Donald Trump campaigned on opposing open-ended wars, but as president he has begun at least two of them already: his unconstitutional war with Iran and his unconstitutional war—perhaps more consequential in the long run—on the U.S. economy.
Trump may have lost his tariffs case before the Supreme Court, yet his ruinous, costly, and foolish crusade against cheap prices persists.
The administration is pursuing novel legal authority—much of it dubious—to maintain some version of the import taxes Trump imposed under the 1977 International Emergency Economic Powers Act (IEEPA) until the 6-3 ruling in Learning Resources Inc. v. Trump clarified for the administration the question, supposedly tricky, of whether a statute that hardly mentions tariffs grants the president unilateral power to effectively rewrite the U.S. tax code on the fly according to his own preferences. And so tariff rates were adjusted in response to such world-shaking events as a few words of criticism from the prime minister of Switzerland, a person who does not—I am still convinced this part matters, at least a little bit—actually exist.
After IEEPA was taken away from him, Trump turned to Section 122 of the Trade Act of 1974, which authorizes the president to impose global tariffs in response to a serious balance-of-payments crisis, which, like the prime minister of Switzerland, does not actually exist. A balance-of-payments crisis is what happens when a nation cannot pay for its imports or service its debt—we may very well reach that point one day, if current spending continues, but we are not in such a crisis at present, and Trump’s invocation of the 1974 law is, like almost everything he does in this vein, largely a pretext. Citing another pretext—national security—Trump plans to raise tariffs on automobile imports from the European Union to 25 percent under Section 232 of the Trade Expansion Act of 1962.
Americans are genuinely irritated by high prices right now. Tariffs push prices up in obvious ways—U.S. importers facing steep new taxes because of Trump are passing those costs along, whether to business partners or to end consumers, whenever possible—but tariffs also lift prices in more subtle ways as well.
“When there are tariffs on building inputs, that makes houses more expensive,” says Daniel Anthony, who runs Trade Partnership Worldwide, a trade research firm, and who also founded We Pay the Tariffs, an advocacy group for businesses and consumers affected by these heavy new taxes. Anthony continued:
What you might not necessarily think about, though, is that if the cost of replacing your house goes up, then your insurance company should be charging you more, because it will cost more to rebuild that house today than it would have when you bought it. Tariffs seep into things in unexpected ways—there’s home insurance, but also car insurance: When all the replacement parts for a car are subject to a 25 percent tariff, then the mechanic’s bill goes up. If cell phones are subject to new tariffs and cell towers are more expensive to build because of steel tariffs, then you should expect higher monthly costs on a phone contract. No company is going to just say, “We don’t like the policy, but, out of our own goodwill, we’ll absorb the costs ourselves.” That isn’t how it works.”
Some businesses absorb losses in the short run because they have no better option, but, like any tax, tariffs alter business behavior over the long term. “The longer a tariff stays in place, the more likely it is to be passed on to U.S. consumers,” Anthony notes.
As a trade specialist and long-time observer of tariffs, Anthony has a front-row seat and a sharp eye for how Trump’s tariffs distort the U.S. economy and reduce its efficiency. Some importers, including smaller firms that bring in heavy equipment for resale to manufacturers and other industrial users, have endured a troubling new reality: tariffs on their goods rose dramatically after a sales contract had been signed but before the goods crossed the U.S. border, cutting into profits or forcing losses. Anthony reports that some of the firms he works with have tried to mitigate that risk by placing smaller orders that can be shipped by air rather than larger ones that sit at sea for sixty days. “You pay more per unit for the smaller orders, and air freight costs more than ocean freight. That isn’t captured by a simple tariff figure, but it makes everything costlier.” He has little patience for what he calls Trump’s “fig-leaf” tariff justifications.
Trump indulges himself with a great deal of bluster—and, quite frankly, with arguments that lack sense—about how tariffs are paid by foreigners and funnel billions into the U.S. Treasury, yet in practice the administration knows better. For instance: the United States remains an energy powerhouse and a net petroleum exporter, yet it also imports fuels such as gasoline and jet fuel along with substantial quantities of crude oil. These products are exempted from tariffs for the obvious reason that Americans strongly dislike high fuel costs. I rarely embrace protectionist arguments, but if we need a pretext, the national-security rationale for strengthening the U.S. energy sector is far more persuasive than, say, Marco Rubio’s absurd insistence that shielding the profits of Florida’s sugar lobby should be a national-security priority. Leave it to the Trump administration to have a secretary of state whose sugar patrons operate in the sugar racket.
In Iran, the Trump administration seems to prioritize opening the Strait of Hormuz, which was open before the president began his illegal, unauthorized war against Tehran—put differently, the White House’s main aim in this conflict is to erase a problem the war itself created. Similarly, the president and his advisers—and Republicans elected across the country—appear genuinely spooked by rising prices, which are at least partly the foreseeable, unintended consequence of Trump’s anti-trade policies. Tariffs rest on the simplistic belief that foreigners are colluding to deprive American consumers of goods at prices they consider too low, thereby exploiting the market at Americans’ expense.
In April 2025, Donald Trump declared war on low prices. At present, that is the one conflict he seems to be winning.
