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This podcast uses government documents to illuminate the workings of the American government, and offer context around the effects of government agencies in your everyday life.
N. Rodgers: Hey, Aughie.
J. Aughenbaugh: Good morning, Nia. How are you?
N. Rodgers: I am excellent. How are you?
J. Aughenbaugh: Not bad. And in fact, listeners, I apologize because we're actually not recording this in the morning, which is when we usually record because-
N. Rodgers: We're going to re split around lunchtime, so morning-sh.
J. Aughenbaugh: Morning-ish, but we're doing it in the news. We are doing it in the news because the Supreme Court did what Nia?
N. Rodgers: They released a ruling today, and here's how this goes in case you're wondering how Aughie and I work. Today is Friday. We recorded our standard episode this morning and we actually recorded a couple of names in the news stories behind the news. Yeah. And we thought we were done. Aughie's like. I'll talk down Sunday night, because he usually checks in with me every couple of days to make sure I'm not dead because he's a good friend. I was like, Okay, bye. Then he calls me like an hour and a half later, my first thought is, no, something has happened, right?
J. Aughenbaugh: Yes.
N. Rodgers: I pick up the phone and I'm like, are you okay? He's like, they released the tariff case. I was like, I see.
J. Aughenbaugh: Yes.
N. Rodgers: I think I'm going to spend the afternoon reading it, and then we will be ready to record. We are now going to record Aughie's very fresh take on this. But I just want it noted for the record that you read 180 some pages this afternoon.
J. Aughenbaugh: Yeah, 170 pages.
N. Rodgers: And you understood it?
J. Aughenbaugh: yeah. Immediately.
N. Rodgers: Very impressed by. Because if you ask me what it was about, I can generally tell you that it is a question of the use of IEEPA as a as an authorization for doing something. What is IEEPA you asked the International Emergency Economic Powers Act, which we have discussed, when this case was first heard.
J. Aughenbaugh: Yes.
N. Rodgers: We discussed it and you can go back and listen to that recording from last fall.
J. Aughenbaugh: Yes, that is when we did mention it. Yes.
N. Rodgers: Fall of 2025 when they first heard this case. Aughie said they seemed skeptical at the time.
J. Aughenbaugh: I did say that, yes.
N. Rodgers: And your prediction was correct.
J. Aughenbaugh: Correct.
N. Rodgers: They were skeptical.
J. Aughenbaugh: I can't predict election outcomes if my life depended on it. But you get me, with a Supreme Court oral argument transcript, and the written briefs presented by the parties and my prediction success rate goes up dramatically.
N. Rodgers: It's not the tariff case. That's not the name of it. What's the actual name of the case?
J. Aughenbaugh: These are two consolidated cases, Learning Resources Incorporated v. Trump and V.O.S v. Trump. Those were the two cases from the lower courts.
N. Rodgers: One of those is a small business, and one of those is the Democratic attorney's general?
J. Aughenbaugh: Yeah.
J. Aughenbaugh: Right?
J. Aughenbaugh: Yes.
N. Rodgers: Those are the people who brought the cases, not Costco and Walmart. They've got other stuff coming in the legal pipeline, which Aughie will get to when he gets to the results of this thing.
J. Aughenbaugh: One of the implications.
N. Rodgers: Just a couple of small businesses that were like, hey, man, this tariff thing seems like a terrible idea. Democratic attorney's general who are like, we agree. This seems like a terrible idea and we're going to sue Trump.
J. Aughenbaugh: The question that the court decided to answer in the majority opinion addresses it in the first sentence. Does the International Emergency Economic Powers Act and listeners? Yes, Nia and I love the acronym. It is IEEPA. Does IEEPA authorize the president to impose tariffs? Now, these are the tariffs that Trump announced spring of 2025 on what he called America Liberation Day. Some of you may remember, that's the way he described it.
N. Rodgers: He has regularly introduced tariffs to new places, reintroduced different tariffs to other places. Tariff may be one of Donald Trump's favorite words.
J. Aughenbaugh: Yes. The Supreme Court issued a decision today. The vote was 6-3. The answer to the question was no. IEEPA does not give a president the authority to impose tariffs. Now, as we've discussed previously on this podcast, it's really reductionist to go ahead and say that all the conservatives vote together and all the liberals vote together.
N. Rodgers: That's not what happened.
J. Aughenbaugh: Yeah. Because in this particular case, you saw three conservatives, Chief Justice John Roberts, Justice Gorsuch, and Justice Coney Barrett joined with the three liberals, Sotomayor, Kagan, and Brown Jackson to rule against the Trump administration. The three dissenters were Thomas, Alito and Kavanaugh.
N. Rodgers: Regularly, Thomas and Alito vote together, but Kavanaugh can go all over the place, so it depends on what he thinks.
J. Aughenbaugh: Yes. Gorsuch can be a wildcard, and you're going to explain this because listeners in the 170 pages of opinions, I kid you not.
N. Rodgers: He's not saying that bitterly at all.
J. Aughenbaugh: There were seven different opinions.
N. Rodgers: That's what I love about this. There were four concurrences?
J. Aughenbaugh: Four concurrences. Yes.
N. Rodgers: You get the main opinion?
J. Aughenbaugh: The majority opinion. Yes.
N. Rodgers: Who is the majority opinion written by?
J. Aughenbaugh: Chief Justice John Roberts.
N. Rodgers: Okay. And then he is joined with concurrences by Gorsuch, Barrett, Kagan, and Brown Jackson?
J. Aughenbaugh: Yes, right. Coney Barrett.
N. Rodgers: Which means those four people said, we got to the right place, but here's where we messed up in the argument.
J. Aughenbaugh: Yeah.
N. Rodgers: Or I want to additionally add things to the argument that weren't added by the Chief Justice in his own pinion.
J. Aughenbaugh: Here's another one. Coney Barrett wrote separately to go ahead and criticize Gorsuch's description of one of the doctrines used in the case.
N. Rodgers: Then Kagan wrote, but she was joined by Sotomayor and Jackson. Everybody all nine had an opinion.
J. Aughenbaugh: The only one who didn't write anything was what? Alito.
N. Rodgers: Sotomayor.
J. Aughenbaugh: The only two Alito and Sotomayor. We're the only two who didn't write anything.
N. Rodgers: Everybody else was like.
J. Aughenbaugh: You guys are killing me here, really?
N. Rodgers: But as Aughie will tell you, the thing you should pay attention to more important than the concurrences, are the dissents. Because in the dissents, they usually tell you what should happen if you want to see these things fixed in the future. I believe that one of those does that in this instance.
J. Aughenbaugh: My goodness.
N. Rodgers: But anyway, and Kavanaugh.
J. Aughenbaugh: Let's go through this.
N. Rodgers: He gives basically an instruction manual, for does how to do this properly because you boogered up. He says, and you can fix it. Not surprisingly, this was going to be controversial, and it doesn't surprise me that Chief Justice Roberts wrote the opinion because J. Rob is nothing, if not willing to take the fire. He's pretty good about that. He's pretty good about, this is going to be bad, so I should go ahead and be the one.
J. Aughenbaugh: Yeah, and he will write a lot of opinions. See the Last Supreme Court term when he wrote the least among all the nine justices. But on the big ones, yeah, he'll go ahead and assign it to himself.
N. Rodgers: Take the heat.
J. Aughenbaugh: So let's go ahead and break down the opinions. The majority opinion basically makes two points: gives two reasons why the tariffs are illegal. The first, is your standard text analysis. Right now, Justice Scalia is sitting up in his grave and he's enjoying a cigar and a glass of whiskey because they're all textualists now. Basically, John Roberts comes out and says, When you read IEEPA there is no reference to tariffs or duties. The Trump administration could not even identify a single statute in which Congress used the verb regulate to authorize taxation or tariffs. According to John Roberts, historically, tariffs are taxes. To prove his point and our listeners who are constitutional law, scholars or students, you're going to love this one, especially my former students who are like, I'm having nightmares now, John Roberts quotes from Gibbons v. Ogden in 1824, where John Marshall says, tariffs are ''A branch of the taxing power.'' Then he goes on to say, if regulate means taxing imports and exports, IEEPA would authorize to the president that which only Article 1 of the Constitution gives the Congress the authority to do.
N. Rodgers: If the president was right and IEEPA gave him that power, then IEEPA can't be let to stand because it defies the Constitution.
J. Aughenbaugh: Tution. That's right.
N. Rodgers: Because the power of taxation is placed on the Congress.
J. Aughenbaugh: Congress. That's right.
N. Rodgers: Because basically you want the elected officials who are going to be held accountable, the ones taxing you so you can hold them accountable.
J. Aughenbaugh: That's right. That's why all appropriations bills have to originate with the House, right?
N. Rodgers: Right.
J. Aughenbaugh: Okay. But then Roberts doesn't stop there. He goes, not only do these tariffs, basically make no sense textually. He said, these tariffs also violate a doctrine that we have used with some regularity over the last 8-10 years, the doctrine is known as the Major Questions Doctrine. Nia, you and I discussed this doctrine on the podcast. You may recall, the Supreme Court used the Major Questions Doctrine to invalidate a number of Biden administration policy initiatives. They even used it to go ahead and overturn a couple Obama administration policy initiatives. Basically, the major Questions doctrine says that if the executive branch is issuing a regulation that's going to have a major impact on the nation's economy, whether producers or consumers, then the administration has to clearly show that Congress gave it the specific authority to do that. So listeners to give you an example.
N. Rodgers: If Congress said to Donald Trump, you may nationalize the steel industry, in order to have a war with Iran. Not that I hope that that happens, but we are recording in the times we're recording. Then he could do that because he's been granted that authority.
J. Aughenbaugh: Clearly in law, right?
N. Rodgers: Right. But he can't just write an executive order saying, I'm going to take over all the steel. Because he has not been given that authority by Congress.
J. Aughenbaugh: That's right. Listeners to give you an example of how the Roberts Court used the Major Questions Doctrine with the Biden administration. Some of our listeners may recall that the Biden administration attempted to give student loan forgiveness to a large number of Americans in regards to their college student loans. When a number of states challenged that program, the Supreme Court held that because it would potentially cost nearly three quarters of $1 billion, would remove three quarters of $1 billion, force the United States Treasury to pick up the tab for three quarters of $1 billion. The Biden administration had to clearly show that Congress had passed a law that gave it the authority to do so. Because the Biden administration couldn't, the action was illegal, right?
N. Rodgers: Right.
J. Aughenbaugh: Now, Trump tried to get around the major questions doctrine by saying, this is an emergency or I am doing this per my authority to be the sole organ of US foreign policy. The Roberts Court, the Roberts majority opinion was like, sorry, there aren't exceptions in the Major Questions Doctrine for ''emergencies or for foreign affairs implications.''
J. Aughenbaugh: All right.
N. Rodgers: Because it's a financial thing.
J. Aughenbaugh: It's a financial.
N. Rodgers: Comes back to the commerce clause.
J. Aughenbaugh: Yes, right?
N. Rodgers: Which is Congress and not the president.
J. Aughenbaugh: President. That's right. Congress has trade authority. Has Congress given trade authority to presidents? Yes. But they didn't do so with IEEPA, okay.
N. Rodgers: Right. Okay, we'll get to that in a minute. We'll get to Kavanaugh. Kavanaugh is like, you know, if you rewrote this.
J. Aughenbaugh: Yes.
N. Rodgers: But anyway, we'll get to that in a minute.
J. Aughenbaugh: So let's now work our way through.
N. Rodgers: And side note, all six were on Board with the first argument.
J. Aughenbaugh: Yes.
N. Rodgers: But only Robert Gorsuch and Coney Barrett were on Board with the major questions doctrine.
J. Aughenbaugh: Questions doctrine, that's right.
N. Rodgers: But what a reminder of these major questions doctrine is for those people who hated the Biden student loan repayment thing, and those were red AGs, red state AGs.
J. Aughenbaugh: Yes
N. Rodgers: They were like, no.
J. Aughenbaugh: Yes.
N. Rodgers: They are now seeing that if the court applies things equally.
J. Aughenbaugh: Which they did in this case.
N. Rodgers: Which they did in this case, then the Democrats win when they go tariffs. No. It's consistent logic.
J. Aughenbaugh: Yes.
N. Rodgers: It's consistent across the Board. You may not like it, but it is consistent. And that is the thing we struggle with as humans: when the court goes against us, we don't like it. And when they go for us, we like it. And so we get crabby. And the court's like, "No, if we apply it in one circumstance, we have to apply it in all the circumstances."
J. Aughenbaugh: And Nia, I had a brief conversation with a reporter who wanted me to get my initial impressions of the Supreme Court's ruling in this case, and I pointed that out. I said, "You know how liberals hated the Roberts court, saying that the student loan forgiveness program was illegal, okay? And the conservatives loved it. Well, today, the roles are reversed." Supreme Court, a majority of the court was just like, no. Okay? If it doesn't work for a Democratic president, it ain't working for a Republican president. All right? So now, as Nia pointed out, there were four concurrences.
J. Aughenbaugh: The first two were by Gorsuch and Coney Barrett, right? Gorsuch joined the Roberts opinion in full. But then he wrote of the seven opinions in this case, the second longest. His concurrence was longer than John Roberts' majority opinion.
N. Rodgers: Right, because John Roberts did not put in the non-delegation doctrine, and Gorsuch wanted it in there. He wanted it on the record that Congress cannot give away legislative powers to other branches.
J. Aughenbaugh: Yes,
N. Rodgers: Congress either has to do the thing or it has to not do the thing and be held accountable for not doing the thing, but it can't say to presidents, "I'm gonna need you to do this legislative thing."
J. Aughenbaugh: Yes, in particular, Gorsuch connects the major questions doctrine to the non-delegation doctrine. He said, You know, the major Questions doctrine is not brand new, folks. This is a hallmark of a constitutional democracy. The people have chosen in the Constitution to give lawmaking authority to whom Nia to congress.
N. Rodgers: [OVERLAPPING] Congress.
J. Aughenbaugh: If Congress turns around and gives away its authority to the executive branch, then that violates the separation of powers.
N. Rodgers: Right.
J. Aughenbaugh: Which is one of the-
N. Rodgers: It basically crushes democracy, as we know it.
J. Aughenbaugh: Yeah, because he points out, this is one of the structural features of the US Constitution. Again, Neil Gorsuch right now, okay, is channeling Scalia. Okay? I'm like, Good Lord, okay? Did you lose a bet, you know, at some point in time, okay? I mean, because he's all about Scalia, and it's in his concurrence.
N. Rodgers: What I like is that Barrett writes a four-page concurrence that basically says, I like John Roberts argument, and Gorsuch is full of crap.
J. Aughenbaugh: Yes.
N. Rodgers: But in a nicer way, because she's too ladylike to say it like that.
J. Aughenbaugh: But basically, she has no Coney Barrett joined the Roberts majority opinion in full. She writes four separate pages to go ahead and say, but I disagree with my colleague Gorsuch.
N. Rodgers: On the non-delegation issue.
J. Aughenbaugh: Yeah. She was just like, why are we trying to tie this to non-delegation? Just go ahead and say, Okay, it violates the-.
N. Rodgers: IEEPA doesn't allow you to do this.
J. Aughenbaugh: Yes. Boom, done, right? Okay.
N. Rodgers: There's nothing in the text that implies that this would be okay.
J. Aughenbaugh: Yes, right?
N. Rodgers: Knock it off, basically.
J. Aughenbaugh: Kagan.
N. Rodgers: And then Kagan writes, and she's joined by Sotomayor and Jackson.
J. Aughenbaugh: Yes, and she goes ahead and emphasizes, "We don't even have to use the major questions doctrine. We could go ahead and say that Trump's tariffs are illegal simply by interpreting the text of IEEPA. This is standard text analysis. At no point in IEEPA. Does it say that a president may use that law as the basis for imposing broad tariffs?" So she's just like, "We don't even need to go there. Let's just stick with text analysis."
N. Rodgers: We are Textualists now.
J. Aughenbaugh: Yeah, we're all textualists now, which is what she said, okay, in an infamous law review article after Scalia died. She was just like, you want to measure my former colleague and good friend Justice Scalia's influence on the Supreme Court? We're all textualists now. Okay? Right. Now, here is an exception to that. Brown Jackson in her concurrence, okay? Wrote separately to go ahead and say, well, not only can we rely on the text of the IEEPA statute? We should also look to the legislative record, where members of Congress can go ahead and, in the House and Senate reports, say, this is the purpose of the law as I see it to figure out what Congress's intent was when they passed the law. Now, let's be very clear.
J. Aughenbaugh: Conservatives hate using the legislative record. Why? Because it's not the official law. Members of Congress-
N. Rodgers: It's just what people said.
J. Aughenbaugh: -yeah, members of Congress frequently put self-serving speeches and interpretations into the House and Senate reports. So, for a justice like Scalia and all of his acolytes, like Coney Barrett, Neil Gorsuch, et cetera, you never have to look to the purpose of the law. You just look at the words.
N. Rodgers: Look at intent. You can't possibly know the intent of the founders. You can't possibly know the intent of Senator Bob the day he voted on this thing. You can only look at the text that he voted on and say that's the text that he supported.
J. Aughenbaugh: Yeah.
N. Rodgers: Okay.
J. Aughenbaugh: So that's the majority. Nia, are we ready for the dissents?
N. Rodgers: I'm ready for the dissents.
J. Aughenbaugh: Okay, here we go. Okay. Clarence Thomas, okay, who's not, excuse the expression. A verbose or chatty Kathy, even in his opinions, writes a dissent of 18 pages. God bless him. All he comes out and says is, historically, Congress has given its trade policy authority to the president; they've done it in a number of laws, and we have ratified that practice in the past. Why are we nitpicking today? That was his dissent. All right?
N. Rodgers: Okay.
J. Aughenbaugh: But then Kavanaugh writes a separate dissent, which was joined by Thomas and Alito, and it's the longest opinion of the seven. Clocking in at a little over 63 pages. His dissent basically makes five points. Are you ready, Nia? One. He believes IEEPA does give the president the authority to issue tariffs. Second, he sees no difference between regulating imports, IE imposed tariffs, with adjusting imports, which is actually in the law. He's just like regulating imports, adjusting imports. All Congress was saying that the president can go ahead and do stuff with imports.
J. Aughenbaugh: I'm like, Okay, right?
N. Rodgers: Okay.
J. Aughenbaugh: Then he says, If you look at when IEEPA was created, it was the successor to the Nixon-era Trading with the Enemy Act. And if Congress was trying to rein in the president, they did a really poor job when they wrote IEEPA. I'm like, Okay, so now we're throwing shade on Congress. Then he goes, "So let's go ahead and take a look at the major questions doctrine. You know, we've only used the major Questions doctrine for domestic policy initiatives. Historically, this court has said the president is the sole organ of US foreign policy.
J. Aughenbaugh: See the Supreme Court's ruling in US versus Curtis Wright from 1936, I think it's 36, right? US versus Curtis Wright. We have said that the president is the sole organ. Why are we saying differently today?" And then he goes ahead and says, " If this logic had been used in other foreign policy cases, the history of the United States would have been significantly different." I'm like, Well, okay, then. I guess the sky is falling, okay? He's the only one of the opinions that specifically goes ahead and says," Because of the court's ruling today, there is going to be a huge mess in the aftermath."
N. Rodgers: Because of other rulings.
J. Aughenbaugh: Yes, because as we're going to talk about in just a few moments, the majority never addresses how the US government is now supposed to refund all of the tariffs they have collected.
N. Rodgers: And the reason the Supreme Court does not talk about that is that that's not the question they were asked.
J. Aughenbaugh: That's right. Yep.
N. Rodgers: They answered the question they were asked, which is, can he do that? It's the question we asked when we made the first episode about this. We're like, can he do that? And the answer that they answered six to three was, nope. But the fallout from that is not their problem.
J. Aughenbaugh: Nope.
N. Rodgers: Right. The fallout from how to desegregate the schools is not their problem.
J. Aughenbaugh: Yeah.
N. Rodgers: You need to integrate the schools. What does that mean? It means that Black kids and white kids go to school together. Well, how do we do that? That's up to you. You have to figure it out. That's not the question we were asked.
J. Aughenbaugh: And it took a follow-up case, Brown versus Board of Education, the next year for the court to address how quickly desegregation should occur.
N. Rodgers: Because even then, they didn't tell people how to do it.
J. Aughenbaugh: No, all they said was, it should occur with all deliberate speed, right?
N. Rodgers: Right. Whatever that means, but yeah.
J. Aughenbaugh: Okay.
N. Rodgers: So sometimes the court looks at the question and goes, Hey, what's the fallout of this is, not my problem. That is not my problem. My problem is, did you do something you should not have done? Not well, what should we do to fix that? Well, I don't know. That's your problem.
J. Aughenbaugh: Yeah, because if you think that the job of the unelected judiciary is to interpret the law, that does not include implementing changes to the law. Interpreting the law means you look at a law and say, This is what it means. Did these people comply or not?
J. Aughenbaugh: Okay? Now, how do you respond to that opinion? Typically, the Supreme Court likes, "We won't address that until there are problems with your implementation of our ruling."
N. Rodgers: Whatever you pick, and people sue about, then we can talk about that.
J. Aughenbaugh: Yes. Okay. Cause we're not the policymakers here, right?
N. Rodgers: Right.
J. Aughenbaugh: Now, what is fascinating before we get to the implications of this case, Nia? What was fascinating in reading this? I know this is going to sound like inside baseball on the court, the only stuff that Supreme Court junkies can really enjoy. But I got to tell you, for a court that was 6-3, the battles going on the Roberts court right now about how they're supposed to do their job was pretty intense in this case. Pretty intense, and it was obvious.
N. Rodgers: It was like one to one to one to one to five to one to three. It was a very divided. Should we look at major doctrines?
J. Aughenbaugh: Simply the words in the text. Then you got Brown Jackson.
N. Rodgers: Something clear, is something not clear? Do you look at intent? Are you looking at the intent of the writers? Are you looking at the language of the writer? It's all over the place. This case is a mess. It is all over the place.
J. Aughenbaugh: Those of us who teach constitutional law, administrative law, we're going to be analyzing this case for years.
N. Rodgers: This is the gift that keeps giving, bringing you publicy weirdos.
J. Aughenbaugh: Brett Kavanaugh is like, "I don't think the major questions doctrine applies to foreign affairs." I'm like, "Well, okay, then. I mean, good Lord. Well, thank you very much."
N. Rodgers: What's interesting about that to me is first time in the 50 year history of it, that it has been used in that way. Clearly, whether Kavanaugh thinks it should apply or not, Donald Trump thought it should apply. I'm not sure I agree with Kavanaugh on that.
J. Aughenbaugh: Nia, you know what this case reminds me of is some of the cases that arose in the 1930s when FDR was the new deal under FDR, because the Supreme Court had never seen a president ask.
N. Rodgers: Trying to do that stuff.
J. Aughenbaugh: Ask Congress to go ahead and basically make the federal government the dominant, if you will, level of government. The Supreme Court really, really struggled. You had these just splintered opinions, and they were coming up with doctrines to make sense of this. Now, finally, the Supreme Court coalesces around the idea of a broad interpretation of the Commerce Clause allows the political branches to regulate the economy this way, but there was some growing pains. By the way, for listeners, if you think Donald Trump was off the rails, and we're going to cover this in just a moment with his criticism of the Supreme Court, FDR said some really unpleasant things about the Supreme Court in the 1930s. Remember, folks, FDR got so upset he contemplated packing the federal judiciary. Donald Trump hasn't said that yet. Yet. What's next?
N. Rodgers: Can I just say that the thing about the refunds is?
J. Aughenbaugh: Now, we're transitioning, listeners. Now, we're going from what the court said in their opinions to the implications of this ruling.
N. Rodgers: If the refunds have to be repaid as, earlier mentioned Costco and Walmart, they are lining up. They're lining up to sue because they want the American government to pay them back. One of the smartest things that Donald Trump did with the $200 billion that he's gotten is he did not send checks to the American people. Because if he had done that, clawing that money back by companies would be much harder.
J. Aughenbaugh: Harder, yes.
N. Rodgers: I will give to him that it was smart of him to wait to see how this came out before he just sent out $200 billion in checks to people.
J. Aughenbaugh: As Nia just mentioned, most estimates are that the federal government has collected more than $200 billion in tariffs since the start of last year from Liberation Day. The question becomes, how do you go ahead and pay back all of that tariff revenue that has been collected from companies that have imported goods and services from other countries because that's the way tariffs work. If a company in China makes a huge order of T-shirts, and Walmart buys a big bulk order of T-shirts, the tariff gets imposed on those T-shirts being imported to the United States.
N. Rodgers: Walmart pays that tariff.
J. Aughenbaugh: That's right.
N. Rodgers: Likely passes it on to their consumers.
J. Aughenbaugh: The question becomes, when you have generated $200 billion, how do you pay back all those companies that have had to pay the tariffs on the goods and services that they imported from companies in those nations that the tariffs have been imposed upon?
N. Rodgers: Donald Trump misunderstood that tariffs would be paid by the foreign nation, and not by the importing company.
J. Aughenbaugh: That's right. Well, I don't know if he misinterpreted. The way he went ahead and made it sound like was, we're punishing other nations who have imposed tariffs on US corporations. What a lot of people don't understand is we're not getting tariff revenue from China or Mexico or India. We're getting it because of their goods that Americans want to buy here in the United States. The court's holding doesn't resolve the refund issue.
N. Rodgers: Donald Trump was very crabby about this ruling, by the way.
J. Aughenbaugh: We're going to get to that in just a moment.
N. Rodgers: Sorry.
J. Aughenbaugh: Well, you brought up the refunds. The thing listeners need to understand is now the refund issue will be litigated in court. Again, the example you used just a few moments ago, Nia, about desegregation is a really good example because desegregation plans in school districts that had been using segregation took over a decade-and-a-half.
N. Rodgers: To make their way through court.
J. Aughenbaugh: Two decades. Now, do I think that's going to take that long for the refunds? No, but it's going to be years.
N. Rodgers: It's going to be a long time. It may be long enough, then becomes mute.
J. Aughenbaugh: Well, become for the next president. You potentially going to see the next president's Department of Treasury still paying out refunds because of tariffs that were imposed in 2025-2026.
N. Rodgers: Some businesses will go under before they can finish litigation. Costco won't, and Walmart won't Augenbaugh's junior coffee repair shop where he fixes coffee pots, he's probably going to go under, because he won't be able to wait the ten years or five years or seven years or however long it takes to work its way through the court system.
J. Aughenbaugh: The small businesses are the ones who are really going to suffer here. Now, Nia, just a few moments ago, you went ahead and meant it.
N. Rodgers: I love Donald Trump. When he gets mad, he just starts word salading people, and he was like, "They are unpatriotic and disloyal to the Constitution and slimeballs. Their mama dressed them funny." He's like, you're like, "Calm down over there." He really hates to lose. He hates to lose in court.
J. Aughenbaugh: The day we're recording this, he gave a press conference a mere like three hours after the Supreme Court issued the opinion. Well, first of all, he called the decision disappointing. That was mild.
N. Rodgers: He said that first, then he went away to wind himself up and came back out and talked some more.
J. Aughenbaugh: That's when he went ahead and said that "they're very unpatriotic and disloyal to our Constitution". These are the justices of the Supreme Court. Then you went ahead and accused the justices of being swayed by foreign interests. I'm like, "Well, okay then."
N. Rodgers: Remember, Donald Trump occasionally just makes stuff up. That's what he was doing in this instance. I'm positive that J. Rob has not been bought off by some Chinese importer. That just has not happened. That has not happened. That's not what this was. Donald Trump loves to win, he hates to lose. He's been in the habit of winning with the Supreme Court. But he knew he was in trouble with this one for the last several weeks because he has been saying over and over, "If this goes against me, it's going to be bad for everybody." He's been building in a, "I'm going to have a negative response for a while." I cannot believe these words are about to come out of my mouth, but I'm going to say them. I have a certain level of sympathy for Donald Trump. I want everybody to know that that hurt me to say that in this particular instance. It doesn't always hurt me because I think Donald Trump is a human, and I think there are things that hurt his feelings, and I don't support that for anybody. But Donald Trump has seen the use of tariffs as a measure of controlling other people's governments, which he believes is the right thing for the American president to do. Now, he and I can disagree on that, but this has taken a bit of his leverage away. That must be very hard. That must be very hard for him to look at it and go, "No, no, no. This is how I get people to do things. This is how I scare nations into doing things. If you take that power away from me, then I have to come up with some other way to scare nations.
J. Aughenbaugh: Speaking of coming up with a different way, Trump also announced on Friday.
N. Rodgers: Oh, no. I didn't hear this. Did he come up with some other way?
J. Aughenbaugh: Well, he went ahead and said, "Because I can't use IEEPA, I'm going to go ahead and use what's known as Section 122, which is a different trade law." By the way, no president has used it for what Trump wants to do. Trump said he's going to impose a 10% global tariff in a matter of days. By the way, Section 122 gives him the authority, and this is clearly stated in law. He can use that authority for 150 days. He also said he's going to use Section 301 to open investigations into certain unspecified countries' unfair trade practices.
N. Rodgers: I misunderstood. This is Section 122 of the Trade Act.
J. Aughenbaugh: The Trade Act. Yes.
N. Rodgers: Then Section 301 of the Trade Act. Basically, what he's saying is, "I do have the power under this Trade Act to do a 10% tariff, and I have the power under the Trade Act to investigate and say, other people's tariffs are unfair."
J. Aughenbaugh: Yes. Now, you got to remember, 10% is a drop in the bucket compared to some of the tariffs he has imposed based on what he thought he could do with IEEPA.
N. Rodgers: Some of them have been 60% of 25-45%. But 10% is still not a small amount.
J. Aughenbaugh: But again, you can only impose it for 150 days. That is basically what? Five months?
N. Rodgers: Five months. Look how both of us. We're trying to do math on our fingers there.
J. Aughenbaugh: Pretty much now. By the way, once he does that, will that be in court? That's going to get. Because, again, no president has used that authority. Most presidents use the Trade Act as a threat. He's going to go ahead and he's going to use it. In part, he's got to use it. Here's the next point in regards to implications. He has to use it because his terrorists have generated so much revenue. He is forced to give back just half of that revenue, as Kavanaugh pointed out in his dissent, that's $120 billion, which is in the period of time, these tariffs have been imposed is a half of a percent of the nation's gross domestic product.
J. Aughenbaugh: That's a pretty significant amount of cash.
N. Rodgers: That's a lot of money.
J. Aughenbaugh: It's even more money in regards to the fact that his Big Beautiful Bill last year reduced income tax rates, and it was predicated on these tariffs generating a whole bunch of revenue, which again, unfortunately, for his Solicitor General, who had to argue this case in front of the Supreme Court, Trump has been basically running around the country pointing out that his tariffs have generated so much revenue that it's actually been reducing the federal government's deficit this fiscal year, so now he's stuck because, without all that tariff revenue, look at what it does to the United States' deficit for this fiscal year, and look what it contributes to the United States government's overall debt. Now we got a bigger political problem because the only way you could make the Big Beautiful Bill sound palatable fiscally was the tariff revenue.
N. Rodgers: Right, but we'll pay for it with tariffs.
J. Aughenbaugh: Now you got to go ahead and give a big chunk of that back. You better come up with some other ways to generate revenue because, otherwise, you're going to get stuck with the moniker of hurting the US deficit in debt.
N. Rodgers: Right. Sorry, the reason I was laughing is because I was thinking, the United States has a big yard sale, and we're like, so we got some paintings for auction. We got some land we're trying to sell.
J. Aughenbaugh: Hey, Nia. We got parts of the White House that have had to be destroyed, so we can go ahead and build the Big Grand Ballroom. Maybe we could go ahead and sell sponsorship in the Big Grand Ballroom. I'm sorry.
N. Rodgers: The Altria Ballroom. Oh, my gosh, he might have to take his name off of some things and sell it to other people. The Kennedy Center, instead of the Trump Kennedy Center, it will be the Gates Foundation-Kennedy Center or whatever.
J. Aughenbaugh: The Apple Center, the Walmart Grand Ballroom.
N. Rodgers: The other thing he could do is, and this is possible, he could say, we're not going to take any more money from you, but what are you going to do about the old money? You could just default. It's not like Americans don't default on loans. It's not like Americans don't default on things they owe. He could theoretically default. Now what happens when the United States defaults is our bond rating drops, and everybody in the world runs away from us, and the dollar becomes useless, and we have much larger problems.
J. Aughenbaugh: The world economy goes into the proverbial tank, listeners.
N. Rodgers: That's right. We take everybody down with us.
J. Aughenbaugh: Yes, we do.
N. Rodgers: What we might have to do is invade other countries and sell them off.
J. Aughenbaugh: We need to stop brainstorming.
N. Rodgers: Ideas you think will get back to somebody?
J. Aughenbaugh: I'm just like, let's not go there.
N. Rodgers: In fairness to Donald Trump, this is going to be hard. This is going to be a test of his medal as a president, and on the world stage, it's going to be very hard for him. He's been used to having the upper hand, and he now has much less of an upper hand.
J. Aughenbaugh: The other thing that's fascinating to me, Nia, is, and it's a little early on, again, we're recording this the day of the Supreme Court's decision.
N. Rodgers: This came down 7 hours ago, so yeah.
J. Aughenbaugh: If you think about this, Nia, now there are a whole bunch of Republicans in Congress who like free trade, who now have cover from the US Supreme Court to push back.
N. Rodgers: Chuck Grassley has already done that. He's already said, good, now we can discuss this differently.
J. Aughenbaugh: I would really like to see both Democratic and Republican members of Congress pull back some of the trade authority that they've given the president because, again, I really do believe that Congress should start acting the way the Constitution was designed for it to act.
N. Rodgers: You have to actually take some responsibility here.
J. Aughenbaugh: That's right.
N. Rodgers: Do this, and then you have to be held accountable.
J. Aughenbaugh: That's right. Instead of giving away the authority to the executive branch and then basically leaving it to the Supreme Court to say, "No, you can't do that. You've been a bad boy and a girl. No, you need to take some of the responsibility because most of the federal government's power is given to the Congress in the United States Constitution."
N. Rodgers: You need to be held accountable by the voters. If they don't like what you did, you go now. If they like what you did, you stay forever.
J. Aughenbaugh: Nia, you and I made this similar point when the Supreme Court went ahead and said the Biden administration student loan forgiveness program was illegal. Both you and I went ahead and said, if Democratic members of Congress want to do this, then they should go ahead and pass a law saying that the president can do this, which means you're going to be held accountable to all the voters, some of whom don't go to college, never took out a student loan. You're going to have to go ahead and explain to them why college students should get student loan forgiveness.
N. Rodgers: Similarly, he's got both House and Senate right now. He could get them to rewrite IEEPA, but the danger of that is that it will give him the power to do this, but it will also give the next president and the president after that and the president after that, which is why you run into the caution of, do we really want to give the president this power because they won't always be a Republican?
J. Aughenbaugh: Likewise, as I said to the reporter this afternoon, Nia, for liberals who are, like, the Supreme Court finally grew a spine, showed some backbone, they're reining in Trump, but they're also sending a pretty clear message to future presidents. If we're not going to allow Donald Trump to do this, we're not going to let you do it with one of your policy initiatives yet you can't convince Congress to quite clearly give you the authority to do.
N. Rodgers: It works for goose and gander.
J. Aughenbaugh: That's right. It cuts both ways.
N. Rodgers: Exactly, and I don't know if Congress, I don't know if he can get them on board with giving him this power.
J. Aughenbaugh: No.
N. Rodgers: There are enough Republicans who are uncomfortable with that idea.
J. Aughenbaugh: You got members of Congress, like Mitch McConnell. He's a free trade hawk. He loves free trade, grand [inaudible] , free trade, and you know you can't get any Democrats to cross over because none of them would cross the side of the road to, excuse the expression, pee on Donald Trump's back to put out a fire, so I don't think he can get enough support in Congress to give him this tariff authority. I just don't see it. Good stuff.
N. Rodgers: It is. It's always exciting when they say something, but what's more exciting is when they say something and then they all stand around going [inaudible] to each other. It's like the geese. When the geese go at each other, and you're like, you have a common enemy, there's a cat, but we're busy tearing each other up over here about whatever.
J. Aughenbaugh: Nia, it reminds me of, and listeners, please forgive me and Nia as we're making these comparisons, but it reminds me of faculty meetings.
N. Rodgers: Chair says something, and then people turn on each other.
J. Aughenbaugh: A whole bunch of really smart people are sitting in a room, and even if they generally agree with a policy direction, they just can't help but nitpick.
N. Rodgers: Right. I was in a meeting one time where they produced a search engine that looked a whole lot like Google before Google existed, and you should have heard the librarians go, it doesn't favor this, and it doesn't favor this, and it doesn't favor. I'm like, this thing is magic. What is wrong with you, people, and the person who developed it was, like, you know what, I'm going to go work in the Valley, and he left. He left librarianship, and he went off to do things, and I don't know if he ended up at Google or not, but they were complaining about the font and the this and the that, and he was like, really? This thing works miracles. They're like, Yeah, but [inaudible] . You're just, like, okay. I think that's funny. Nine of the smartest people in the world, six of them agree they're right, but they can't agree on exactly how they're right.
J. Aughenbaugh: Right. Okay.
N. Rodgers: We know we're right. Thank you, Aughie.
J. Aughenbaugh: That's what you tell yourself so you can get to sleep at night. Good for you.
N. Rodgers: Exactly. Bless their hearts, as we say here in the South, but it'll be interesting to see what Donald Trump's next moves are.
J. Aughenbaugh: He does not take defeat lying down.
N. Rodgers: Oh, no, nor does he take it gracefully. He is not. He is the epitome of a sore loser. There's a little picture of him in the dictionary next to sore loser. He's just one of those people. He's not the only one. There are there are plenty of people who are not thrilled at the idea of losing.
J. Aughenbaugh: Again, we're so used to certain behavioral norms from our presidents, and Donald Trump is like, I don't care about those behavioral norms.
N. Rodgers: What other president have you heard call a Supreme Court justice a slimeball? You know what I mean. That seems a little much.
J. Aughenbaugh: They're a disappointment. They're disloyal. I'm like, really?
N. Rodgers: Right, disloyal to the Constitution. You know they've read that thing a bunch of times.
J. Aughenbaugh: You get the fact that there's probably three or four of them currently on the Supreme Court, who, if they were in private practice, could be easily making five to six times what they're currently making as a Supreme Court justice. They're doing this because they love the country.
N. Rodgers: Right, and they love the Constitution, and they love the law, and the other thing is, just because somebody disagrees with you doesn't make them evil. It's a thing both sides need to remember. It comes back to the whole point of this entire podcast, which is, as long as you can be civil in your disagreement, that's actually good for democracy. It's good for democracy to have lots of opinions and lots of crabbiness and lots of people talking about something because that's how you get the best ideas. It would help him if he had a rival. You know how Lincoln had those cabinet of rivals?
J. Aughenbaugh: Oh, yeah, the team of rivals.
N. Rodgers: If Donald Trump had a guy who would come in and go, here's what's wrong with your tariff idea, sir. Here's where it's going to fail, and he actually listened to that person, because he doesn't really have a lot of those people around him. That's a disservice to him as a president. They don't trust him more with the truth.
J. Aughenbaugh: Yeah, because the only people you have around you are sycophants who are always saying yes, even the smartest, brightest, best leaders sometimes get it in their head to do something just bad.
N. Rodgers: They just screw up sometimes and need to be told no, and I think that it's unfortunate that he doesn't have anybody who does that for him.
J. Aughenbaugh: Yep. Anyway, thank you, Nia. Thanks for letting me get my Supreme Court geek on here. I hope, listeners, you enjoy this. I hope we explained what the Supreme Court did and what are the implications. By the way, I'm just going to go out on a limb here, Nia. This is shocking. You ready? Chances are, we're probably going to have some more Supreme Court rulings about Trump policy initiatives. What do you think?
N. Rodgers: I hope that they are received with slightly less slimeball in the future. He hurts when he's hurt.
J. Aughenbaugh: He does.
N. Rodgers: With any luck, he will toughen up a little bit on that because it's not personal. They did it to Biden. They'll do it to him. They'll do it to the next guy.
J. Aughenbaugh: Sure, they do.
N. Rodgers: I feel certain we'll see Trump again because, if nothing else, Donald Trump loves a lawsuit.
J. Aughenbaugh: Yes, he does. Yep.
N. Rodgers: He is a litigious individual.
J. Aughenbaugh: Thanks, Nia.
N. Rodgers: Thank you, Aughie.