MORNING GLORY: Are President Trump’s tariffs actually working?

A new assessment published Friday from the Congressional Budget Office is surprising even stunning The CBO is not thought to be a friend of Republican presidents and Congresses Questions invariably arise from supply-siders about whether CBO rejects serious dynamic scoring of developments in the law and in major regulatory actions Whatever the agency s methodology it issued a analysis on the Trump tariffs at the close of last week We project that increases in tariffs implemented during the period from January to August will decrease primary deficits which exclude net outlays for interest by trillion if the higher tariffs persist for the period Phillip Swagel CBO s director wrote By reducing the need for federal borrowing those tariff collections will also reduce federal outlays for interest by an additional trillion As a end the changes in tariffs will reduce total deficits by trillion altogether The account is here TRUMP'S TARIFF REVENUE HAS SKYROCKETED IN JUST A SPARSE MONTHS SOARING PAST LEVELSFree traders should be scratching their heads as they review all the statistics including that in this CBO Update Inflation has not spiked Upsurge has not plummeted The revenue from tariffs is enormous An international contract war has not broken out One of these things just doesn t belong here one of these things just isn t the same goes the old Sesame Street song s refrain So maybe just maybe we free marketeers ought to consider that perhaps just perhaps President Trump has been right about tariffs America s strength relative to that of our trading partners and the impact of non-tariff barriers-to-trade I checked in with an old friend and free-market economist Dr Richard McKenzie Gerken Professor of Economics Emeritus at the University of California Irvine s The Paul Merage School of Business He is following the evidence but is unconvinced For the moment however he does agree that Trump could make world business freer by his threats On your broader question about general acceptance of tariffs Professor McKenzie replied to my query on whether free area economists might blink at the CBO s numbers No tariffs and minimum wages have long been used as a litmus test for territory economists but their commitment has perpetually been conditioned on the strategy President Trump has employed The threat of the imposition of tariffs can be used to lower the tariffs of other McKenzie continued But the argument I think Trump has used that somehow my tariffs will offset your tariffs to make a level playing field doesn't play broadly at least not in Friedman types they compound the damage done The tariffs McKenzie continued if they end up being consequential will diminish domestic and world incomes from what they would otherwise be further reducing IRS revenues from what they would be Then Professor McKenzie pulled out the Thor s Hammer of Friedman types A tariff is a tax is a tax is a tax The CBO s estimates of trillions in additional federal revenues and reductions in budget deficits are testimony to that fact of accounting President Trump seems to believe that he can wear the mantle of a tax cutter while raising tax revenues on the sly His threats to impose heavy tariffs on countries that don t lower their tariffs on U S goods is also testimony that he understands the damage that can be done by tariffs Such threats could work to promote freer world pact Canada just lowered tariffs in response to Trump s threat but don t count on that to be the scenario across the board after the initiative dust settles No doubt President Trump s senior advisor on arrangement and manufacturing Peter Navarro would differ Navarro and McKenzie were colleagues for decades on the same graduate school faculty at UCI I have no idea when they last spoke presumably before but Navarro has consistently been a man of the political left and McKenzie of the political and economics right Navarro has embraced tariffs at least against China since his book Death By China Their very different views are part of a long-running debate among economists and those whose views about tariffs are informed by economists I ve reflexively been against tariffs since first absorbing the long-standing conventional wisdom about the Hawley-Smoot tariffs something I first was taught over years ago in Economics and then subsequently inhaling free markets free minds arguments from the era of President Reagan forward If you search the terms CBO and tariffs and limit your time frame to the past week you will find a Reuters story about the overview as well as stories in Axios the Financial Times the Washington Examiner and Fox News Perhaps coverage will increase this week along with explainers from both left and right specific of which will note that the CBO update is preliminary to a forthcoming account on the entire economic picture What strikes me as odd is that the Update About CBO's Projections of the Budgetary Effects of Tariffs is very much a man-bites-dog story but wasn t treated that way after President Trump underscored the news in his Friday Oval Office press availability The big question is whether free domain folk will reconsider their rejection of the president s contract policies Doubtful that I am still very leery of any president s authority to even impose such sweeping edicts outside of clear national safeguard arenas such as China This question of the limits of executive authority is presented in a incident before the Federal Circuit Court of Appeals now underway This debate over presidential power is almost certainly headed to the Supreme Court as the Constitution explicitly grants tariff authority to Congress and the Congressional delegation of that authority to the president in the International Urgency Economics Powers Act IEEPA is broad but is it broad enough to endorsement President Trump s vast impositions and frequent resets CLICK HERE FOR MORE FOX NEWS OPINIONIt s a incident of first impression If the IEEPA does indeed grant the power it may be enough to resurrect the non-delegation doctrine abandoned by the Supreme Court years ago and trigger the Court s rejection of all or particular of the Trump tariffs I don t know the answer to that question and neither does anyone else A single federal district court judge mentioned the president does not have the power to do what he did and that ruling s effect was stayed That s all we know These days a ruling from a single federal district court on the actions of President Trump is the nearly the thinnest of reeds on which to rely The federal district courts have had more reversals in the last six months than the Cleveland Browns since their return to the Lake in Numbers are numbers however and trillion in deficit reduction means trillion less in national debt For the debt hawks out there who are also free traders the CBO Update deserves your attention regardless of whether legacy media notes it Hugh Hewitt is host of The Hugh Hewitt Show heard weekday mornings am to am ET on the Salem Radio Architecture and simulcast on Salem News Channel Hugh wakes up America on over affiliates nationwide and on all the streaming platforms where SNC can be seen He is a frequent guest on the Fox News Channel s news roundtable hosted by Bret Baier weekdays at pm ET A son of Ohio and a graduate of Harvard College and the University of Michigan Law School Hewitt has been a Professor of Law at Chapman University s Fowler School of Law since where he teaches Constitutional Law Hewitt launched his eponymous radio show from Los Angeles in Hewitt has frequently appeared on every major national news television framework hosted television shows for PBS and MSNBC written for every major American paper has authored a dozen books and moderated a figure of Republican candidate debates largest part just now the November Republican presidential debate in Miami and four Republican presidential debates in the - cycle Hewitt focuses his radio show and his column on the Constitution national assurance American politics and the Cleveland Browns and Guardians Hewitt has interviewed tens of thousands of guests from Democrats Hillary Clinton and John Kerry to Republican Presidents George W Bush and Donald Trump over his years in broadcast and this column previews the lead story that will drive his radio TV show in current times CLICK HERE TO READ MORE FROM HUGH HEWITTvvv