Bloomberg Talks: Dartmouth's Douglas Irwin Talks Blanket Tariffs

Date: February 24, 2026
Host: Bloomberg
Guest: Douglas Irwin, Professor of Economics at Dartmouth College

Overview

In this episode, Bloomberg sits down with Professor Douglas Irwin, a leading expert on trade policy from Dartmouth, to dissect the current landscape of US tariffs, the implications of recent Supreme Court and White House actions, and the broader economic, political, and diplomatic fallout. The discussion is timely, as new blanket tariffs are imposed by President Trump’s administration, and legal challenges intensify alongside Congressional uncertainty. Professor Irwin’s historical lens and policy insight shape a thorough, accessible exploration of why tariffs matter, who pays for them, and their far-reaching consequences.

Key Discussion Points & Insights

1. Recent Tariff Developments and Legal Complexity

• The White House has reimposed tariffs using a different statutory authority following a Supreme Court decision that temporarily paused them.
• The new authority allows tariffs in cases of "balance of payments deficit or disequilibrium"—but, as Irwin notes, this concept may be outdated (02:20).
• Legal battles are likely: “Those will probably be subject to legal challenge… And it's not clear that in the era of floating exchange rates whether such a thing exists anymore… The tariffs can only be in effect for 150 days and then require congressional approval.” — Douglas Irwin (02:20)
• This creates significant uncertainty through the coming months.

2. Who Pays for Tariffs? Economic Consequences

• Multiple studies confirm that American companies and consumers directly bear most of the tariffs’ cost.
• “The importer in the US actually writes the check, but then they pass it on… That Fed study… has been sort of replicated… 90% of the tariffs get passed through to domestic purchasers, either final consumers or businesses along the way.” — Douglas Irwin (04:50)
• The host reiterates: this has major economic consequences and is widely validated by research.

3. Tariffs in Historical Context

• Historically, tariffs were Congress’s domain—part of the constitutional tax power; delegation to presidents only accelerated post-WWII, first for tariff-reducing trade deals, recently reversed by Trump’s protectionist pivot.
• “This administration marks such a sharp break from what we've seen in terms of historical experience… authority starts being used to increase tariffs once again across different products, across different countries…” — Douglas Irwin (03:18)
• The 1890 McKinley era is referenced as a precedent where voters rejected high tariffs, suggesting 2026 might see political parallels (06:08).

4. Political Stakes: Congressional Reluctance, Elections, and the ‘Affordability Agenda’

• After 150 days, tariffs need Congressional re-approval, possibly turning them into a toxic issue for divided Republicans before midterms.
• “Does Congress want to vote for higher tariffs in the summer before midterm elections…? I don’t think so. So… tariffs could be toxic come this fall.” — Douglas Irwin (06:08)

5. China-US Trade Tensions and Retaliation Risks

• The US and China are in an uneasy truce, particularly regarding rare earths and further tit-for-tat measures.
• “What Beijing is looking for is stability… and that's exactly what we don't have… Beijing… probably won't do much until it sees what the administration wants.” — Douglas Irwin (07:05)

6. Supreme Court Rebates and Administrative Hurdles

• The Supreme Court ruling opens the door for importers (e.g., FedEx) to seek rebates for emergency tariffs, but there’s no clear process yet.
• “No process has been identified, at least as far as I know, about what the process will be to adjudicate all those claims…” — Douglas Irwin (08:04)

7. Revenue vs. Policy: Are Tariffs Financially Necessary?

• While tariff revenue is important, Irwin highlights the legal and administrative complexities of rebates and the questionable need for this revenue.
• “It's not a matter of government have the money, but can they go back through the records and isolate those firms that actually paid the tariffs in the first place.” — Douglas Irwin (08:53)

8. Trade, Technology, and American Leadership

• Trade restrictions hurt technology spread, R&D relationships, and overall US leadership; but technology will “march to its own drummer.”
• “Trade disrupts that process of spreading technology… inhibits our ability to export… and disrupts all the business relationships that are needed… not good for our technological development.” — Douglas Irwin (09:50)

9. Congress’s Role: Reasserting Authority Over Tariffs?

• The Supreme Court’s message to Congress: reclaim its constitutional responsibility over tariffs.
• “It certainly was a wake up call and some of the justices really did call out Congress, not so many words… it's really your responsibility under the Constitution.” — Douglas Irwin (10:42)
• Whether Congress acts under Trump is doubtful; longer term, reform is possible.

10. Free Trade in a Geopolitical World

• Irwin distinguishes between ‘free trade’ in the abstract and ‘free trade with free nations,’ reflecting current national security concerns.
• “We have to think about trade as part of our alliance system… and separating out those countries that are adversaries.” — Douglas Irwin (11:25)

11. Why Tariffs on Friends? The Canada Question

• The US’s hard stance on Canada—despite decades of peaceful trade—“just doesn’t make sense,” possibly reflecting personal politics or misaligned priorities.
• “It just doesn't make sense that here we've had peaceful, cooperative relations… and yet we're jeopardizing that with these trade wars.” — Douglas Irwin (12:34)

12. Advice to Vulnerable Politicians

• Midwest farmers hurt by retaliation should push for better US export opportunities—Congress members must differentiate from the president on trade.
• “Midwest farm states… have been hammered with foreign retaliation… They have to offer… some sort of promise that there's better days ahead in terms of the ability of the US Farmers to export…” — Douglas Irwin (13:32)

Notable Quotes & Memorable Moments

• “The Supreme Court… did [the President] a favor by trying to put these tariffs on pause. But… the president has just reimposed these similar tariffs using different authority.” — Douglas Irwin (01:39)
• “90% of the tariffs get passed through to domestic purchasers, either final consumers or businesses along the way… confirmed by at least half a dozen other studies.” — Douglas Irwin (04:50)
• “Congress would act with great trepidation in trying to pull back some of the powers it’s delegated… but I think there is a medium term agenda… to ensure we don’t go through the mess and the muddle that we’ve gone through.” — Douglas Irwin (10:42)
• “Free trade with free nations… we have to think about trade as part of our alliance system.” — Douglas Irwin (11:25)
• “It just doesn't make sense… we’ve had peaceful, cooperative relations with this great neighbor… yet we're jeopardizing that with these trade wars.” — Douglas Irwin (12:34)

Timestamps for Key Segments

• 01:39: Immediate reaction to Supreme Court ruling and new tariffs
• 02:20: Legal outlook on new tariffs and challenges
• 03:18: Historical context: Congress vs. Presidential power on tariffs
• 04:50: Who really pays for tariffs?
• 06:08: Political risk: tariffs, elections, and historic parallels
• 07:05: China policy, stability, and negotiation
• 08:04: Rebates, FedEx lawsuit, and administrative hurdles
• 09:50: Trade, technology, and U.S. leadership
• 10:42: Will Congress reclaim tariff authority?
• 11:25: Relevance of free trade today
• 12:34: Tariffs on Canada—logic and politics
• 13:32: Advice to Republicans in farm states

Tone and Style

The conversation is brisk, analytical, and at times wryly humorous, referencing both historical parallels and real-world policy implications. Professor Irwin is incisive yet approachable, often contextualizing complex issues in accessible, real-world terms.

This summary is designed to provide a comprehensive, timestamped map of the episode’s central arguments, helping listeners grasp the full sweep of issues surrounding US tariff policy and Professor Irwin’s unique expertise.