Sam Stein (2:47)

Which so the, the rule, essentially the ruling wasn't going to take effect for 10 days and now it's not going to take effect for however long it takes to adjudicate this. Let's step back for a second. What Just explain this to me like I'm a child, which is usually how you talk to me. U.S. court of International Trade what did they actually find was illegal about Trump's tariffs?

Greta Peisch (3:08)

So the authority was that was used is one that has never been used for tariffs. But before the International Emergency Economic Powers act, this is the statute that we usually use to sanction bad guys in countries. So Iran, traffickers, you know, etc, Russia, this is, that's, that's what we usually use this for. It is used in other contexts, but that's the normal use case. So it hasn't been used to, to impose tariffs. It, it and the administration use the term regulate imports, which is in the statute, to say, well, that includes regulation, includes lots of things including tariffs. And so that's, that was the hook that they used for both the worldwide tariffs. So Liberation Day tariffs, which was currently 10 on almost everyone, as well as the tariffs on Canada, Mexico and China related to fentanyl and immigration. So those are the two sets and all of these sets were similar considered by the court, all found to be inconsistent with the statute. The court didn't really say never, no way ever can tariffs be used. They said for the worldwide tariffs, the statute does not allow this use for unbounded sort of unlimited tariffs across the whole world. It's just that Congress just did not delegate that power through this statute to the President. And for fentanyl and immigration related tariffs, they said, you know, these tariffs, they don't really deal with that emergency. Right. They're used, they're sort of, the argument was that they're being used to leverage and to induce Canada, Mexico and China to do more on that. But they're not really directly getting at that issue. Right. There's sort of a secondary effect. In other words, putting tariffs on, you know, underwear from China doesn't really directly address this fentanyl crisis. Right?

Sam Stein (5:05)

It doesn't.

Greta Peisch (5:07)

Oh well, that's what the court.

Sam Stein (5:09)

Okay. I just want to be clear. It's how I get my fentanyl wrapped in underwear from China. I found this whole thing interesting because the idea is there's an emergency right? Or that's what the Trump people are saying, well, there's an emergency, so we have this emergency power. Let's use this emergency. Essentially the court said, you have yet to convince us that there's an emergency. Right.

Greta Peisch (5:28)

They didn't quite say that. They didn't. And I think that was smart of the courts. The courts don't like to get into telling a president what an is and is not an emergency. Right. You know, that is something that courts like the type of question courts like to leave with the executive branch. They don't want to get in the business of saying, well, this is an emergency. This is not, this is the national interest. This is not right. The emergencies are still declared. Actually a technical matter. It's just saying flowing from that emergency, you can't use this power in this way. And that was what the court found.

Sam Stein (6:01)

But now, now Liberation Day is technically back on. Although we've kind of, we definitely paused it. There's a 90 day pause, although maybe not for China, although China is paused and the EU was supposed to go up to 50%, but now that's paused and it's really tough to keep track of all this. Now, I know you're, you're on the law side of this, but you do have some insight into the negotiation side of these things. I want to just kind of focus on 90 deals in 90 days, because that's essentially where we were when Liberation day was paused. 90 is 90 days. We really haven't seen any deals. And for the people who don't know this stuff, who haven't been in the room, like, what's the normal process for negotiating a trade deal? How long does it normally take? What do we, what is the haggling? Like, you know, what, what do you have to get through in order to get a deal in place where you're like, yes, we're done, we signed the. Sign the paper, it is done, we have a deal.

Greta Peisch (6:55)

Well, it kind of depends on what your scope is that you're negotiating. Right.

Sam Stein (6:59)

Like how you're so lawyerly. Just give me an answer.

Greta Peisch (7:01)

Geez, that's not how this works. It's not how I work. So let me just say I'll answer the question but one, it depends.

Sam Stein (7:10)

You'll answer the question. But let me have a preamble of about five minutes. That goes through case law first.

Greta Peisch (7:16)

Yeah, no, you know, the administration has said that they're, you know, it's sort of one, it depends. But, but the administration has been pretty ambitious in what they said that they wanted to Do. They've talked about tariffs, they've talked about non tariff barriers, they've talked about laws and regulations of other countries that are difficult to change and difficult to agree to get other countries to change. So even, even if it's a slimmed down trade negotiation, something like what we think the administration wants to accomplish would, would take months, if not a year usually. We did have an announcement on a US UK sort of framework which was not a final agreement. It was a bit more aspirational what they want to address. And you could see things like that coming out of, you know, here's what we've agreed we want to accomplish. And then maybe you know, sort of rewinding back before these court cases came out, maybe sort of further pauses while they hammer at detail. It's sort of extending those pauses that were in place out that sort of felt like the direction that that was heading, that we would get some number of announcements that hey, we kind of have agreement ish on what we want to do and we'll, we'll kick out that deadline while we kind of hammer out the details and, and that sort of felt like where it could be heading.

Sam Stein (8:38)

What. Well then let me ask you a last question then because it already was incredibly hard to follow. Uncertain and dicey. And now you inject this legal uncertainty into the mix. Now I know everything's paused, but it's only paused. It's not 100% clear that the courts will ultimately say, yeah, you have the authority to put in place these tariffs. So now we have to wait and let this get adjudicated through the legal system. In what ways will this complicate all the, I assume, negotiations that are happening behind the scenes to get these 90 deals and 90 days knowing fully well that we're 45, 40 halfway through?

Greta Peisch (9:21)

Well, I think what the administration will likely do is try to continue to create leverage somehow. Right. So they're, you know, one, they'll say we're going to win the cases, I would expect. And then two, I think they'll say look, even if we don't win these cases, cases, and you've heard administration officials say this today, we have other options. There are other tariff authorities. They might not be as fast or flexible or as desirable as AIPA in many ways, but we can still use those authorities to, to achieve the same objectives. And you know, you trading partner, you should keep talking to us because you know, that is what could happen to you if, if we, if we don't come to an agreement.

Sam Stein (10:07)

Yeah, but that just seems less Forceful, honestly, then we're gonna whip you with like this 50%, 145% tariff unless you come to the table. And, you know, now it's like, well, you know, we might have some other authority. And, you know, the courts may, well.

Greta Peisch (10:20)

I think they can get kind of concrete about it if they want to. And there, there are tariffs in place now. I mean, the UK it, it actually didn't achieve, it appears, a reduction in the reciprocal Liberation Day tariff that applied to them, which was 10%. They achieved concessions, it appears, on sectoral tariffs under section 232, which is a totally this is the steel, aluminum, autos. There's other investigations into pharmaceuticals and a set of other products. And that's what the UK Got. They got a hundred thousand Rolls Royce. And that was not reciprocal tariffs. That was the other sectoral tariffs under another authority which were not touched by the reliance yesterday.

Sam Stein (11:01)

Now, we were celebrating in the Stein household because of our impending Rolls Royce purchase. It was good, good news for us. All right, Greta, is there any last thoughts? What, what, what do you think? I don't, I know you're not going to, I know you're going to sort of punt on making a prediction. But let's say three months from now, what are we looking at in terms of a tariff regime from the administration?

Greta Peisch (11:23)

I think that they will find, you know, I think the courts are hard to predict. But putting that aside, I think one way or another, you know, the administration is going to have a plan B and C to achieve the tariff objectives that the president has. He is, this is obviously a priority for him. He's determined to pursue it on in terms of both, you know, creating the leverage for negotiations and also having some tariffs in place, you know, maybe permanently or in the long term. So I think they're going to find a way to do that, and they'll probably use this time while the tariffs are in place, while the courts consider to kind of figure out what that Plan B is.

Sam Stein (12:03)

All right, Greta Peisch, thank you for doing this. I know, I know you didn't want to do this. I know you desperately were trying to avoid doing this, and it was only me browbeating you over text relentlessly that got you here. But I hope it wasn't too painful.

Greta Peisch (12:20)

Well, that's all true. And it was not too painful.

Sam Stein (12:23)

Okay, good. I can't wait to blast this out to our friends Text list. Greta Paisch, thank you so much for doing this. Thank you guys for watching.