Name: How Trump's Tariffs Got a Reality Check
Uploaded: 2026-02-27T16:32:27.000Z
Duration: 11 min 20 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

For President Donald Trump, few things appear to matter more than tariffs.

Tariffs, reciprocal tariffs, a lot of tariffs.

Most beautiful word in the dictionary is tariff.

Now his signature policy has hit a roadblock.

Trump's biggest legal defeat since returning to the White House.

The Supreme Court striking down President Trump's tariffs, the major blow to President Trump's economic agenda.

Two thirds of the tariffs that that President Trump implemented in 2025 have essentially been ruled illegal.

That really has taken away one of the main ways in which President Trump has disrupted the global economy.

Today I will sign an order to impose a 10% global tariff under Section 122.

A day later, he upped the ante, saying he'll raise that rate to 15%.

But these can only stay in place for a maximum of 150 days.

What he is going to have to do now instead is use tariff authorities that are much narrower and in which he really has to prove an economic case for the need for them.

For US Trading partners around the world, it's causing tariff whiplash all over again.

So far they have moved to freeze the implementation of their side of the trade deal that was signed with the U.S.

there are a few countries that actually stand to lose despite facing lower tariffs now than before the ruling.

So countries like Vietnam, what they've lost is the comparative advantage that they had relative to China.

China is probably the biggest winner from this ruling.

Almost all countries and corporations want to keep the deal that they already made.

So how will this affect businesses and consumers or the trajectory of Trump's remaining three years?

And what happens when the 150 days are over?

We have maximum uncertainty over where trade policy goes from here.

This wasn't a battle before the Supreme Court between President Trump and China or a faceless corporation.

The main plaintiffs who challenged these tariffs were a toy company, Learning Resources, and

a whole coalition of other small businesses who really felt like President Trump and his tariffs were an existential threat to their businesses.

At the center of the fight was a law called the International Emergency Economic Powers act ipa.

It allows a president to regulate some aspects of commerce after declaring a national emergency.

Trump claimed that it gave him the power to immediately put a tariff of any level on goods from anywhere.

And the Supreme Court ruled that just wasn't the case.

What the court didn't make clear is what happens to the money already collected.

Essentially, the Supreme Court ruled that the US collected $170 billion in tariffs unconstitutionally.

Trump himself has indicated that this is going to take years of litigation to calculate and distribute refunds.

There is a possibility that could just be a very clean process.

The Customs and Border Protection knows who paid the tariffs and knows how to refund them.

There have been episodes where tariffs have been refunded in the past.

That's not unprecedented, that's not unheard of.

But the scale of this, I think, is unprecedented.

Think of it as the mother of all tax refunds.

Trump had promised that foreign countries would be the ones paying for his tariffs.

But as it turns out, the foreign exporters aren't eating the tariffs.

They're 90, 95% pass through to US importers and their customers.

Reducing the US trade deficit was one of Trump's stated goals with tariffs.

But in truth, they've barely moved the needle.

The United States last year in 2025 had a trade deficit in goods of around $1.2 trillion.

It was almost exact size as the trade deficit that it had in 2024.

The main impact we saw from the tariffs was to reshuffle trade away from China and towards Mexico and other Asian countries, more than reducing the aggregate trade deficit.

And so far, Trump's trade policies have failed to deliver on another long held promise.

Rekindling US Manufacturing trade policies will return significant manufacturing jobs to our country.

The problem so far for President Trump is that 10 years on, the situation in manufacturing doesn't look that much better.

In fact, in the last year, the US lost more than 80,000 manufacturing jobs.

That's even as these tariffs went into place.

A lot of manufacturers rely on imported components.

And if those imported components and big things that they use, like steel and aluminum, are more expensive as a result of tariffs, they can't hire more people, they can't grow.

More tellingly, if we separate that industrial production into industries that faced higher than average tariffs and lower than average tariffs, we see that any growth that was there was really driven by the lower tariff industries, things like pharmaceuticals, electronics.

Whereas the higher tariff industries think autos and metal sectors faced much slower production growth.

Manufacturing is no longer going to be a big source of employment.

The jobs that have gone, most of those jobs are not coming back.

The principal driver of that trend is not trade, it's technology.

But it's Trump's foreign policy, not domestic, that now may need to change the most.

The biggest blow to Trump from this Supreme Court decision is really how it hits his ability to shape geopolitics in the world.

He's used tariffs to threaten India and its Purchase of Russian oil.

He's used the threat of tariffs to also interfere in domestic politics, like in Brazil.

Those are all things he was able to do because of this authority.

He claimed, that gave him this kind of immediate ability to increase his leverage to apply pressure on other countries.

I don't think there's anything wrong by any means with an American president seeking American advantage.

The question is, are these methods working?

So if you think of Europe, if you think of Canada in particular, governments are weak in many ways in relation to the U.S.

is making are so off the charts in terms of their previous experience, I think they're struggling to process it.

You know, can we rely on the US Commitment in NATO?

The controversy that followed the president's demands about Greenland?

We want a piece of ice for world protection.

There were Europeans who were actually wondering whether at some point European soldiers would be fighting US Soldiers.

All of this is happening in the run up to the US Midterm elections.

Poll after poll shows that these tariffs are incredibly unpopular and that people associate them with this broader issue of affordability.

It's just another way that they see the government making life harder, raising prices.

Republicans should be asking themselves if they want to keep backing this policy, which is just meeting obstacle after obstacle when it comes to implementation.

Trump wants Republicans to win the midterm elections.

It's going to be harder for them to do so if a lot of voters don't like his signature economic policy.

And it's something the Republican Party can't ignore, since Congress has to approve extending tariffs once these first 150 days are up, a budget reckoning is looming, exacerbated by the possibility of the government issuing tariff refunds.

One of the big issues going forward is going to be the fiscal implications.

if that goes away because of refunds, then that's a new hole in the budget deficit outlook.

One of the major policies implemented last year was the continuation of tax cuts and other expansionary fiscal policies that would otherwise raise the fiscal deficit.

And the administration was really counting on this revenue from the tariffs to plug that fiscal hole and finance the fiscal deficit.

But even with tariffs, the numbers don't add up.

With the exception of the Clinton era, the US has been running deficits steadily.

The pandemic required massive government spending, and the tariffs introduced since Trump's first term have made a dent.

But the trend is the same with the annual deficit still hovering near $2 trillion.

The public debt was on track to keep increasing in relation to the size of the economy.

If you take the tariffs away, that fiscal gap gets very much bigger, very much bigger.

Then the question becomes is the bond market going to be okay with that?

The bigger worry is this growing sense of unease about the United States and that that erodes over time the power of the dollar as the world's great reserve currency and that essentially investors around the world slowly lose confidence in the United States.

That loss of confidence is being fueled by Trump's disdain for some of the institutions behind America's perceived strength like the Federal Reserve and now the Supreme Court.

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How Trump's Tariffs Got a Reality Check

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