Balance of Power — Podcast Summary
Episode: Trump Charts New Tariff Path
Date: February 23, 2026
Host(s): Joe Mathieu & Kailey Leinz (Bloomberg)
Key Guests:
- Jeff Mason (White House Correspondent)
- Michael McKee (Bloomberg, at NABE Conference)
- Lori Wallach (Director, Rethink Trade, American Economic Liberties Project)
- Cliff Young (Ipsos, Texas A&M Prof.)
- Rick Davis (Republican strategist)
- Jeannie Shan Zaino (Democratic analyst)
Episode Overview
This episode explores the fallout from the Supreme Court’s ruling limiting President Trump’s tariff powers, his administration’s new pathways to maintain tariffs, the economic and political implications, and what to expect in the looming State of the Union speech. The hosts and guests examine the complexity of trade law, market uncertainties, refund debates, the politics of tariffs, and the broader political context as the administration navigates midterms and foreign policy crises.
Key Discussion Points & Insights
1. Trump’s Post-Supreme Court Tariff Strategy (00:55–04:00)
- Supreme Court Ruling: The Supreme Court struck down tariffs imposed under the Emergency Economic Powers Act (IEEPA).
- New Approach: Trump administration pivots to section 122, and possibly 232, 301, and even the little-used section 338.
- Timing Pressure: Section 122 gives only 150 days (expiring July 24) for tariffs, pushing urgency for a more permanent solution.
Quote:
“It is 122 for now, but he’s got 150 days there if you want to add more numbers...301 is going to be the longer term solution here.”
— Kelly Leinz (01:29)
- Political Will & Legal Constraints: While Trump’s team is eager to act quickly, Jeff Mason notes due process is required with 232/301, which need investigations that can't be rushed illegally.
2. Markets, Uncertainty, and Economic Impacts (04:42–07:17)
- Market Reaction: Market uncertainty is high because of unclear tariff policies, investigations, and potential retaliation.
- Central Bank Focus: At NABE, central bankers (incl. Fed’s Chris Waller) are more focused on labor markets; Waller suggests current tariffs are not a long-term inflation threat.
- EU Response: European Union puts US trade deal “on ice,” increasing global uncertainty.
Quote:
“It just leaves everybody sort of up in the air and just continuing on the way they have been now.”
— Michael McKee (06:30)
3. The Alphabet Soup of Trade Law — What Can Trump Do Legally? (07:46–13:23)
- Legal Pathways & Limits:
- Section 122: Tariffs capped at 15% for 150 days.
- Section 232: Requires a national security finding; no tariff cap or time limit.
- Section 301: Requires a finding of unfair practices; same flexibility as 232.
- Section 338: Not used since WWII; could allow up to 55% indefinitely if US interests are found to be discriminated against.
- Procedural Timelines: Investigations under 232 and 301 can be expedited but still take months; 301 can be done in 4–5 months “with enough people.”
- Political & Legal Risks: Democrats signal no extension of 122 in the Senate; a legal challenge to the 122 justification is likely, but a ruling within five months is doubtful.
Quotes:
“There are other legal grounds that actually allow quite high tariffs...Section 338...allows up to 55.0% for an unlimited amount of time…”
— Lori Wallach (08:45)
4. The Refund Debate and Who Pays (13:23–18:09)
- Refund Mechanisms: Complex logistics if tariffs are ruled illegal—who gets refunded, and how much?
- Big Company Advantage: Large corporations may have pushed tariff costs onto suppliers or consumers, complicating fairness.
- Political Theater: Some politicians call for direct refunds to households, but that’s not likely.
Quotes:
“There’s a history of tariffs being refunded ... the tariffs were so broad ... there’s a big question where there's a gap between who is booked at customs ... and who actually paid.”
— Lori Wallach (14:28)
“That's as fair a way of doing it [direct refund] as any ... really anything that's going to come out, there's going to be an unfairness.”
— Lori Wallach (16:52)
5. Polling, Public Perception, and Midterm Political Dynamics (21:10–29:30)
- Affordability as Issue: Despite administration claims of victory over inflation, affordability remains voters’ number one concern.
- Approval Ratings: President’s approval on cost of living is notably weak (about 30%).
- GOP Faction Divide: MAGA base is solid for Trump (70–80% support on tariffs), but non-MAGA Republicans show far less support (~45%).
- Swing Voters: Independents and moderate Republicans may determine midterms; “Neither” option in polls is sizable and key.
- State of the Union: Expectation is for a dramatic, possibly divisive address aimed at energizing the base.
Quotes:
“When you talk to the average American today, they are having problems still making ends meet. It's about cost levels. It's not about inflation.”
— Cliff Young (23:22)
“The MAGA base will be with Trump until the end ... it's really ... about those moderate Republicans and whether they vote on election day.”
— Cliff Young (27:07)
6. State of the Union — Anticipated Rhetoric and Political Theater (29:56–31:41)
- Likely Themes: Strong-on-tariffs, affordability, foreign policy (esp. Iran).
- Tone Forecast: Consensus-building gestures unlikely; expect base-energizing drama.
- Potential Breaking News: There is speculation whether Trump might announce Iran strikes live from the rostrum.
Quotes:
“There is a likelihood of having a much higher likelihood of having a non traditional State of the Union.”
— Cliff Young (29:27)
“He is a theatrical genius ... we're going to see theater on Tuesday night.”
— Rick Davis (36:10)
7. Foreign Policy Stakes — Iran and Presidential Power (33:04–40:55)
- Possibility of Military Action: Build-up in Middle East and talk of “bloody nose” strikes against Iran; panelists discuss whether Trump would announce such action during the State of the Union.
- Congressional War Powers: Broad consensus in Congress, even across parties, that tactical strikes do not necessarily amount to “war” in the traditional sense.
Quotes:
“The president has a moment in the State of the Union before he engages in limited strikes to explain.”
— Jeannie Shan Zaino (36:49)
8. Notable Lighter Moments
- US Hockey Victory: Celebrations over US men’s and women’s hockey golds potentially providing a rare moment of congressional unity during the SOTU.
- Mockery of "Alphabet Soup": Repeated references to the convoluted nature of trade law and the proliferation of “Sections” and numbers.
Notable Quotes & Memorable Moments
-
On Policy Uncertainty:
“It just leaves everybody sort of up in the air.”
— Michael McKee (06:30) -
On Legal Limits:
“Section 122 is maximum 15% for a balance of payments problem for only five months. The other ones, the three of them, 301 and 232 have gone through the courts and have been declared fine. 338, more of a mystery...”
— Lori Wallach (09:37) -
On Political Dynamics:
“You've got to be very careful not to create dissonance ... when you talk to the average American today, they are having problems still making ends meet.”
— Cliff Young (23:22) -
On the State of American Politics:
“We live in a divided country today. 50/50, I guess. 1/3, 1/3, 1/3.”
— Cliff Young (26:19) -
Regarding Refunds:
“Honestly, as a trade lawyer, I would say the question is not an if, it's actually a how question.”
— Lori Wallach (14:28)
Timestamps for Key Segments
- 00:55 — Discussion begins on Trump’s response to losing tariff authority after Supreme Court ruling
- 04:42 — Market/economic implications with Michael McKee
- 07:46 — Lori Wallach explains specific legal pathways for new tariffs, limits and timelines
- 13:23 — Refunds and legal challenges around past tariffs
- 21:10 — Cliff Young: Polling, public perception, Republican divisions, and implications for midterms and SOTU
- 33:04 — Foreign policy on Iran, military buildup, and what the SOTU could bring; panel with Rick Davis & Jeannie Shan Zaino
- 40:55 — Lighter moment: US hockey team’s victory as possible SOTU highlight
Tone & Language
The conversation flows with a mix of technical policy analysis, political wit, and real-time speculation—typical of Bloomberg’s brisk, informed, sometimes irreverent DC-insider tone. The “alphabet soup” of trade law is a recurring running joke (“I’m getting a popsicle headache… you’re not alone.” — Kelly, 01:29), while broader political context is addressed with candor about division and dissonance in the electorate.
Conclusion
This episode provides an in-depth look at the evolving trade strategy and political calculus following the Supreme Court’s tariff decision, with expert insight on the legal, economic, and political angles as the administration faces a ticking clock and high-stakes midterms. The State of the Union looms as a crucial moment for the president to clarify his vision on trade, foreign engagement, and affordability, all against a backdrop of deep national division and a skeptical electorate.