While I Was Gone, Part 1: Trade Policy Updates || Peter Zeihan

About this video

• Video Title: While I Was Gone, Part 1: Trade Policy Updates || Peter Zeihan
• Channel: Zeihan on Geopolitics
• Speakers: Peter Zeihan
• Duration: 00:04:46

Overview

Peter Zeihan discusses recent developments in US trade policy, focusing on a court ruling that declared most of Donald Trump's tariffs illegal. He explains the constitutional basis for Congress's authority over tariffs and how Trump's expansive use of executive power in this area has been challenged. The video also touches upon the lack of staffing in key trade-related government offices and the implications of this uncertainty for American manufacturing, suggesting a potential de-industrialization trend.

Key takeaways

• Tariff Illegality: A US federal appeals court ruled that most of Donald Trump's recently executed tariffs are illegal under current law, specifically that a trade deficit cannot be declared an emergency to justify tariffs.
• Constitutional Authority: The US Constitution grants Congress the authority to set tariffs, and while some power has been delegated to the president over decades, Trump's assertion of this power was unprecedented.
• Supreme Court Review: This ruling will likely go to the Supreme Court, creating significant doubt about Trump's economic and foreign policy, which heavily relied on these tariffs.
• Government Understaffing: Key government bodies responsible for trade, such as the US Trade Representative office and the Commerce Department, remain understaffed, hindering the ability to negotiate new trade deals.
• Impact on Manufacturing: The uncertainty surrounding trade policy and the structure of tariffs (taxing components as they enter the US) is leading to the de-industrialization of American manufacturing, as companies are incentivized to produce goods entirely outside the US.
• Future Uncertainty: Regardless of the Supreme Court's decision, the US faces either a significant setback and the need to restart trade policy from scratch or an acceleration of de-industrialization, creating prolonged uncertainty for businesses.