Discriminatory behavior against us. You know, it's interesting because when you were on, because at
3:44face value, you know, you look at some of these other legal avenues, these different
3:48sections that President Trump will use is using, as you mentioned, sections 122, 301, 232.
3:55On their face, like they seem limiting in the sense of like with 301 and
4:00232, you've got to do like these investigations.
4:03And then with 122, you're capped at 15 percent and there's an expiration date.
4:07And so on its face, these seem more limiting than what he could have potentially
4:11done under or what he was able to do under IEPA.
4:14But you said on when I was co -hosting that that's actually not the case.
4:19So why isn't it the case and why is it not limiting for him?
4:24Yeah. So and that's a good way of sort of putting it.
4:28It's not limiting in terms of the scope and the height of the tariffs.
4:35The only constraint in consideration is it's a little bit more documentation, right?
4:40A little bit more processes rather than just sort of a quick proclamation.
4:45So to give you an example, sort of the 232 tariff authorities, national security based,
4:51imports of articles and then their derivatives.
4:55So imports of the thing and then if that thing is embedded into a downstream
4:58product, those can all be tariffed if they're important to national security.
5:03And then the tariffs apply globally.
5:06Now, does the administration have to conduct an investigation and does it have 270 days
5:11to do a 232 investigation?
5:13And certainly does it need to do to does it need 270 days to conduct
5:18a 232 investigation? Absolutely not.
5:20The Commerce Department, USTR, they look at these.
5:23sort of distortions constantly all the time.
5:26So long as the administration, you know, looks at sort of maybe some third -party
5:30reports by think tanks and then supplements it with its own data and puts a
5:34cover memo on top of it, especially since the 232, like IEBA, isn't subject to
5:39the Administrative Procedures Act, which has all of these sort of additional requirements, process requirements,
5:45the president can go out of the gate within just a few weeks with a
5:49whole bunch of new section, new tariffs under the Section 232 authority.
5:53The other one that's pretty nimble, and those authorities don't have timeframes.
5:58So long as the national security harm exists or threat exists, those tariffs can continue
6:02and there's no cap at the level of those tariffs.
6:06Same with the sort of this authority that the president hasn't used before Section 338
6:11of the Trade Act. It's an old authority.
6:14It's never been used before to impose tariffs, but it's dormant in some respects, but
6:19it is still valid law.
6:20And all that requires is a presidential determination that foreign trading partners have discriminated against
6:27us. And then he can impose tariffs indefinitely for as long as that discrimination continues.
6:33That one is capped at 50%.
6:35But those are just two of the several authorities he has.
6:38And I think he can execute 338 pretty instantaneously.
6:42And then the 232 is just a matter of weeks of putting together a report
6:46and some data and a proclamation that goes with it.
6:49Yeah. I think the challenge with tariffs, it's rather complex.
6:53And even when you get down to like trade deficits.
6:55And so I think the American people, they don't really understand it.
6:59And the challenge with that is, I think, you know, after Liberation Day, President Trump
7:04sort of took authority over the economy, even though he's still trying to fix what
7:08Biden did because of tariffs.
7:10I guess walk us through, like, what's the purpose of President Trump's tariff strategy?
7:15Why was it necessary? What's behind it?
7:19You know, I think I commend the president.
7:22He's the first president who's decided to take on this ever ballooning American debt.
7:27$38 .7 trillion, $6 .4 billion accumulating on our national debt per day.
7:36That puts downward pressure on the currency.
7:39And that debt is financed by borrowing from abroad.
7:43And it also signals sort of a downward trend in jobs.
7:46It signals a downward trend in manufacturing and increased reliance on foreign goods.
7:52When I articulate all of those, nobody can credibly say any of those things are
7:57good for America. Yet why, year after year, you know, prior administrations and Congress have
8:03ignored this ballooning debt. So one way to sort of correct for this debt is
8:08to impose tariffs. What do the tariffs do?
8:11They slow American importation of goods.
8:14And then under President Trump, he's looking at deals, you know, if foreign countries want
8:20or companies want exemptions from tariffs, and then they have to invest in the United
8:23States. Increased FDI offsets the debt that we're in.
8:28And then obviously slowing tariffs slows down the deficit and the debt.
8:33That's sort of the economic side of it in terms of the national debt.
8:37But when I give you examples like the Europe, Europeans, in terms of their discriminatory
8:42practices against US autos, I wrote the autos investigation in the first Trump administration, and
8:48the importation and the hollowing out of the American auto industry with its nexus to
8:53the defense sector, it's important for national security.
8:55We're becoming assemblers in the United States.
8:58The Europeans, also the Japanese and South Korean, imports have sort of suppressed domestic prices,
9:04such that the component producers, the cool components in cars that are getting gadgety and
9:10have more compute power, those are getting more expensive because they can do cooler things.
9:16But because import pressures have kept car prices flat, those component producers are offshore because
9:22they now can't sell to the American OEMs at their increased prices because the OEMs
9:28here are getting crunched on import prices.
9:31So the component producers are getting this cost price increase in cost counts translated to
9:36increase in prices. So they're offshoring, which has led us to becoming to assemblers.
9:42What's even worse is when you look at a country like a region like Europe,
9:46they discriminate against American cars in Europe through standards.
9:51Then when they do trade agreements with foreign countries around the world, they force them
9:56to adopt the discriminatory European standards that discriminate against American cars.
10:02So now not only do we have Europe that's discriminating against us, but Europe forcing
10:07its trading partners to discriminate against us.
10:10And then when we're doing these tariffs in the first Trump administration, Congress said, well,
10:14do you think our trading partners are harming national security?
10:17And my answer was resoundingly, yes, they're dumping steel into the United States, they're dumping
10:22an aluminum, and look at what happened to the car to cars.
10:25We have a lot of bad behavior by our trading partners to correct.
10:30And I commend President Trump, which has been the only president to date who's been
10:34taking the bull by the horns and take tackling these issues.
10:37They might be in the short term unpopular, but I think once the American public
10:41realizes what's happening, they will be supportive.
10:44You know, because right now, you know, you've got critics saying it's a tax on
10:49American goods. That's sort of the narrative from the left heading into the midterms.
10:54You've got groups like the Tax Foundation that say in 2025 that the Trump tariffs
11:01amounted to an average tax increase per U .S.
11:03household of $1 ,000. What do you say in response to that?
11:08And, you know, is it a tax on American households?
11:11You know, what I find really cute, these sort of economists just kind of make
11:15up formulas and make up math.
11:17And I say that as an economist, but I certainly don't do that.
11:20Make up formulas and make up math to be very self -serving.
11:24I'll give you two probative pieces of information.
11:27One, a lot of importers have actually acknowledged the fact that because of the tariffs,
11:32they've been able to negotiate with foreign exporters to reduce their export prices to the
11:39United States so the importers can better absorb those tariffs.
11:42And so those tariffs, the incident and the tariffs is not being passed to U
11:46.S. customers in that arrangement, which means the foreign countries are bearing the brunt of
11:51the tariffs. I love that.
11:53Number two, I just looked at the CPI, the Consumer Price Index, and the Producers
11:58Price Index for the White House.
11:59They had asked me to look at a few data indicators for them.
12:03And the CPI and the PPI, they're both within our target inflation rate of 2%.
12:09They're slightly above 2%. But they've moderated significantly from the 2022 -2023 highs, 7 %
12:17to 9 % inflation during the Biden administration.
12:20And now we're around the 2 % target rate, hovering at 2 .7%.
12:26That tells me that the president's trade policies have done just the opposite.
12:32They haven't caused inflation. They've actually worked to moderate inflation.
12:37And why is that happening?
12:38Wages are going up. More manufacturing is happening in the United States.
12:43Consumers can better absorb any small price increases.
12:47But as I just mentioned, the price increases haven't been what we see across the
12:52board because of the CPI and the PPI indicator.
12:56So economists can just make up numbers, but the proof is in the pudding.
13:00And the pudding is the CPI and the PPI, which are significantly below the Biden
13:05administration. And thanks to President Trump, he's moderated that in 2025 with his policies.
13:11You know, what happens, I think it's like some of you would know, $175 billion,
13:16right, under the IEPA? Yeah, $177 plus.
13:20Those are just rough estimates.
13:22Yeah, I've heard different numbers, but roughly around there.
13:25So, you know, all that money has already been collected.
13:27So, like, what happens after, you know, what happens now with that money?
13:33Yeah, that's a big sort of focus of debate.
13:37I think there's going to be three likely scenarios.
13:41I think, one, the administration could just set up its own process.
13:44The Department of Justice has already articulated that it intends to comply with the Supreme
13:50Court's decision. So could the administration set up its own process to start issuing refunds?
13:56Yes. Two, option two, which I think is more likely, is that the U .S.
14:00government, the administration is going to wait for the Court of International Trade to issue
14:05an opinion on, you know, how refunds should be administered.
14:09And so I think they're waiting for that.
14:12And then if they need to, they'll set up a process or they'll just have
14:15litigants litigate to get tariff refunds on an individual -by -individual basis.
14:19What I think is also equally likely to happen is, in addition to the administration
14:26just waiting for the court to issue an opinion on how the process should work,
14:31I think that they're also going to look at ways of disincentivizing companies from recovering
14:38the tariffs. And there's a really rational basis for doing this.
14:42These tariffs, these AIPA tariffs were imposed to deal with a national security emergency, whether
14:47it's fentanyl, the border crisis, you know, India not buying Russian energy.
14:52Those emergencies haven't gone away.
14:55So if the president, the president could very easily articulate and say, listen, I have
15:01to, I was trying to deal with emergencies through punishment, economic punishment to these countries.
15:06Now that the court has taken that power away from me, the emergency still exists.
15:11And now I have to recoup the amount lost from the punishment by paying those
15:15back. So I'm going to now proceed with new authorities in a way double the
15:22level of punishment for a period of time on these countries to make up for
15:26the fact that the court made me lose time.
15:28Companies, if you agree to not seek a tariff refund, all for a period of
15:34time, lower your punishment, lower the tariffs you have to pay now that the president
15:38feels like he's almost has to, for about a year, double the punishment to make
15:43up for the lost time in 2025.
15:44And then companies, if you agree not to seek refunds, maybe I'll reduce the forward
15:51looking tariffs because you've, you've allowed me to keep the backward, the 2025 tariffs, if
15:56that makes sense. I can very much see him doing that.
15:59And I don't think he would be wrong in, in asking companies to cooperate with
16:04him that way. Quick break more on the other side.
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16:28Yes, it was reported that while President Trump's tariffs helped lower the trade deficit with
16:34several major U .S. trading partners, the total U .S.
16:37trade deficit for 2025 slipped by just 0 .2%.
16:41Does that tell the full picture or can you unpack that for us?
16:45Yeah, I mean, I think that the trade there's, you know, it takes a while
16:50for the economy to adjust.
16:52And I think just because the trade deficit was reduced slightly, you know, we're not
16:56going to have overnight impacts if we're going to reduce our reliance on imports.
17:01Companies have to shift their supply chains.
17:04They have to requalify products.
17:05They have to find alternative sources in the United States.
17:09And if we don't have adequate capacity in the United States to be alternative suppliers
17:13from within our own borders, then we've got to build up those supply chains.
17:17So the fact that it's going to take a little while to sort of real
17:22see dents in the trade deficit doesn't mean, right, that not to suggest that you're
17:27saying that, but to those detractors, it doesn't mean that it's not working.
17:31It just means that the supply chain needs to shift.
17:35Manufacturers have to change their behavior.
17:36Products have to be qualified.
17:38We need to build more here.
17:40But once we do that, and you don't take the foot off the gas pedal
17:43because you're not accelerating in half a second, you keep your foot on the gas
17:47pedal because you know that that accelerant is going to ultimately happen.
17:50And again, pointing to the data that we talked about earlier, $38 trillion debt, the
17:57downward pressure on the currency, the more import reliant that's making us look at what's
18:02happening with China. I think we need to do everything we can to incentivize more
18:07domestically sourced goods, certainly for national security and defense capabilities as well.
18:12You know, and on that with China, there was a new analysis from JPMorgan Chase
18:17Institute that found that the tariff strategy has driven a wedge between businesses, American businesses
18:26and Chinese suppliers. There has been some decoupling as a result of these tariffs.
18:30What's the significance of that?
18:32And how significant is this?
18:34China is unlike sort of any trading partner that we've seen before.
18:38When it captures supply chains, it's demonstrated that it's willing to use it to harm
18:43American interests. So I think businesses have been clear -eyed.
18:47I remember in the first Trump administration, we were talking about the risks of China
18:51and everybody looked at us like we had, you know, five heads.
18:55But I think as they've come to themselves witness China's unfair trading practices, the administration,
19:03first administration ever to call this stuff out, companies then started taking notice and then
19:08slowly started realizing, wait, the administration's right, that China is stealing our IP, then they
19:15indigenize and then they wipe us out.
19:18I think companies started realizing that there's a problem.
19:21Different companies reacted at different sort of paces.
19:24But I think the move is happening away from China and whether, you know, whether
19:31impose higher tariffs, the administration ultimately on China or not, I think businesses now realize,
19:38especially with the magnet situation, that increasing or keeping reliance on China is a really
19:44risky proposition. They're seeing that now in the battery space where China has such a
19:48stranglehold over the battery supply chain and we're just not going to be able to
19:52move ourselves in the immediate term away from Chinese batteries unless we have more domestic
19:58capacity and technology growth. I think companies are, because they're being so heavily impacted, they're
20:03really seeing that there was a merit to doing that.
20:06And they're choosing sometimes to decouple themselves because of those risks.
20:10Well, yeah. And we've seen China threaten us before with like antibiotics during COVID and,
20:16you know, kind of holding that power over our heads when they're rightfully facing criticism
20:22for unleashing it on the world.
20:25And even in one thing I just want to sort of emphasize is even about
20:29things that we don't see publicly when companies do their own independent negotiations with the
20:34Chinese, when the Chinese realize that they have the supply chain, they put some pretty
20:38onerous and oppressive terms on American companies who just simply need a battery, right, for
20:43medical equipment, et cetera. And so I think that realization, things that we don't necessarily
20:48hear about publicly, because these are just agreement by agreement between two companies, I think
20:54that is really spooking American companies to move away from China.
20:58Are we still dealing with a supply chain crisis from COVID?
21:02You know, that's, I don't think that the two things, I don't think that the
21:07supply chain crisis is there anymore with the level of acuteness or really to any
21:15significant material degree at all.
21:17I think what's remained is a little bit of the PTSD that big companies realize
21:22that if they don't start finding domestic sourcing now, that they will be in jeopardy.
21:28But the other thing that has been a little bit of awakening for companies and
21:32industries, and certainly in the U .S.
21:34government, is that even our trading partners, you know, during COVID, we couldn't get a
21:39lot of aerospace parts out of Mexico because they had sent their factory workers home.
21:45And then that impacts. impacted our commercial and military readiness in the aerospace and defense
21:50supply chain. And so even when we do have trading partners that we generally more
21:57or less trust or we have trading agreements with, I think the government has realized
22:00that we need to build in more and more into these trade agreements that they
22:05won't, to the extent that there's a pandemic or some global crisis like that, they're
22:10not just going to arbitrarily restrict us from having critical supply chains that we rely
22:14on them for. That also feeds into the narrative of, do we really want to
22:19rely on foreign trading partners for things that are critical to national security?
22:23Adam Smith, the father of free trade, even underscored in his book, Wealth of Nations,
22:28that a country should not depend on its neighbors for things that are critical to
22:34national defense. And I think COVID was an important awakening there.
22:38Before we go, to what extent have the, you touched upon it a little bit
22:43earlier, but to what extent have these tariffs brought manufacturing back to the United States?
22:49You know, how long of a road is that process?
22:52You know, let me, I want to answer this, but by one, something really important.
22:58The, in the first Trump administration, I was speaking at an event about the 232
23:03tariffs. I had to defend those a lot until the world started understanding the merits
23:06of them. And a gentleman in the front of the audience asked me, he said,
23:10do you know how much the Trump tariffs are costing the average American family?
23:14And I responded by saying, do you understand how much foreign countries' predatory economic practices
23:19are eroding wages such that mothers and fathers have to work multiple jobs now to
23:25have enough money to have the dignity to put food on the table for their
23:28families and pencils and their children's backpacks to send them to school?
23:33Well, that got him real quiet.
23:35My point is this, and I'm glad you're asking this, because we have to get
23:39our manufacturing industry up and running.
23:41In some of the poorest parts of the country, there's one manufacturing facility, and if
23:46that manufacturing facility goes, the workers there don't even have options.
23:50We need a manufacturing renaissance in the United States, and the president has initiated that
23:56with, you know, forcing countries to rectify their economic harms to the United States of
24:03the past by investing in critical capabilities here.
24:05We need more jobs, and with more jobs, we should be, through tariffs, generating higher
24:11wages so we can get to that sort of American dream where in a family,
24:16one person, or maybe if both want to work, both want to work, but that's
24:20a family choice, not a necessity.
24:22And that comes with more manufacturing job options here and better wages, and those will
24:26come once we eliminate unfair trading practices that have significantly suppressed wages.
24:33In 1980, 70 % of an average American's income was spent on just necessities.
24:41In 2024, the expenditure of the average American exceeded income by 6%.
24:48That is how, it's not necessarily that we're buying more and more, we're buying all
24:53the cheap junk from China, so that's offset.
24:56But it's the fact that our wages just haven't increased with the amount that we
25:00need to, the natural cost increases today.
25:03So we very much need to tackle this wage suppression caused by foreign predatory economic
25:09practices head -on, and that's one of the things that the Trump administration is doing.
25:14Very interesting. Complex stuff. Thank you so much for coming on the show.
25:18Really appreciate you breaking this down for us.
25:20My pleasure, Lisa. Thank you for having me.
25:22Lizna Zaknikatar, former Undersecretary of Commerce for President Trump and also an international trade attorney.
25:28Appreciate her for coming on the show.
25:29Appreciate you guys at home for listening every Tuesday and Thursday if you can listen
25:33throughout the week. I also want to thank John Castio, my producer, for putting the
25:36show together. Until next time.
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