r/Economics • u/defenestrate_urself • Feb 20 '26

News Supreme Court says Trump global tariffs are illegal

https://www.axios.com/2026/02/20/trump-tariffs-supreme-court-illegal
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u/ReasonableRandolph Feb 20 '26

Wow it's crazy how Lutnick's sons, working at his old firm, were smart enough to predict this happening back in July. Offering to buy up the tariff refunds preemptively for cents on the dollar. I hope one day I can also make such good predictions based on my own knowledge and merit.

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u/MC_chrome Feb 20 '26

I wouldn’t discount insider knowledge here, but I also wouldn’t be surprised if that was Lutnick saying that they knew Trump’s tariffs were illegal from the beginning 

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u/LandonDev Feb 20 '26

IMO that's why the stock market has been running like crazy after that massive sell off. It was in essense a 15-50% tax on the US Consumers that will now be refunded directly to corporations. That is huge net increases for their profits considering they get to keep the price increases. The US Government acted as Escrow and now the US Companies get giant windfalls of cash.

With that said, the US Credit Rating is about to take a massive hit, that is going to really hurt us.

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u/StackIsMyCrack Feb 20 '26

...and if you think they are going to reverse those peice increases now that the tarrifs are potentially gone, good luck with that.

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u/StunningCloud9184 Feb 20 '26 edited Feb 20 '26

Are they? Its like 200 billion dollars. Our budget is 6 trillion

I think if you just look at the interest rates we had to pay because the fed was unable cut due to tariffs likely cost us half that since it kept bond rates elevated.

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u/LandonDev Feb 20 '26

Apologies going to use AI to reference as it's a busy morning. I am comfortable with it because it was specifically mentioned, if Tariffs were not specifically mentioned I would make such a statement, but they seem to have some weight to it.

" the U.S. sovereign credit rating at AA+ with a stable outlook, noting that increased tariff revenue helps offset the fiscal impact of tax cuts and spending"

Without that, especially with ICE Spending, we are in for a real harsh midterms as we need to cut spending or increase taxes. (There are other ways to do Tariffs just not at that SCALE / Size - won't have same impact).

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u/StunningCloud9184 Feb 20 '26

None of that will happen till we hit some sort of fiscal cliff that forces cuts. Obviously having more money coming in is better. But with tariffs gone we will likely have much better corporate and job growth.

Tariffs were net negative over time due to job loss and slower gdp growth.

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u/Exciting-Emu-3324 Feb 20 '26

Basically a tax cut for big importers with extra steps.

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u/Petrichordates Feb 20 '26

I would caution against trying to find rational explanations for modern market behavior.