David G. French

This is so cool.

The World's Dumbest Tariff Has Been Revealed bloomberg.com/opinion/articl…

Happy opening day everyone!

@scottlincicome Oh, the irony. Most of last year, the negative jobs impact was probably a bigger story than the price impact as US businesses slowed hiring and business investment to preserve cash for unexpected tariff policy changes.

And if forced to choose between lower prices and more jobs*, Americans choose the former. *a false choice, yes, but still useful to poll.

"The reason that tariffs are so unpopular is astoundingly clear. Voters believe that they are compounding the cost-of-living crisis by making things more expensive." Populism!

@scottlincicome @FreeTradeBryan Who knew?

American support for international trade is at an all-time high (and, no, not just among Democrats)

@DTonPirates @DavidMTodd Wish you could have been advising Jose Tabata

If I was advising Konnor Griffin, there is zero chance I would let him sign any deal in the next 2 yrs. At that point I’d re-evaluate the situation. If Griffin is the star many think? It is not unrealistic to think he could sign a 10-yr $750M contract in 5-6 yrs. Caveat: I haven’t thought enough about how a work stoppage impacts this. #Pirates

@StevenJDuffield As a business proposition, the upside is huge. So many people nursing drinks and grudges at the same time.

AKA Hell

@PfHamburguesa @SteveRattner @Morning_Joe In the immortal words of HL Mencken, "democracy is the theory that the common people know what they want, and they deserve to get it good and hard."

Getting blue-collar/working people, who pay very little income tax proportionately, to clamor vociferously for tariffs that they pay at disproportionately high rates, is the biggest win for the elite classes in decades. Right out of the Epstein/Bannon playbook. If it’s part of your belief system, know that going in.

Trump said that tariffs may replace the income tax. That’s ridiculous. My @Morning_Joe Chart

@inumanak @FreeTradeBryan Chaos is a choice.

Bessent, recently: Refunds are “not up to the administration, it is up to the lower court, let’s just be clear on that.” Importantly, the tariffs were collected illegally. Importers should be refunded, full stop. To keep the tariff revenue is theft.

NEW: The Federal Circuit has ordered the Administration to respond to our Motion by Friday. A clear sign the court is prepared to act swiftly in the Supreme Court’s decision and pave the way for unlawfully collected tariff refunds. libertyjusticecenter.org/wp-content/upl… @neal_katyal

@kpomerleau @ericadyork The similarities are behavioral. Taxpayers will accelerate their investment spending in both cases if they can count on the refund.

@davidfrench @ericadyork Bonus depreciation changes relative prices. It reduces the cost of capital for new investment. A tariff refund does not change relative prices. It is a refund of a tax paid on past behavior. They have very different economic effects.

I hope everyone remembers how to understand tax incidence the next time someone wants to increase the corporate income tax rate or repeal bonus depreciation.

@alexanderbolton It doesn't have to be complicated. Customs refunds tariff overpayments all the time. The process is even electronic. Chaos is a choice.

Sen. Bernie Moreno (R-Ohio) rules out prospect of the administration or Congress sending out tariff refunds, says doing so would be unworkable: “We’re not going to issue refunds.”

@nut_history Mr. and Mrs. Coffee

Joe DiMaggio and Marilyn Monroe

Agree. Law is settled that customs duties collected without proper statutory authority constitute an illegal exaction. Plus process for correcting entries that have not liquidated or filing protests (within 180 days of liquidation for those entries that have liquidated) is well established. Yes, the volume of the work is extensive but it should be clear the importers are entitled to refunds.

@ByronYork With all that division, shouldn’t Congress be in the driver’s seat? Gorsuch’s concurrence is compelling on this point.

As a non-lawyer, I read Kavanaugh's opinion and am persuaded. I read Gorsuch and think he's got some good points, too. Then I see there are *seven* opinions and think it must be a really close, not-so-clear call. Given all that, I think: With all that division, maybe they should have deferred to the president's judgment. And I have the sneaking suspicion that Trump might have won, had he been a little less capricious in declaring tariffs, even using the same authority at issue in the SCOTUS case.

@DianeSwonk Refunds don’t have to be complicated. There is an existing process to refund tariffs. The government assured courts on several occasions that refunds would be provided in the event the court ruled tariffs illegal. Chaos is a choice.

Few more key points. Administration is accelerating the timeline on investigations for Section 232 & 301 tariffs. Those are harder to remove when they go into place than IEEPA tariff or the 122 that admin is using to bridge the gap. Section 122 are valid for 150 days, or require Congress approval to stay in place. Fast-tracking investigations on section 232 and 301 tariffs will likely eliminate that need. The threshold to retaliate has been lowered. EU weighing suite of packages they threatened to roll out in response to threats regarding Greenland. That is not insignificant. The 15% (instead of 10%) base rate would bring tariffs close to pre-Supreme Court decision ruling emergency powers that the president used illegal. Assuming old carve outs hold. The carve outs & tariff waivers were given mostly to tech behemoths as most inputs into data centers are imported. This is considered an AI arms race. The Supreme Court ruling did not deal with refunds, which will be complex & in their own assessment a “mess” to execute. Many large & small firms are seeking refunds but with no clear process on how to do that. The fact that they want refunds tells you who paid the initial tariff fees. These are US companies suing for refunds. Refunds will likely be adjudicated & difficult for all but the largest firms. There is no mechanism for consumers who have already paid tariffs to get those refunds. The near instantaneous levying of new tariffs means no rollback in prices. The level of prices are already too high for too many, which is one of many reasons we are seeking the breakdown between how most consumers feel about the economy and how it adds up on paper. The stock market is not the economy. However, much like stock returns compound to juice wealth, price hikes since we emerged from the pandemic have compounded to make the level of prices out of reach for too many. It is no coincidence that majority of Americans said that they believed the economy was in a recession during the blistering bout of inflation post pandemic. That is because they lost purchasing power, which means they lost ground - it felt like a rescission even though hiring soared NY Fed research shows that lower income households started to regain ground lost to earlier inflation, but at a price in late 2025. Credit delinquencies rose to highest level since 2017 in late 2025. Tariffs are a tax, mostly on importers (US firms) and consumers, which are forced to absorb those gains. That does not mean that foreign producers do not pay a price as well. They get hit on volume. Some producers abroad may even reduce prices to diffuse the effects of tariffs but evidence of that is scarce - some, not much. One more caveat. The vehicle producers absorbed much the margin compression due to tariffs. That showed up as layoffs. Even the steel industry, which was most protected by tariffs did not grow in jobs last year. The recent movement in the Japanese yen & South Korean won have now essential offset the cost of tariffs for imports of vehicles from those countries. In some cases, it is cheaper to import than build in the US. Law of unintended consequences kicks in. Worse yet, one of the biggest factors that affected the economic landscape in 2025 was not tariffs but a surge in uncertainty. High levels of uncertainty are a part of our DNA. We recoil or freeze when we are uncertain. It shows up in everything from decisions by companies to invest in new plants & hiring decisions to big investment decisions by households. That is less than ideal, even as we enter 2026 with a tailwind. The catch up to the government shutdown is occurring, while earlier tax cuts show up as larger tax refunds. The size is close in magnitude to what we paid in tariffs, all hitting consumer bank accounts in coming weeks.

@jawillick No. It wasn’t the behavior. The court found against the Government’s assertion that the law that allowed limitless maniac manipulations.

The Chief Justice might not like tariffs, but one thing I read in his opinion is that Trump's *manic approach* to tariffs particularly bothered him. Below is second page of opinion. I could imagine a more consistent & predictable IEEPA tariff being less judicially offensive.

@petereharrell Chaos is a choice. The smart choice would be processing the refunds quickly and efficiently.

On IEEPA tariff refunds: The IRS processed 117.6 million tax refunds in 2024 (according to its own data). CBP is a different agency with different IT. But there were only 34 million IEEPA tariff entries (as of mid-Dec.). The government doesn't have to make this hard....

@scottlincicome Where can I get another one? Mine is all worn out.

The t-shirt had a good week.

@jasonfurman @BharatRamamurti It's an excellent observation. This decision, more than most, seems to highlight the three different sects of the Supreme Court.

Question for you @BharatRamamurti: How do you respond to the argument that Jackson, Kagan and Sotomayor for supporting Biden actions--including student loans--but opposing this one?