Trump Tariffs: An Increasingly Costly Mistake

A Bloomberg analysis of the tariffs imposed by Donald Trump, calling them an "increasingly costly mistake." The initial imposition of tariffs, based on the International Emergency Economic Powers Act (IEEPA), faces legal challenges.

The U.S. Federal Appeals Court upheld a ruling that the Trump administration acted illegally. The Supreme Court will expedite the review of the case, with hearings likely to begin in November. If the Supreme Court rules the tariffs invalid, the government may need to revoke them.

Tariffs under IEEPA affect trillions of dollars in trade, accounting for 61% of estimated import duties. On average, they cost about $500 million per day. If they need to be returned, the cost could exceed $130 billion by the end of the year.

The abolition of tariffs may benefit companies, but it is unclear how they will seek compensation. The government may impose replacement measures under other laws. Tariffs slow growth, increase costs and consumer prices.

Putting tariffs on a healthier legal basis will not undo the damage already done. It is better for the White House to let them expire.