SCOTT DETROW, HOST:
President Trump told a crowd outside of Pittsburgh last night that he is doubling tariffs on imported steel, though it is unclear when that would happen. The announcement is just the latest plot point in Trump's ongoing global trade war. Newly released trade figures show that imports to the U.S. plunged nearly 20% last month. And that, of course, is when Trump's worldwide tariffs kicked in. Now the future of those tariffs is up in the air after a pair of court rulings this past week found the president had overstepped his authority. What does this mean for businesses that rely on imports and for U.S. trading partners? We're going to put those questions to NPR's Scott Horsley. Hey, Scott.
SCOTT HORSLEY, BYLINE: Great to be with you.
DETROW: Let's start with these court rulings. What did they say?
HORSLEY: They say that the president does not have the power to issue the kind of sweeping worldwide tariffs we've seen this spring, at least not under the 1977 emergency law the White House has been relying on. If those rulings hold up, many of the import taxes Trump has ordered since coming back to the White House would go away. Now, that is a big if. The administration is appealing these decisions. But it is a ray of hope for importers like Sarah Wells. She sells tote bags and other products for nursing moms, and she's already gotten a surprise tariff bill this year for an extra $15,000. She could be due for a refund.
SARAH WELLS: I feel a lot of relief and hope. We still have some work going on in the court system in terms of the appeal, so I'm very cautiously optimistic at this point.
HORSLEY: For Wells and many other businesspeople, this week's court rulings were just the latest twist in what has been a dizzying few months on the tariff front.
DETROW: I mean, it's so hard to keep track of. Even before the courts got involved, the president himself seemed to be changing his mind on tariffs.
HORSLEY: Yeah. I mean, the tariffs have gone up and down like a yo-yo, and there are threats they will go up again. So just imagine trying to run a business in this environment. Wells had just placed an order with a factory in Cambodia when Trump's April 2 tariffs were announced, and suddenly, she was looking at a potential 49% increase in the cost of her merchandise.
WELLS: I put that order on hold, then the Trump administration came out with the 90-day pause, bringing it down to 10%, which was low enough for me to put my order back in play, but none of that has shipped yet because there is such a slowdown in restarting manufacturing and supply chain. I have not received anything yet.
HORSLEY: If the tariffs go away altogether, Wells could go back to manufacturing in China as she used to. In the meantime, though, she's running really low on inventory, and so she's likely to sell out of some of her most popular products within the next couple of months.
DETROW: And as all this has been going on, the president and his team have been negotiating with U.S. trading partners. How is that going?
HORSLEY: Yeah, one of the ways the White House has tried to justify these tariffs is by saying they are a tool to bring other countries to the bargaining table. So far, those bargaining sessions have not produced a lot of results. The only trade agreement so far is a framework deal with the U.K., a country the U.S. already had a trade surplus with.
Talks with China are apparently not going very well. Trump complained on social media yesterday that China wasn't acting in good faith. Earlier, he had complained about a lack of progress in talks with the European Union. In both those cases, Trump has threatened to impose higher tariffs if no deal is reached, although that threat may not be as big of a bargaining chip now that the president's authority to levy those tariffs is in doubt.
DETROW: Scott, the White House is arguing that tariffs are a big moneymaker for the government. Is that true?
HORSLEY: So far this year, tariffs have brought in about $68 billion for the government. That's a substantial increase. It's about 80% more than this time last year. Keep in mind, most of that money is coming out of the pockets of businesses and shoppers in this country, not foreign countries, as the president likes to argue.
Now, a lot of that tariff revenue has been raised in just the last couple of months. The question is, will those taxes continue to float to the government, or will these tariffs be negotiated away by the president or perhaps struck down by the courts? You know, it's hard for Congress to know, as policymakers try to craft a budget, and it's hard for businesses, too. Adam Hersh of the Economic Policy Institute says that can be really paralyzing.
ADAM HERSH: Businesses don't know what the tariff policy is going to be tomorrow, let alone two, three years from now, the way they have to be planning. It's not giving businesses the confidence to make those investments, so they're just sitting on their hands and wait for this to pass.
HORSLEY: That uncertainty is likely to continue for a while. One thing we've learned from this tumultuous tariff experiment is that when import taxes are really high, they actually don't raise much money for the government because people just stop importing stuff.
DETROW: NPR's Scott Horsley, thanks so much.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
