The US Court of Appeals for the Federal Circuit ruled that Trump’s use of IEEPA to impose tariffs on imports was likely unlawful. The IEEPA was enacted in 1977 to authorize the President to regulate international commerce during national emergencies. The Federal Circuit Court doesn’t believe that the U.S. was experiencing emergency status this spring and is therefore seeking to roll back the tariffs collected since Feb.1. So far almost $94 billion in additional tariffs have been collected, which would make up for almost 50% of the estimated $1.9 trillion deficit the U.S. is on track to incur this year.
I can certainly applaud the administration for seeking ways to lower the national debt load. The threat of it backfiring however and adding $1 trillion back to the 2025 federal deficit is causing Bond prices to decline and threatening interest rates to move upward. This being the first week of September, we will have a deluge of information on the labor market, which will be a big Factor in determining the likelihood and velocity of rate cuts as we head into the end of the year.
