On February 20th, the Supreme Court released their decision about President Trump’s signature tariff policy. There was a lot political capital weighing on the decision and the Court decided the method President Trump decided to implement the tariffs was constitutionally wrong, by a 6-3 decision. The President has used a process known as International Emergency Economic Power Act or IEEPA. The act was originally designed if and when the US engaged in war, they could quickly stop trade between the 2 countries. When the war was over, things could revert back to what is considered normal.

In an article by Patricia Cohen of the New York Times News Service, there will be and are many questions about how goods flow around the world.

The Treasury department announced it will no longer collect tariffs under the IEEPA. President Trump said he was going to use Section 122 of the Constitution. Section 122 gives the ability of the President to impose tariffs but they are on emergency measures and end in 150 days.

What the Supreme Court wants the President to do, is if he wants to impose tariffs go through Congress and pass a bill. President Trump knows he likely does not have the votes for sweeping tariffs, as noted the bill passed the House saying no tariffs on Canada and Mexico, the US’s two biggest trading partners.

William Bain, head of trade policy at the British Chamber of Commerce, noted uncertainty is likely to continue as the ruling does little to clear the murky waters for businesses.

It is estimated tariffs have brought in about $200 billion in revenues since April. In response to the idea of tariff refunds, Juan Pellerano-Rendon, a logistics expert and chief marketing officer of Swap, a software company noted refunds will that months and no serious operator is building their year around a potential tariff refund.

If you believe foreign companies pay tariffs, then you believe it should not be too hard to refund to countries. If you believe that the importer of the goods pays the tariffs and that is a cost and some or all of it was passed through the supply chain which means the consumer ultimately paid higher prices or the cost of the tariff. It should be relatively easy to payback the importer, does the consumer receive lower prices? or does the company keep the extra margins?

Linking to dividend paying stocks, all companies react to the global supply chain and every company has a marketing advantage if something is made in the home country. However, usually not everything comes from the home country and when it does in terms of manufacturing, automation of the workforce is the solution. There are manufacturing plants in China which operate with few people, most robots and Hyundai announced it will be introducing personal robots in their manufacturing in South Carolina.

There are more questions than answers, till the next time – to raising questions.