After facing an embarrassing question about why he “always chickens out,” Donald Trump got even worse news Wednesday evening when a federal court ruled that his cherished tariffs were imposed on US trading partners illegally.
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It wasn’t Donald Trump’s day. First, he learned that Wall Street has coined a non-flattering term to describe his habit of talking tough on tariffs before later reversing course. They called it, “Trump always chickens out” (TACO), and the president did not appreciate being asked about it in the White House on Wednesday.
“Don’t ever say what you say, that’s a nasty question,” Trump chastised a reporter who dared to ask him about the acronym. “To me that’s the nastiest question.”
It’s easy to see why the president doesn’t like the term. First of all, he hates being made fun of more than anything, so finding out on live TV that he is being mocked behind his back is obviously going to be triggering.
Second of all, the term, while apt, goes against the tough guy negotiator persona that Trump has been trying to establish ever since journalist Tony Schwartz ghost wrote The Art of the Deal.
Predictably, the president pushed back.
“They will say ‘Oh, he was chicken, he was chicken,’ that’s so unbelievable,” he bristled in response to a question about the EU tariffs he announced and almost immediately paused last week. “I usually have the opposite problem — they say you’re too tough!”
In reality, Trump is a classic bully who tries to take advantage of those he perceives to be weaker but then quickly backs off when he gets any sort of pushback.
The tariffs are a perfect example.
Every time Trump has announced tariffs this year, he has quickly backed off and either paused them or scaled them down.
This has led Wall Street traders to bet on these reversals, which is the origin of the term TACO.
However, they may soon have to find a different way to make money off of Trump’s flip-flopping… and the president will have to find a new tool to bully smaller countries.
That’s because a federal court later on Wednesday ruled that Trump exceeded his authority in declaring the tariffs in the first place.
The president has justified them by claiming national emergencies related to trade and drug trafficking.
That is illegal, a three-judge panel of the US Court of International Trade said in its unanimous ruling.
As a result, it struck down the tariffs imposed on Canada, Mexico, and China for not doing enough to prevent the flow of fentanyl into the US.
In addition, the court also said that Trump’s “reciprocal” tariffs on dozens of other countries were illegal as well. The president announced them last month, and they were supposed to go into effect in July.
The administration claims that the threat of tariffs would force many countries to the negotiating table. However, so far, only a minor trade agreement with Great Britain has been reached.
While the decision will be welcome news to investors and US businesses, which either would have had to absorb the cost of the tariffs or pass them on to consumers, it is a blow to the centerpiece of the president’s economic agenda and the latest setback he has suffered in the courts.
Since the start of his second term, Trump has invented national emergencies to grant himself sweeping powers related to trade and immigration.
However, for now, lower courts have blocked many of these unconstitutional efforts.
The big question, of course, is what will happen when the Supreme Court with its 6-3 conservative majority and a history of voting in Trump’s favor gets to rule on these cases.
For now, however, those worrying about the lasting damage his trade war will do to the world economy (and to that of the US) can breathe a sigh of relief.
