Trump’s reciprocal prices could be canceled this month – and the administration warns economic apocalypse

On July 31, a federal court of appeal heard arguments in a case contesting the legal basis of prices under the International Economic Emergency Powers (IEEPA), and the judges expressed deep skepticism as to the side of the administration.

In a note last week, James Lucier at Capital Alpha Partners said that a decision was expected at the end of September, but could arrive at the end of August. An almost unanimous unanimous decision could give the Supreme Court a coverage to avoid taking the case immediately and rejecting the administration’s request to publish a suspension that would maintain the prices in place in the meantime.

Disastrous warnings also represent “a remarkable change in the administration phase, which until now has always insisted that he had the legal power to conclude transactions in one way or another even if the prices of the ieepa were canceled,” he added.

Trump’s “release day” prices have helped to take advantage of a series of commercial transactions, including an agreement with the European Union, which is committed to investing $ 600 billion in the United States and buying $ 750 billion in American energy products, with “large quantities” of American weapons in the mixture. Likewise, the American-Japan trade agreement includes $ 550 billion in Tokyo investments.

‘Financial ruin’

The United States has not received immediate cash transfers in these amounts. However, in a letter to the American Court of Appeal for the Federal Circuit on Monday, officials of the Ministry of Justice suggested that the government suddenly owed money to all – by putting disaster.

“The president considers that our country would not be able to reimburse the thousands of dollars that other countries have already committed to pay, which could lead to a financial ruin,” wrote Société Général D. John Sauer and the deputy prosecutor Brett Shumate.

They also warned that the relaxation of commercial transactions would lead to a “1929 style result”. This echoes a Trump article on the truth of social days earlier, when he predicted another great depression would strike America if the court settled against its prices.

Sauer and Shumate have increased the even higher volume in their later letter, developing more on the warning of depression.

“In such a scenario, people would be forced from their home, millions of jobs would be eliminated, the Americans who work would lose their savings, and even social security and health insurance could be threatened,” they wrote. “In short, the economic consequences would be ruinous, instead of an unprecedented success.”

“ The president is in a jam ”

Admittedly, the government has generated significant tariff income since April, and importers who have paid for reciprocal rights could request the reimbursement if they are canceled.

But this represents only $ 100 billion and also includes income from sectoral prices that have been imposed on a separate legal basis which is not at risk.

“The real problem, implies the letter, is that Trump does not have the legal power to reproduce the prices of the IEEPA in the context of other tariff statutes if the court drops the prices of the ieepa,” said Lucier. “In other words, the president is in a JAM because if the court strikes the prices of the IEEPA, its trade agreements have no legal basis.”

On Wednesday, a note of the research of Mardeni also stressed that the administration is increasingly concerned about the loss of the judicial case.

The letter of officials from the Ministry of Justice seems to anticipate that they will lose the case because they ask for a suspension if the court goes against them.

There will be “disorderly” consequences if the reciprocal prices are canceled, according to Mardeni, because Trump needs prices to reduce budget deficit and help reduce bond yields.

“If he loses before the court, these yields could increase.” So the disastrous tone of the letter is understandable, even if he is a little exaggerated. ”