August 1st marked the day that Trump had indicated tariffs would go into effect for any country that had not negotiated a “deal”. In the end he blinked with respect to Mexico, giving them another 90 days. He has announced “deals” with the EU, Japan, and South Korea, all of which will have 15% tariff rates going forward. (I’m putting air quotes around “deal” because given how rapidly negotiations were conducted, it is far from clear that all parties have the same understanding of the agreement.) There was no “deal” with Canada, for which the tariff rate for goods not covered by the Trump 1.0-era USMCA will now be 35%, and those tariffs actually took effect on August 1st instead of August 7th as will be the case for most other countries.
The Federal Circuit did hear oral argument en banc last week in its IEEPA tariffs case, V.O.S. Selections vs. Trump, and that argument didn’t seem to go well for the government although it is still hard to know what will happen here. Still, absent a judicial rebuke of Trump’s interpretation of the IEEPA (coupled with a Congressional refusal to enact Trump’s tariffs after the fact), the United States is entering a whole new world of international trade. But to what useful purpose? Supply chain management professor Zachary Rogers made the following observation this week:
“Right now, a finished car from Japan carries a 15% tariff. Conversely, a car built in the U.S will come with the following: 50% tariff on steel, aluminum, and copper, 40% tariff on components from China (rare earths, batteries), 25% on components from South Korea (electronics), 25% on components from Mexico, and 35% on components from Canada. Plus, you have to pay high U.S. labor costs. In this scenario, the imported finished car from Japan looks pretty good.”
The risk of stagflation appears real. But will we know it? On Friday Trump took the unprecedented step of firing the non-partisan head of the Bureau of Labor Statistics, after the July jobs report showed significant downward restatements in the previously reported jobs figures for both May and June. A year ago during the campaign, Trump had made unfounded accusations that the Biden administration had, for political purposes, been reporting overly rosy jobs figures that then got downwardly restated. Now that similar downward restatements have occurred on his watch, he still suspects a political motive. Separately, economists have noted this week that, over the past 3 months, the government’s use of estimates rather than actual data in the computation of inflation statistics has dramatically increased (possibly because of DOGE-related cuts in the government). All of this is leading an increasing number of people to use the phrase “banana republic” in connection with the U.S.A.
Oh, and this week the EPA proposed revoking its 2009 “endangerment finding”, which has served as the lynchpin of federal efforts to address climate change. This reflects a perspective that federal climate regulations are actually contrary to the public interest, as they lead to increased car prices and decrease consumer choice for cars.
Oh, and recently the administration had negotiated a prisoner swap with Venezuela, in which hundreds of Venezuelans held at the CECOT facility in El Salvador were traded for ten American citizens and permanent residents held in Venezuelan prisons. Except, only nine of the ten were “political prisoners” in any conceivable meaning of the term. The tenth has admitted to having committed a triple murder in Spain but ran to South America and eventually was arrested and tried for the Spanish crime by officials in his birth country, Venezuela. After serving less than 7 years of a 30-year sentence, the man is now apparently living free in the U.S. Terrific diplomacy, there.
Oh, and there was a shadow docket decision this week in a case called Trump v. Boyle, filed by two members of the Consumer Product Safety Commission who Trump fired without cause in early May, contrary to existing law. Two months earlier SCOTUS had issued an order in a similar shadow docket case, Trump v. Wilcox, allowing a similar firing of officials to take effect while they continue litigation to prevent it, even though a 1935 SCOTUS precedent called Humphrey’s Executor would indicate that these firings should not be allowed. The same 3 liberals who had dissented in Wilcox also dissented in Boyle, noting this time that “only another under-reasoned emergency order undergirds today’s.” But interestingly, this time Kavanaugh also wrote separately to say that while he agreed with granting a stay, he also would have granted certiorari so that SCOTUS could hear this case now (and adding that he also would have done the same two months ago in Wilcox), speeding matters up.
Oh, and Emil Bove was indeed confirmed by the Senate to a seat on the 3rd Circuit, 50-49, with the only Republican nays being Collins and Murkowski. Disappointing to see lame ducks Tillis and McConnell fall in line here.
Oh, and a piece of crypto legislation called the GENIUS Act was recently signed into law, while another piece of crypto legislation called the CLARITY Act has passed the House and is now being considered by the Senate. I don’t know much about either bill, but I do know that they don’t ban cryptocurrency entirely, and any bill that doesn’t do that is bad crypto legislation as far as I’m concerned. Unfortunately for sound public policy, the crypto industry has thrown too much money at politicians in general, and Trump in particular.
So yeah, things are going just great.
Not everything is on fire, mind you. The situation in Los Angeles has fizzled out, with the Marines and about half of the federalized California National Guard having been withdrawn a couple of weeks back. And the Iran-Israel conflict seems to have completely subsided after Trump’s brief unilateral military action. Of course, there’s still Gaza. And Ukraine. And Trump advertising that he has just sent two nuclear submarines to “appropriate regions” near Russia.
The Epstein saga remains a major story, however. It was burning so hot several days ago that Speaker Johnson actually sent the House home for its summer break a day early, out of fear that in that remaining day there might be some uncomfortable votes relating to calls for further transparency on Epstein. Since then, Deputy Attorney General Blanche took the extraordinary step of personally interviewing Ghislaine Maxwell in prison for two days, after which she has been transferred to a minimum-security facility. Let’s pause to remember Maxwell is serving a 20-year sentence for child sex trafficking. There’s speculation that Maxwell may ultimately receive a commutation or pardon in return for (potentially perjurious) testimony to Congress that exonerates Trump. In the meantime, there is reporting that the FBI spent vast amounts of time this spring going through the Epstein files and redacting any references to Trump.
And with Epstein simmering, Trump has sought to change the subject with a continuation of his grievances over 2016 and 2020, recently accusing President Obama of treason while DNI Gabbard alleged “a years-long coup and a treasonous conspiracy against the American people, our republic, and an effort to undermine President Trump’s administration.” Substantiation of these accusations has not occurred in the 10 days since the words were uttered, nor have any charges been filed against anyone.
There was, however, just an announcement that former Special Counsel Smith would face an investigation for potential violations of the Hatch Act. Even if one were to find such violations, since the remedy is removal from government service and Smith is no longer a government employee, any such investigation would seem pointless. Seems like there’s a phrase for those types of investigations, it’s on the tip of my tongue… ah yes, “witch hunt!“.