Attack of the Zombie Tariffs

A brain is a terrible thing to have eaten

Trump administration officials are trying to put a brave face on the stinging rebuke just delivered by the Supreme Court in its ruling that most of the tariffs imposed since April 2025 (the IEEPA tariffs) are illegal. Never one to accept limitations on his power, Trump rushed to impose new tariffs using an obscure clause, Section 122 of the 1974 Trade Act. Section 122 tariffs have a 150-day limit, at which point they expire. So Trump officials are now claiming that they’ll find ways to reconstruct the tariffs using other legal loopholes before the expiration date is reached.

I don’t know how well this strategy will actually work. To the extent that it does work, we will be in the grip of zombie tariffs — tariffs that should be dead, because they were clearly imposed illegally, but that somehow keep shambling along.

Why this desperate attempt to keep tariffs high? A MAGA loyalist would say it’s to preserve what those illegal tariffs have accomplished. But even before they were struck down, the tariffs had achieved none of their stated goals. In fact, they had put those goals further out of reach.

On Liberation Day, Trump justified the tariffs now ruled illegal by telling the American public that our trade deficits were proof that the United States was giving money away to other countries. In his ranting press conference after the Supreme Court decision, he justified his actions by saying,

You take a look at the deficits that we had with some of these countries. It was disgraceful what they got away with for many, many decades.

He has the economics of trade deficits fundamentally wrong. But even aside from that, tariffs aren’t reducing those deficits. In fact, the U.S. trade deficit for all of 2025 was about the same as it was in 2024.

Trump apparently believes otherwise. In a recent Truth Social post he declared,

THE UNITED STATES TRADE DEFICIT HAS BEEN REDUCED BY 78% BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES

What was he talking about? Probably this:

The U.S. trade deficit surged in early 2025, as companies raced to bring in imports before the Trump tariffs went into effect. It then plunged briefly as companies drew down their swollen inventories before importing more. In the end, the 2025 trade deficit was about the same as the 2024 trade deficit. So what Trump cited was a cherry-picked, misleading number that bears no relation to reality.

Trump also claimed that his tariffs would revive American manufacturing. In fact, manufacturing employment has declined since Liberation Day. But in that press conference Trump asserted that great things are coming:

You’re going to start to see the results in a year from now when all those factories start that are under construction right now. You see all the construction numbers are so good.

Which numbers does he have in mind? The most recent available data on manufacturing construction show it falling thanks to Trump’s cancellation of Biden’s green energy subsidies:

Finy, Trump likes to boast about the immense revenue generated by the tariffs. And they did indeed bring in some money — tariffs are taxes, and taxes yield revenue. But they aren’t the gusher of revenue that Trump claims. The most recent Congressional Budget Office report on the fiscal outlook, released before the ruling against IEEPA tariffs, showed revenue from customs duties rising from 0.3 percent of GDP pre-Trump 47 to 1.3 percent in 2026 and after. That’s a net rise of about 1 percent of GDP. That’s not trivial, but it’s not huge either. Here’s tariff revenue in context:

Revenue from the Trump tariffs, even pre-Court, wasn’t enough to make a large dent in the deficit. Moreover, it wouldn’t even pay for the increase in the deficit caused by the passage of Trump’s One Big Beautiful Bill tax cuts. Nor would it be enough to cover Trump’s call for a 50 percent increase in military spending — a rise so large that the White House hasn’t yet submitted a budget, two weeks past the statutory deadline, because the Pentagon hasn’t been able to figure out how to spend that much.

So how, exactly, are the tariffs supposed to simultaneously reduce the deficit and pay for Trump checks?

In reality, by the time of the Supreme Court ruling, Trump’s assertion that tariffs are a magic elixir that solves all problems wasn’t convincing anyone. Independent voters disapproved of his tariff policy by a three-to-one margin. Accordingly, when the Court’s decision came down, some Democrats immediately worried that the ruling would help Trump politically, giving him an escape route from an unpopular and ineffectual policy. Here’s how G. Elliott Morris put it:

As I see it, the Court, by striking down Trump’s tariffs, permitted him to defiantly retreat from one of his most unpopular policies; he could have simply blamed the judiciary and moved on.

Yet he didn’t. Why?

It has been clear from the beginning that a primary motivation for tariffs was that they empowered Trump personally. They allowed him to punish governments he didn’t like, demand subservience from other countries as the price of lower tariffs, and offer waivers and exemptions to companies that put money in his own pocket. And maybe Trump can’t bear the thought of losing that power.

Yet he already has. The language of Section 122 calls for a flat-rate tariff on everyone. This means that nations Trump tried to punish — like Brazil, which faced high tariffs for daring to try Jair Bolsonaro for treason — have just received a big break. Meanwhile nations that groveled to Trump, like the UK, have just learned that they humiliated themselves for nothing:

Source

In other words, Trump will have lost a lot of power even if he manages to avoid a big reduction in average tariff rates. So why persist?

The obvious answer is that Trump can’t bring himself to acknowledge defeat. His tariff strategy is, by any reasonable standard, dead, and the tariffs should be dead too. But they won’t stay dead; they just keep shambling along.

MUSICAL CODA

Obviously: