Podcast Summary: Newt’s World – Episode 960: Michael Faulkender on Trump’s Tariffs

Host: Newt Gingrich
Guest: Michael Faulkender, Co-Chair at America First Policy Institute; former Deputy Secretary of the Treasury
Date: March 28, 2026

Episode Overview

This episode centers on the recent Supreme Court ruling that restricted President Trump’s ability to impose tariffs under the International Emergency Economic Powers Act (IEEPA), the broader ramifications of tariff policy, and its intersection with U.S. economic strategy. Newt and Dr. Faulkender delve into the legal, economic, and political implications of the ruling, discuss the potential refund of billions in collected tariffs, and explore pathways for U.S. trade and prosperity. The conversation then shifts to challenges in U.S. housing affordability and wraps with a look at the America First Policy Institute’s economic vision.

Key Discussion Points & Insights

1. Supreme Court Ruling on Trump’s Tariffs

[11:31-17:14]

• Background: On Feb 20, 2026, the Supreme Court (6–3) ruled that President Trump cannot use IEEPA to impose tariffs.
• Significance: The ruling limits presidential flexibility in setting tariffs, particularly during emergencies.
• Three Purposes of Tariffs (Faulkender):
  1. Incentivize domestic manufacturing for economic and national security.
  2. Generate government revenue.
  3. Create leverage for international negotiations.

“The Supreme Court decision does not take away the President’s ability to use tariffs... It just creates more steps, more bureaucracy in order to utilize tariffs to achieve those important goals.”
— Michael Faulkender [12:37]

• Other Legal Authorities: While IEEPA is restricted, Section 301 and 232 of other acts still allow presidential tariff actions, but with more process.

2. Impact on Small Businesses and Consumers

[13:06-16:18]

• Plaintiffs: Cases were brought by a toy company and a wine importer, both claiming tariffs would harm business.
• Trade Realities: Cost increase could be absorbed by importers, passed to retailers, or ultimately end up with consumers, exacerbating affordability crises for the middle class.
• Rationale for Tariffs: U.S. uses tariffs to counter foreign manipulations—subsidies, barriers, forced technology transfers (especially from China).

“Countries like China are willing to use their provision of these goods in order to extract geopolitical concessions. So they’re willing to engage to some extent in economic warfare through these subsidies and barriers.”
— Michael Faulkender [15:28]

3. Constitutional Authority and Limits

[16:18-18:36]

• Constitutional Reference: The Court cited Article I, Section 8, that tariff power lies with Congress.
• Delegation Nuance: While some powers are delegated to the President, the IEEPA does not override Congressional authority to that extent.

“The court did not say that the President has no authority on tariffs. What the court said is that the authority is not so broad as he was asserting under IEEPA.”
— Michael Faulkender [18:03]

4. Potential Refund of Collected Tariffs

[21:21-26:47]

• Historical Precedent: United States v. U.S. Shoe Corp. (1998) led to refunds of illegal tax collections.
• Current Stakes: Estimates range from $160–175 billion in tariffs collected under now-invalidated authority.
• Technical Feasibility: Treasury has infrastructure to process large-scale payments, though this would notably increase the federal deficit.

“Treasury processes nearly $7 trillion a year in payments. So adding another 175 billion...is just going to increase the deficit...and bring us that much closer to when we face some kind of fiscal consequence.”
— Michael Faulkender [24:03]

• Logistical Advances: Modern electronic payments (ACH, EBT) expedite the process, reducing historic bottlenecks with check refunds.

5. Presidential Workarounds and Trade Policy Outlook

[26:47-30:36]

• Policy Pivot: Trump quickly invoked the 1974 Trade Act, imposing a 10% and then 15% tariff for 150 days, pending detailed investigations.
• International Agreements: Executive agreements can substitute for full treaties but lack permanence unless Congress acts.
• Endurance of Policy: Executive action persists only as long as the issuing president remains in office.

“Presidents of both parties have moved towards things like executive agreements...but that means they only endure as long as that chief executive is in office.”
— Michael Faulkender [29:05]

• Is the ruling a turning point or just a bump?

“To me, it’s entirely a bump in the road...the President is going to find authorities in order to implement his view...don’t focus on the process, focus on the President’s trade agenda.”
— Michael Faulkender [29:48]

6. Housing Affordability Crisis

[32:55-37:55]

• Main Drivers: Doubling of median monthly mortgage payment since 2021, mainly due to higher rates and elevated home prices.
• Policy Fixes:
  • Lower ten-year Treasury yields to lower mortgage rates.
  • Address budget deficits to inspire bond market confidence.
  • Reduce regulatory and permitting costs (especially in blue states).
  • Expand apprenticeship and vocational training in skilled trades.
  • Encourage housing supply growth.

“For a $400,000 house, about $94,000 is regulatory and permitting costs, which is just crazy.”
— Michael Faulkender [37:55]

7. America First Policy Institute’s Economic Agenda

[38:03-42:38]

• Origins: Founded in 2021 to codify and expand policies from Trump’s first term.
• Key Pillars (the “Affordable Abundance” approach):
  1. American energy dominance.
  2. Deregulation and state empowerment.
  3. Reduce government scale and spending.
  4. Pro-growth tax policy.
  5. Sound money and finance.
  6. Reciprocal, fair global trade.
  7. A healthier, more transparent U.S. healthcare system.
• Core Principle: U.S. economic policy should benefit Americans and reduce the power of unelected global bodies.

8. Legislative Dysfunction & Policy Permanence

[42:38-44:26]

• Senate Dysfunction: Presidential policies increasingly rely on executive action due to Senate gridlock.
• Problem with This Approach: Lack of permanence—policies can be rolled back by successor presidents.
• Desirable Outcome: Legislative action is needed for stable, long-term economic reforms, particularly on trade with China.

“Permanence can only arise if the Senate is actually functional and passes legislation.”
— Michael Faulkender [44:08]

Notable Quotes & Timestamps

• “Tariffs serve three purposes...to create a better incentive environment for manufacturing...generate revenue...generate leverage for negotiations over geopolitical issues.”
  – Michael Faulkender [11:53]

• “There’s an enormous desire not to pass those [tariff costs] on and exacerbate it. So to the extent that domestic retailers bear it, that can be problematic in the short run.”
  – Michael Faulkender [13:41]

• “The Senate is entirely dysfunctional...Presidents have moved towards executive agreements...they only endure as long as that chief executive is in office.”
  – Michael Faulkender [29:05]

• “For a $400,000 house, about $94,000 of it is regulatory and permitting costs.”
  – Michael Faulkender [37:55]

• “Unleashing American energy is an important pillar of the America first strategy...Energy costs permeate the entire economy.”
  – Michael Faulkender [39:49]

• “Permanence can only arise if the Senate is actually functional and passes legislation.”
  – Michael Faulkender [44:08]

Key Segment Timestamps

• [03:10–08:23]: Newt Gingrich’s opening space/tech segment
• [10:59–18:36]: Intro and Supreme Court tariff ruling discussion
• [21:21–26:47]: Potential for tariff refunds and fiscal implications
• [26:47–30:36]: Trump’s pivot to 1974 Trade Act; executive agreements
• [32:55–37:55]: U.S. housing affordability crisis and solutions
• [38:03–42:38]: AFPI’s economic vision – “Affordable Abundance”
• [42:38–44:26]: Legislative dysfunction, permanence of policy
• [47:31–50:06]: Listener Q&A on balanced budgets and national debt (Robert, PA)

Memorable Moments

• The staggering figure that Treasury processes $7 trillion annually in payments, making even a $175 billion refund mechanically feasible though fiscally perilous. [24:03]
• The specific breakdown of regulatory costs on a median new house, highlighting overregulation’s impact on affordability. [37:55]
• The assertion that the Supreme Court ruling on tariff authority is little more than an administrative hurdle for a determined president. [29:48]
• Emphasis on America First Policy Institute’s seven-point plan for restoring “affordable abundance” in the economy. [38:44–42:38]

Tone and Style

The conversation is deeply analytical but accessible, blending technical explanation with political context and policy prescription. While the focus is on the hard realities of trade, governance, and affordability, the tone remains optimistic about American innovation and reform movements, and pointed in critique of regulatory and legislative failures.

This summary was prepared to capture the richness and nuance of Newt’s World, Episode 960, providing listeners with a comprehensive, timestamped reference to the episode’s key discussions and takeaways.