Episode summary
EU Warns That Trump’s New Tariff Policy Breaks Trade Agreemet | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Kathryn Judge, Greg Daco, Madison Muller, Ryan Vlastelica, Lauren Rosenthal
Summary
The episode’s main trade segment centers on the fallout from the Supreme Court’s decision against President Donald Trump’s tariff authority and the European Union’s warning that his new tariff policy may violate the EU-US trade deal. The host and a legal guest argued that the ruling narrows the president’s ability to use emergency powers to impose tariffs, but leaves plenty of uncertainty because the White House is looking for other legal tools. The guest said the court treated tariffs as a form of taxation, a power the Constitution vests in Congress, and stressed that the practical effects will take time to work out in lower courts.
A second guest, an economist, said the new 15% global tariff partially offsets the relief from the ruling and keeps policy uncertainty elevated. He argued that businesses are likely to slow investment and hiring, that GDP growth will still take a hit, and that inflation relief may be limited because firms may not pass lower input costs through to consumers. Across the discussion, the theme was that tariffs remain a major source of legal, economic, and market uncertainty even after the court setback for Trump.
Key takeaways
- The guest said the Supreme Court ruling is a major setback for Trump because it treats tariffs as a congressional taxing power, not an open-ended presidential tool.
- The guest said emergency-based tariff powers have limits on both size and duration, which makes Trump’s dealmaking-by-tariff strategy harder to sustain.
- The economist said the new section 122 15% global tariff offsets much of the relief from the ruling and keeps tariff uncertainty high.
- The economist said tariff uncertainty is likely to restrain investment and hiring because businesses cannot plan cleanly.
- The economist said lower tariff rates may not quickly translate into lower consumer prices because companies may keep margins compressed.
Notable quotes
“the court recognized and the majority of the court recognize tariffs are a variation of the power to tax”
“Congress didn't and Congress can't hand that type of authority over to the president”
“the president's going to is not giving up on tariffs, but there are a lot of additional checks”
“this is a highly uncertain environment. It's one where it's very difficult to plan how much you're going to invest”
“we are going to be in an environment where there is likely to be more restraint in terms of investment because of this latent uncertainty”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week daily podcast with Carol Masser and Tim Stenc on Bloomberg Radio.
Stocks uh lower bonds higher as renewed anxiety over the impact of artificial intelligence on company profits joined lingering tariff uncertainty in squaltching risk appetites. And you've been talking about the risk trade-off. Bitcoin tumbling below what 65,000.
Gold rallying. We've definitely been seeing that play out in the markets. And the tariff story, which felt like it was baked into the trade, is now coming front and center again.
We were talking just on Friday, right, about how low volatility was and like the VIX wasn't moving, but the VIX has arisen from its slumber. It's it's much higher.
We're above 20. We're at almost 22 right now in that fear gauge.
So, so investors are nervous. So, we're focusing on all of this. We wanted to get uh a little bit more on kind of the legal decision of the Supreme Court um decision we should say uh that we got on Friday and kind of what happens next and what legal challenges uh could be coming or legal actions coming off of that.
So we're delighted to have back with us Katherine Judge. She is Harvey J. Cole Schmid, professor of law at Columbia Law School joining us right here in New York City.
Um Katherine, nice to have you here with us. Um before we move forward about what might be coming in terms of legal action, I would love to get your thoughts uh on what we got uh the Friday Supreme Court decision on President uh Trump's tariffs.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- eu us trade tariffs
- trump tariffs
- supreme court ruling
- nabe policy conference
- nvidia earnings
Companies and tickers mentioned
- NVO
- LLY
- NVDA
- Novo Nordisk
- Eli Lilly
- Ernst & Young (EY)
- Nvidia
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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