Courts again reject Trump's latest tariffs as illegal. Trump frustrated

Added: 2026-05-10

[00:00:09]Welcome to Conversations. I am Mkhtad Khan, your host. And today I'm going to talk about another judicial blow on Donald Trump's foreign policy agenda.

[00:00:18]uh the federal courts have deemed that this additional 10% uh tariffs that Donald Trump has imposed after the Supreme Court had deemed his earlier reciprocal tariffs as unconstitutional has now also been struck down by federal courts as illegal. So Donald Trump is now getting completely frustrated with American courts when it comes to his foreign policy agenda. uh the entire 2025 Donald Trump's whole obsession was before he went on to this Iran obsession, his foreign policy was all about tariffs. Tariffs was his favorite word and he was going to use the tariffs not only to make America rich and prosperous and dominant again. I mean the instrument for making America great again was going to be his foreign policy. It was his tariffs. uh and so there was I cannot uh recount to you if you all recall what a big hulaoo it was uh his whole entire tariffs imposing tariffs on India. India and Brazil were the two countries which were hit the hardest with about 50% tariffs. There was also that phase where he went toe-to-toe with China and for for a few days the tariffs on India on China had reached 145%.

[00:01:38]before they eventually came down to about 34%. Uh so now you must understand very clearly that the US constitution puts tariffs and inter in interest in inter between states and between countries international trade and domestic trade across trade borders is firmly in the camp of the congress. So any rules that have to be made about trade uh with specifically with regards to customs and tariffs is the domain of the congress.

[00:02:14]Now what the Congress could do is authorize the president to use tariffs for any specific purpose like the EA was an authorization from the Congress uh to the president uh in moments of economic emergencies to use tariffs uh to deal with very specific economic emergencies like imposing sanctions etc. But Donald Trump just see the problem with Donald Trump is he does not have respect for any law. He does not respect international law. He does not respect uh the US Constitution either. And so he wants to do what he wants to do and he just can't handle anybody blocking it. And uh fortunately for him, we have uh a an inethical, gutless, spineless, moralityless uh shameless uh Congress at the moment, especially the Republican party, which has completely abdicated its constitutional responsibilities of checks and balances. the in the United States uh political system uh the congress is a check uh on the president as well as the judiciary and the judiciary is a check on the other two systems. So fortunately today America it's like an America is a three engine jet and for the last few years it has been operating only on two jets which is the judiciary and the executive with the congress becoming totally irrelevant.

[00:03:46]It's not just under Donald Trump even under Biden and other places the congress suddenly becomes a cheerleader for the president if it is from their party.

[00:03:57]So let me tell you exactly what has happened. A three judge bench has ruled uh in a 2-1 decision to basically say that uh Trump's tariffs, the new ones that he had imposed using a different legal justification are also illegal.

[00:04:15]Now the manner in which this judgment apparently has been issued is a bit confusing because there are only two plaintiffs and so it's not very clear whether the judgment is across the board or is it only limited to those two uh one of them is a toy importer and it's for them uh and uh the state of Washington. So it's not very clear that will become hopefully clearer. But what was also was that these tariffs that Donald Trump had imposed uh by law he could impose that only for 150 days. So they were going to end in the end of July anyway. So in in some ways this is quite an unnecessary well not unnecessary because they've been deemed illegal. The United States government will have to return all the tariffs that they have charged. But if it had expired without being challenged, then those tariffs would have remained with the US government. They would just have to find a new justification to reimpose those tariffs.

[00:05:17]So, so this is going on and uh so Donald Trump is actually quite frustrated that the courts are pushing back at him. But it's his own fault. It is his own fault.

[00:05:28]He he has both the Congress and the Senate. he can go to the Congress, make the case and get his policies approved by the Congress. Unfortunately, we are in a horrible situation in the United States. U there is hardly any bipartisanship. There's so much of hatred and enmity between the two political parties and the two political factions in the country that even if Donald Trump's policies were good, I don't think they are good. uh uh they don't make sense and they will not achieve his ultimate goal which is to bring back industrialization and manufacturing to the United States. It's not going to happen. At least it's not going to bring back manufacturing jobs.

[00:06:14]What it might do is in combination with artificial intelligence and robotics uh maybe manufacturing can come back to the United States but not manufacturing jobs. Uh however uh this is what has happened. So Donald Trump started his entire year by trying to impose tariffs all across the board on all countries and he signed huge agreements. We'll talk about those agreements because those agreements are not affected by the judicial rulings. Uh so he he he the tariffs were generally anywhere between minimum 10% for UK then 15% for Europe and others who promised to invest. So he sold discounts for investment. So for example uh he would impose 20% tariffs and then the country will say okay I'm going to invest $50 billion in your uh economy like Indonesia and then it brings it down to 19% and so on and so forth. So the Europeans promised to invest close to 700 600 billion dollars in the US and buy some 750 billion worth of extra stuff from the US over the period of time and as a result of that he brought down the tariffs from 25 to 15% across the board for Europe. So he did all of this and then come February it goes to the US Supreme Court 63 ruling saying this is unconstitutionally illegal. You cannot collect this. And you know what?

[00:07:40]They have made him pay back those tariffs. So, Donald Trump collected $166 billion in tariffs. And last week, the website has gone up and he has started returning the tariffs to them to those American companies which had paid tariffs. So, he kept talking about if you remember trillions of dollars in tariffs. Well, that were not trillions of dollars, but it was 166 billion which he had already collected before the Supreme Court said no, you can't do that.

[00:08:14]Now, he was using a law called EA, International Emergency Economic Emergency Act or something. So, according to that, he could have done that if he could make the case that there's an economic emergency in the country and the court said, "No, you don't have this. you are trying to use usurp constitutional powers from the Congress using this excuse it does not make sense and so they cut it off and then he used another law a law that says that if there is a balance of payments deficit this is a very specific law I'll explain to you what the balance of payments deficit is in a moment but the law says that if there is a balance of payment deficit then the president can use tariffs uh in order to offset that. Uh and so Donald Trump then used that law and and basically he went to the and applied 10% across the board to compensate for what he had lost in the Supreme Court. And then two companies, one of them is a toy company. In fact, I bought a lot of toys from them for my kids. Tonka trucks for example, they import and and Legos. I think they import Legos and stuff from Europe and they have been uh they went to court with another company. Uh and they won the case and the the the court the federal court basically this is what it said. It said now because it's a federal court Donald Trump can appeal this and he can go on and keep the tariffs in place. Uh but he's going to lose it anyway. Let me tell you very clearly this is a simple simple logic. He does not have the constitutional authority to do what he's doing that he can do that only if the Congress authorizes him to do it and that he has not gone to the Congress and once the midterms are over any chance of that happening is going to become far less likely than it is at this moment. Anyway, uh the rules in Senate of getting up to 60 votes is also not happening. So it's impossible for him to get anything passed in the Senate given the state of uh hostility between the two political parties at the moment.

[00:10:27]But nevertheless, the court said, "Look, you are faking this balance of payment." What Donald Trump's lawyers argued in the court was that because the US has persistent deficits, trade deficits, uh there are more dollars going out than dollars coming in. So balance of payment is a a net total of how much of your currency is going out and how much of your currency is coming in. This usually is a problem for developing countries like Pakistan is a very important example of the balance of payments problem. They are importing more than they are exporting especially with gas and and then they they have to make the payments in dollars and so if you don't export how do you get dollars? Dollars come to your country if you're a developer country in three ways. Through exports, you sell things abroad and you you sell them in dollars and dollars come in.

[00:11:23]Number two, remittances. People of your country who are working abroad uh they send money to their families and that's how foreign currency comes in. And the third one is investments. Uh and that is also brings in dollars. But if your imports that means the dollars that are going out are more than everything that is coming in then you have a balance of payments uh problem. So then you go and borrow from the IMF uh etc to make the payments and the borrowing is in dollars.

[00:11:54]Uh so mostly this is a problem for developing countries and it's not an issue at all for the United States because the US can simply print dollars.

[00:12:05]It can sell treasury bonds or it can print dollars. And so if it has a deficit issue, just print more dollars and send them. And the one of the reasons why the US does have this problem is because the US dollar is a dominant global currency. So if Japan is selling something to South Korea and South Korea is selling something uh to South Africa, they are do they are the transactions are in dollars and so they need dollars. South Africa which is buying something from South Korea and making the payment in dollars. It needs dollars and that's why dollars go out.

[00:12:39]Uh so the US has to supply these dollars otherwise how will that transaction take place. So in order to keep the US dominant dollars are going out anyway.

[00:12:48]But the the Trump administration went to the courts and argued that the deficit in terms of trade deficit. That means the US imports are way more than US exports. And we know the US has a huge nearly more than a trillion dollars deficit in trade. So we import far more than we export.

[00:13:08]So he's trying to use trade deficit as a substitute for deficit in balance of payments.

[00:13:17]And the court said that is stupid. That is not the case. And they simply so basically it's a technical argument that that either the Trump administration is profoundly stupid.

[00:13:33]I mean the lawyers in the department I'm not a lawyer. Okay. And the moment I read the court's judgment, I could see how stupid the case argument was from the Department of Justice.

[00:13:45]For them to be able to to go and make this case that the trade deficit is the same as the balance of payments deficit. Come on.

[00:14:00]They think the judges are stupid.

[00:14:03]See this is what happens when you win elections by getting the votes of the stupidest people in the country which is what the MAGA are. The MAGA is the stupid in every country that you have a right-wing government. Let me tell you they are the most uneducated the most stupidest and brainless people who vote for these people. So the politicians get used to making stupid arguments devoid of facts devoid of substance.

[00:14:32]Donald Trump say we are the greatest country in the world. We are the hottest country in the world and people believe that. How how can you believe that?

[00:14:39]Don't you have any sources at the moment like his all his claims about I have obliterated the nuclear capacity of Iran and the MAGA crowd believed it and then a few months later he comes and says oh no it's the biggest threat to the whole world.

[00:14:57]the nuclear program that Donald Trump claimed he had obliterated is now the biggest threat to the universe and Donald Trump the superhero is going to save the planet from Iran. See how dumb the crowd has to be to believe this.

[00:15:14]So once you have these kind of people who are used to making stupid arguments and getting accepted and getting votes and becoming presidents, they take the same stupidity to the courts and there it doesn't work.

[00:15:29]Donald Trump tried I think in 60 different courts to convince the courts that he had won the election in 2020.

[00:15:38]Even courts where his own judges they have thrown it out like the Supreme Court decision 632 of the judges who threw out his argument were the judges that he appointed to the Supreme Court.

[00:15:51]So the courts are not buying the stupid arguments that this administration is making. Now this is a big blow to Donald Trump. Effectively, it's not that much of a problem except that if it is generalized, then instead of returning the money to these two companies, he might have to return it to across the board. Again, all of that second problem that he will have. But he is going to China in 5 days. is going to be in Beijing negotiating among other things an effort to balance trade with China.

[00:16:29]And when he is in Beijing and negotiating, Donald Trump is not going to be able to use tariffs as a lever of influence over Iran. He can't he can't threaten China and saying I'm going to use tariffs to do this, do do that because the Chinese is Xi Jinping will probably laugh at him and say that is rubbish. We'll go to your courts and your courts will throw your stupid policies out.

[00:16:59]This is the biggest this is why this is a major blow against Donald Trump.

[00:17:03]First, it hurts his ego. Number two, it frustrates him because of what he wants to achieve as president. He's not able to do that. He has this goal which is okay.

[00:17:16]It doesn't make sense. But I I'll buy the goal that we need to bring back manufacturing jobs in the United States.

[00:17:24]Look, if you if you have spoken to any development economist or you studied development, okay, uh development is a major part of even studying comparative politics and so I've done several courses in development and let me tell you that all countries that have developed economically have gone through this cycle from agriculture to manufacturing to services.

[00:17:49]This is the progression. You go from first you become ugly culturally shall we say self-reliant and then farmers then go and work in factories and that's how manufacturing develops and then you go from factories to offices.

[00:18:08]India is trying to miss or bypass manufacturing and go from farming uh straight into services. It is a peculiar model. it's not going to last too long.

[00:18:19]It happened just because of the IT services that the US has basically got from India. So the huge IT jobs that were created in India was because India was exporting 70% of uh to the US alone. So they had one major client which essentially distorted India's trajectory. So India when Narendra Modi became prime minister in 2014, India's share of manufacturing of its GDP was 17%, now it's 12%. So India is not going through that. So now the US did go through it. Okay. So US is at 77% services and the rest is manufacturing is just 10% and then agriculture.

[00:19:07]If you look at UK and Germany and France, all of them are close to 80% in services, it's only China which has a huge manufacturing partly because 50% of global manufacturing is being done in China. So now Donald Trump says he wants to go back and create manufacturing jobs because the people who vote for them are not keeping up pace with evolution of a society and not joining the service industry. So imagine if you are somebody who works in a factory. You left high school. you went into a factory and you you're working on on a conveyor belt kind of things, you know, and you're used to doing something like take this microphone and put it in a box and that's all you've been doing all your life because you're in a factory where you're packaging and now suddenly this is being done by a robot or this is being done in China.

[00:20:04]What will you do? You don't have a job.

[00:20:07]You're suddenly going to go and design web pages. No, you'll have to learn. You don't even know how to use a computer.

[00:20:15]So, these are the people who are left behind by globalization, who don't have skills for the new economy.

[00:20:24]And it is for them that Donald Trump wants to bring back manufacturing jobs.

[00:20:27]It's not possible at all. For example, if he make iPhones in the United States, the iPhone cost $1,000.

[00:20:36]Now, all iPhones that are used in the US come from India.

[00:20:42]If we make iPhones here in the US, they will cost us $6,000.

[00:20:50]Who is going to buy? I can't buy $6,000.

[00:20:54]I can't buy a $6,000 laptop. I'm in the top 20% income when it comes to income in this country.

[00:21:03]The reason why the economy is booming and Apple is such a big company is because every other kid in the United States, nearly everybody has an Apple or a major laptop.

[00:21:13]I actually have five. I have two here on the table. See, this is a bigger Apple laptop. This is another Apple laptop, an Apple Watch, Apple phone. So, yes, we are able to buy these things because they made in China and they're cheaper for us.

[00:21:28]You can get a very decent Apple laptop for 1,200 bucks here in the US. If America made that, it'll cost $8,000.

[00:21:36]Nobody's going to buy it. There will be not enough sales. The companies won't make profits and they will shut down and there'll be very few jobs anyway.

[00:21:44]But if you force Apple to bring this back, what Apple is going to do is to make this with robots.

[00:21:52]So there will be manufacturing in the US but more by robots and AI and not by individuals. So individuals will not get job. There will be no manufacturing jobs. Manufacturing in the US could increase. I concede that. And that is what Donald Trump should have been focused on. But that's not his motivation. And I don't know why Elon Musk could not convince him. He was buddy buddies for Elon Musk for so long.

[00:22:16]Musk could have told him, "Look, Donald, we can bring back manufacturing to the US but not manufacturing jobs."

[00:22:27]Anyway, that is his goal and that is why he was trying to impose all these tariffs etc. and now that is out. So when he goes to Beijing and negotiates with Xi Jinping, I don't think he has a weapon called tariffs in his pocket, which means that American courts have inadvertently made Beijing much more stronger than the US in this bilateral negotiations which will happen in in 5 days time. Donald Trump is and so is Xi Jinping. They're both looking for a grand bargain.

[00:23:04]Resolve all issues in one deal.

[00:23:07]Uh part of it could be affected by a lack of resolution. I think if Iran agrees and there's some kind of an agreement before Trump meets uh Xiinping, there's a better chance of having an uh agreement and a grand bargain between US and China. But if the Iran issue is not resolved, then Donald Trump will just become Netanyahu's servant, a pug there going and advocating for Israel with Beijing and not it'll become just Israel focus. How do we protect Israel from Iran? That's what this whole damn thing is going to become and nothing about the US.

[00:23:50]Anyway, to summarize, the federal courts have thrown Donald Trump's second tranch of tariffs out. he may have to return all of it again as it is he's returning the $166 billion that he created. Now coming to the final point, all of this does not mean that those deals that countries have made the U. So for example, Donald Trump yesterday threatened the European Union and said that by July 4th, he wants the Europeans to fulfill the obligations of the trade agreement they had with him, which means that they will have 0% tariffs on all American goods, 15% tariffs on all European goods, and the Europeans will buy $250 billion worth of American stuff every year for the next 3 years. and they're going to invest some $650 billion dollars or more, I'm forgetting what that number is, in the US. So he's threatening the Europeans and he may not have tariffs as an instrument but he has withdrawal from NATO or withdrawal of US forces from NATO for posts in European countries as the only lever that he has of of uh bullying the Europeans. Uh but the point is he's still that's that's a legal agreement. I think Europeans regardless of what the American courts say, they have to fulfill that obligation because they've made a deal with Trump. And so for those who are in India and other places, if you are thinking this is going to affect the trade agreements, no, India has not signed it yet. So India can maybe say we will not sign this deal and say screw you. We are not going to pay you 18% tariffs on all your goods.

[00:25:40]So we'll see what Donald Trump does. But I'm not sure whether India can take such a bold stance with regards I mean India has become so survile to Israel and the US in the under under Modi in the past one year that I don't think they will use this but technically India can say look your courts are throwing all of these things out so why should we sign this deal anyway thank you for watching conversations please subscribe to the channel if you have not already done so like this video press the bell icon and don't forget to share this video with your sociopolitical network. Until next time, I'm your host Mtad Dar Khan. For those of you who are watching from India, I'll be back in half an hour. I'm going to be doing a show in Hindi about uh the potential meeting uh between Xi Jinping and Donald Trump on the 14th and 15th of May. Uh and uh we will talk about what is on the table and what it does it mean to India in particular and the Indopacific strategy. Thank you for watching. Bye.