Court order on Trump tariffs: how much of a setback is it for Trump?

The Court of International Trade has ruled that President Trump wrongly used emergency powers to impose the tariffs he announced on Liberation Day, May 2. 

How big a setback is it for Trump? A column in FT indicates several ways open to Trump:

The so-called section 232 tariffs on cars and steel are unaffected by the ruling. Trump will appeal this decision to the federal circuit court; beyond that he has a pliant Supreme Court waiting for him if need be; there are other obscure pieces of decades-old legislation he can dust off to resume his tariff campaign. 

The American Congress has the legal powers to restrain the President of the United States. Over the years, Congress has progressively ceded these powers so that the President has a free run in most matters. Only Congress has the right to declare war. But American presidents have, for decades, initiated steps that led up to war without Congressional approval. There are numerous articles on the subject. Here is one:

President Ronald Reagan invaded Grenada. President George H.W. Bush invaded Panama and Somalia. President Bill Clinton used military force in Iraq, Haiti, Bosnia, Afghanistan, Sudan and Kosovo all without congressional approval. (President George W. Bush didn’t declare war on Afghanistan or Iraq, but Congress authorized the use of military force for those engagements). President Barack Obama ordered targeted military strikes in Libya in 2011 and dozens of unmanned drone strikes in Pakistan without congressional approval.

The courts have not stepped in either in these matters. So it's a bit of a stretch to think the courts will attempt to interfere in matters of economic policy, such as President Trump's position on tariffs. 

The difficulty for the Trump administration is that clearing the hurdles posed by the judiciary in this matter will prolong uncertainty and create turbulence in the markets. The challenge is not pushing through tariffs per se as ensuring that the markets do not spin out of control in the interim. 

Academics and the allurement of stardom

Everybody was shocked to hear of the firing of Francesca Gino at Harvard Business School. It's not called firing, it's called "revocation of tenure". Tenure grants academics the right to stay on for as long as they wish- there's no retirement, officially, although most academics do hang up their hats at some point. 

This was the first instance of a tenured faculty being asked to leave at Harvard in about 80 years since the system of tenure was introduced to create conditions necessary for independent scholarship. Gino had to leave after HBS concluded that she had falsified data in several papers she had published. 

The Economist has a story about a graduate student who seems to have similarly succumbed to the allurement of attaining stardom through publishing. An unpublished paper written by a high-flying graduate student has been withdrawn by MIT and the student's personal website taken down.

Empirical papers are especially prone to falsification because the potential for falsification is much greater than in theoretical research. The pressures to publish even at the graduate level are considerable:

More than in other disciplines, success depends on a few high-stakes events. Job-market candidates are evaluated on a single paper, rather than a body of work. Because institutional pedigree and advisers carry lots of weight, young researchers may face pressure to overstate results.

Tenure makes academics very attractive- and at least at business schools, the pay is pretty good at least some disciplines: accounting, finance, marketing.  And tenure is contingent on publishing. The temptation to get in papers in through data manipulation is large.

Data manipulation is a different problem from plagiarism. There are reasonably effective tools to detect plagiarism today. But somebody playing around with a dataset has a greater chance of getting away with it. 

100 days of Donald Trump: demolishing to rebuild

Paul Dans, the author of Project 2025, the grand plan prepared by the Heritage Foundation in anticipation of Trump's victory in the 2024 elections, argues that Trump is the quintessential builder who has to demolish first before he can rebuild.

What needs to be demolished is the present edifice of government. It costs $7 trillion to run it with a budget deficit forecast of $1.9 trillion. More importantly, it delivers little to the people. It is of the bureaucracy and for the bureaucracy, an unelected and unaccountable lot whom Trump is now bringing to heel:

But what exactly does the American citizen get for $7trn? A country falling apart and potentially unable to defend itself.

Supply shocks from covid-19 underscored the strategic danger of a hollowed-out industrial base in the 21st-century global economy. Next came depletion of weapons stocks during the Ukraine war, raising concerns that we might no longer be able to defend ourselves because we lack productive capacity. America may lead in innovation and intellectual property, but what about good old-fashioned gunpowder? We have a single factory in all of America that produces it. And steel and heavy industry? Following a push under Barack Obama’s Environmental Protection Agency, America dismantled many of the coal- and nuclear-power plants required to sustain the electric load needed to power that production. How can a country serve as the arsenal of democracy when it takes seven years to restock the stinger missiles sent to Ukraine?

The economy needs to remade with manufacturing being brought back to the US in a big way. The bureacuracy will not do the job, so it has to be demolished first. 

That sounds plausible. But Dans takes the argument further. Apart from the bureacuracy, who is coming in Trump's way? Well, it's an activist judiciary:

Historically courts preserved their own legitimacy by abstaining from political questions decided by the other two branches of government. District courts have now crossed this red line and stepped into a constitutional minefield, imposing their political views on issues that are clearly the province of the executive.

The judiciary can afford to be activist because it has the support of the universities and Big Law (which is the big legal firms that fight pro bono for the establishment ranged against Trump).

Now, you begin to understand why Trump has gone after top law firms and why he is swinging his axe at the nation's top universities: they are a threat to his attempt to remake the United States.

The remaking of the US is not just about remaking the economy with pride of place for manufacturing. It's also about remaking the important political institutions of the country, including the judiciary. 

You have to give this to Dans: he's pretty clear about what Trump's followers want to accomplish.