Dartmouth's Douglas Irwin Talks Blanket Tariffs

Summary

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allows tariffs in cases of "balance of payments deficit or disequilibrium"—but, as Irwin notes, this concept may be outdated (02:20).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.

Transcript

[Host]

Support for the show comes from Public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash. All investing involves risk of loss. See complete [e-mail] Disclosures

[Announcer]

Bloomberg Audio Studios

[Douglas Irwin]

Podcasts Radio News I will not mince words.

[Interviewer]

This is a required read for anybody inside the Beltway this morning. It is a book from a time ago, Paul, you walked around because you were cool, because Douglas Irwin had a book with a sailboat on the COVID light blue book. It was against the tide and it was absolutely definitive. I read every word of it. And we're thrilled that Professor Irwin could join us from Dartmouth today. Let me just get out of the way. Doug Irwin, a cup of coffee with the president this morning as he prepares his State of the Union. What would be your counsel to President Trump?

[Douglas Irwin]

I don't think you'd want to hear anything I'd have to say. I'd say the Supreme Court gave him a. Did him a favor by trying to put these tariffs on pause. But of course, the president has just reimposed these similar tariffs using different authority. So it had, it was a very important decision. It was very historic one, but just shunted the president using different statutory authorities to levy tariffs and he's going to move forward with them.

[Interviewer]

Will we see a legal battle of these new tariffs, Claudia? Sam, it's away from her remit, which is monetary economics. But Professor Irwin, do you just assume further legal battles about 10% or 15%, 120, whatever. 230. This.

[Douglas Irwin]

Yeah. A lot of numbers being thrown around in terms of the statutes. Yes. So the new tariffs, which are 10%, he's promised 15%, but they haven't issued the executive order on that quite yet. Those will probably be subject to legal challenge. And that's because the statute allows for the president to impose Tariffs in the cases of a balance of payments deficit or disequilibrium. And it's not clear that in the era of floating exchange rates whether such a thing exists anymore. Now the other side is that the tariffs can only be in effect for 150 days and then require congressional approval. So there's a lot of uncertainty about how this is going to play out over the next couple months.

[Host]

Professor I guess most of our viewing and listening audience, what they know about tariffs they've learned over the last, I don't know, six, seven, eight years, which is just massive tariffs on all types of countries, all types of products across the board. But typically how are tariffs historically used and how can they be most useful?

[Douglas Irwin]

Well, that's really why this administration marks such a sharp break from what we've seen in terms of historical experience. You know, you probably mentioned Smoot Hawley on the air over the past couple of years. Before that, actually Smoot Hawley itself, Congress determined tariffs. It's part of the legislative power of tax. It's in Article 1, Section 8 of the Constitution. And it was basically Congress's decision what to do. Then powers began being delegated to the President and we entered the era after World War II of the President negotiating trade agreements to reduce tariffs. And the tariffs have been sort of on a one way path down since World War II. And that's when enter Trump and all of a sudden that same authority starts being used to increase tariffs once again across different products, across different countries in all manner of way worldwide and across the nation.

[Interviewer]

This morning, Douglas Irwin of Dartmouth College. He is our definitive expert on trade. Only standing with him is Barry Eichengreen of Berkeley. We'll get Professor Eichengreen in a bit out with his new book. Paul Sweeney with Professor Irwin.

[Host]

Professor, we had the New York Fed come out with a report I guess a week or so ago that said, you know, 90% ish of the tariffs have been borne by the American economy, either importers, companies and even consumers. Obviously the White House pushing back on that. Who pays? Who pays really at the end of the day for tariffs?

[Douglas Irwin]

Well, the importer in the US actually writes the check, but then they pass it on to whoever they're selling the products to. And it sort of goes along the value chain. That Federal Reserve, that Fed study, it's been sort of replicated that finding that 90% of the tariffs get passed through to domestic purchasers, either final consumers or businesses along the way. That's been confirmed by at least half a dozen other studies. So Study after study has sort of consistently shown that both for the Trump first term tariffs as well as these most recent ones.

[Interviewer]

Madeleine Marshall has a fabulous video out at the Wall Street Journal. I put it out about a week ago, folks. I'll redo that with the academic input of Douglas Irwin. Doug, your three hours of trade policy, revenue restriction, reciprocity. We're not going to do a quiz at the end of the interview, but Professor Irwin, they're very chronological and what I find interesting is the restriction using high tariffs to restrict imports of McKinley and post civil war America. I mean they were all shown the door in the, in the voting in 1890. The Republicans, including McKinley basically lost their jobs. Do you anticipate that In November, a McKinley 1890 kind of vote by America?

[Douglas Irwin]

Well, that's a very interesting historical observation and you're right, it does have some resonance for today. So I mentioned the new statutory authority that the President's levied these tariffs. After 150 days, he might have to ask Congress to re up those tariffs. Does Congress want to vote for higher tariffs in the summer before midterm elections when Republicans are already divided over trade policy? I don't think so. So it really leads into the affordability agenda and prices. And so I think tariffs could be toxic come this fall.

[Interviewer]

What should China do? There's a lot of the press today about how China responds. I guess the President's going to, maybe Doug Irwin is going to carry the President's luggage to do that.

[Host]

Could do that.

[Interviewer]

I can see it. He could stay in, in Hong Kong and Shanghai rather at the Peace Hotel where Henry Kissinger stayed.

[Douglas Irwin]

Yep.

[Interviewer]

I mean he could do that. Professor Irwin, if you were to go to China with the President, how do you discuss this with Beijing and how do they respond?

[Douglas Irwin]

Well, I think what Beijing is looking for is stability in the bilateral relationship and that's exactly what we don't have at the moment. Now we do have special tariffs on China under a different provision of trade law and those can be subject to negotiation. But we're sort of in this uneasy truce with Beijing about they're not going to restrict rare earths and we're not going to impose further tariffs. How we move out of that remains to be seen and it really depends on what the administration has in mind. And then Beijing, I think, is holding its cards close to its chest and probably won't do much until it sees what the administration wants.

[Host]

Professor, one of the, I guess the results of the Supreme Court decision last week is maybe some companies, some individuals may want to get some rebates of the tariffs that they've incurred. And just today FedEx sues the United States to get full refund of emergency tariffs after Supreme Court ruling. Do we have any idea how that process would work?

[Douglas Irwin]

We have no idea at the moment. So the administration has promised that there will be rebates, but they could be slow walked. And that's why I think we'll see lawsuits to try to accelerate the process. It could take months or even years. Doesn't necessarily have to take that long. But it's clear the administration is reluctant to give up that revenue. And no process has been identified, at least as far as I know about what the process will be to adjudicate all those claims for the revenue that is amounting to tens of billions of dollars to going back to American businesses that imported foreign goods.

[Interviewer]

Come on. Blanche Flower is going to say Dugger and David Blanche Flower up at Dartmouth just print more debt. I mean, do we need that revenue? I mean I haven't seen a clear case that we must, must, must have the revenue. The first of your three hours.

[Douglas Irwin]

Well, you're right that the Trump administration has used all three of those hours and revenue has been an important one. And they certainly made the case for the tariffs on the revenue grounds. But they're legally obligated, I think to turn it back. But the question is it's not a matter of government have the money, but can they go back through the records and isolate those who those firms that actually paid the tariffs in the first place.

[Interviewer]

The continuum of year. Against the tide, folks, I can't emphasize enough. It was like Daniel Jurgens apprise. Even if you didn't read it, you walked around with it because it was cool. You had to be cool. So you dug Irwin's against the Tides. The absolute foundation of your book is Robert Solow Technology. Technology comes to the rescue is America expands. And that do you just assume our international trade tensions, Doug Irwin will get fixed by further technology leadership in America?

[Douglas Irwin]

I think the two are interrelated. I think that the US leadership in technology and other matters gets disrupted with all these trade frictions across countries and the tariffs that are going up and down and can change on a whim. So, you know, trade disrupts that process of spreading technology around the world. It inhibits our ability to export to other countries because there's implicit retaliation against the US and it disrupts all the business relationships that are needed to provide the funds for more R and D. So it's not good for our technological development. But at the same time, technology does march to its own drummer to some extent and will continue to move forward regardless of what is happening on the trade front.

[Host]

Professor, is it reasonable to assume that this Supreme Court decision may embolden Congress to try to reassert some of its authority over tariff policy?

[Douglas Irwin]

Well, it certainly was a wake up call and some of the justices really did call out Congress, not so many words saying you have to step up. It's really your responsibility under the Constitution to adjudicate and oversee trade policy. The question is whether they'll do it under this administration. I think Congress would act with great trepidation in trying to pull back some of the powers it's delegated to the president. But I think there is a medium term agenda for future Congresses and future administrations to try to rethink US Trade law and ensure that we don't go through the mess and the muddle that we've gone through over the past year.

[Host]

Professor, the concept of free trade, is that still relevant in today's global economy?

[Douglas Irwin]

I think it always remains relevant to some extent. Now, free trade doesn't mean absolutely no barriers and no interventions whatsoever. But I think we do have to distinguish and former Vice President Mike Pence has sort of made this clear, that between, you know, what he's called for is free trade with free nations. And we have to think about trade as part of our alliance system as a way of working with allies and then separating out those countries that are adversaries and we don't want to treat them the same in terms of our trade policy because that's an extension of our foreign policy.

[Interviewer]

That's a really good point here. We're going to have to leave here in a bit, Professor Irwin, but off of your wonderful article essay, I should say in the Economist here in the last couple of days, can you explain why we're going after Canada and not China? I mean, I know that I still call him Governor Carney from the bank of England. Mark. Mark Carney, good morning and everyone up in Ottawa, Doug Irwin. Why are we going after Canada when we have true adversaries that we're trading with?

[Douglas Irwin]

That's a great question. Unfortunately, I'm giving a talk in Canada in about two weeks, so I'm going to have to think this through for our Canadian friends up there.

[Interviewer]

Be careful, you may lose your teeth.

[Douglas Irwin]

That's right, yes, high sticking. I have to talk to the Dartmouth hockey team about how they prevent such things from happening. But you know, I don't know whether it's a personal relationship that Donald Trump didn't forge with Justin Trudeau, whether there's some real estate deals that went bad in the past, whether some other aggrieved parties within the administration speaking to the president ill of Canada. But I agree with you in some sense. It just doesn't make sense that here we've had peaceful, cooperative relations with this great neighbor to the north of us for so many decades, and yet we're jeopardizing that with these trade wars.

[Interviewer]

One final question. I mentioned Davenport, Iowa, the 1st district of Iowa, where the congresswoman is fighting for her life. What is your counsel to Republican House of Representative types on the precipice of losing their seats? What should they do on trade?

[Douglas Irwin]

Well, I think they really have to speak their constituents about how in certain ways, they differ from the president. Once again, in the Midwest farm states, they've been hammered with foreign retaliation against our agricultural exports. So American farmers are really suffering. And so 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 to other countries, and we're just not seeing it under this administration.

[Interviewer]

Where in God's name is the update to against the Tide?

[Host]

Yeah, exactly.

[Interviewer]

Are you slacking off, Doug, or when do we get the next three chapters of against the Tide?

[Douglas Irwin]

I'm not sure, but I've got another book called Free Trade Under Fire. If there's any time free trade has been under fire, that one's due for. For revision.

[Interviewer]

Very good. Douglas Irwin. Thank you so much. Just wonderful. Generous of your time this morning. He is at Dartmouth.

[Announcer]

These days, it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent, secure any agent. Okta secures AI.