I bought ice cream while on vacation and got a quarter back in change because they had stopped using pennies. That is inflation.

The Supreme Courts ruling that IEEPA tariffs are illegal will have more ramifications than the administration suggests. That is why President Donald Trump was so angry. First off, the Supreme Court got it right. Tariffs are taxes, and under the Constitution only Congress has the authority to levy them. Trump was overstepping his authority and he knew it … doing it anyway, hoping SCOTUS would not rein him in. They did their job. This changes the game significantly in how the president can operate. I will get into specifics in this report.

The ruling doesn’t change the fact that we, the USA, desperately needs this revenue stream that tariffs provide. When Trump laments that the loss of tariffs would ruin the country that is not such an exaggeration. This tariff revenue is necessary not because the U.S. is strong, but because we are weak fiscally. This country is on a fiscal path to oblivion. We spend far more that we take in in revenue, making up the difference with Treasury borrowing. Foreign nations that used to buy our Treasury debt are selling it and using the money to buy gold. The dollar is at risk.

The real eventual crisis comes from that the tariff revenue doesn’t fix it. I generously estimated tariff revenue at $368 billion annually. More conservatively, the CBO estimates it would be $270 billion. The first $133 billion that was collected would technically have to be paid back, being illegal.

Trump brags about how this revenue is hundreds of billions and will make the country rich, but he greatly exaggerates. The annual deficit is a multiple of annual tariff revenue and so it is not enough to put the country on a sustainable fiscal trajectory. Interest on the debt, currently near $1 trillion … is forecast to reach $1.5 trillion by 2032 and near $1.8 trillion by 2035. Ray Dalio calls it a “debt death spiral.”

This is why Trump is so focused on gaining control of the Fed to manipulate rates and making statements like “the U.S. deserves the lowest interest rate in the world.” We are at the point where the increase in interest paid to service the debt inflates to where it will soak up the tariff revenue.

Do the American people know the math?

Congress cannot raise taxes nor cut spending enough to put the country on a sustainable fiscal track and politically survive.

The One Big Beautiful Bill Act doses not fix this either. The tariffs were a stealthy way for politicians to tax us without it being called a tax. The president says that other nations pay the tax. That is BS and you know it. No nation paid my son’s tariff on his coffee. He and his customers did.

Shifting gears on what legal authority these tariffs can be imposed under has limits. None of these statutes allow the president to wake up in the a.m. and decree a new tariff of the day … just because he feels like it. Congress would be defecating their pants. Many liked Trump taking them off the hook politically for the tariffs and now they get put on the hot seat by SCOTUS.

Congress willingly gave up its Constitutional responsibility to this president because responsibility bears political risk they avoid. Asked this weekend about their opinion of the SCOTUS ruling on tariffs and most members of Congress responded “blither … blither … blather.”

What Trump was so angry at having lost was his ability to intimidate by imposing tariffs as retribution for not succumbing to his will. When Mark Carney gives a speech that he doesn’t like or China retaliates with tariffs or the EU opposes his acquisition of Greenland, he cannot arbitrarily impose 25%, 50% or 140 tariffs in a fit of pique as he did. SCOTUS ruled that illegal and that it requires an act of Congress to impose such levies. That undermines his “negotiation leverage” greatly.

This is the SCOTUS first real limitation of his presidential power. He was taking it to the limit like there was no limit, and Friday found out that there was a limit to his power. That incensed him. Iran should be worried.

Trump’s justification for imposing tariffs started off with countries with which we had a trade deficit, illegal drug trafficking, the reciprocation of tariffs, alleged accusations of unfair practices, protection of a domestic industry or some national security emergency declared whether it existed or not.

Under those criteria, Brazil thought that they would be in good shape. They ran a trade surplus with us, had minor reciprocation risk, no drug risk, were not a security risk and exported products like coffee that the U.S. could not produce domestically. They could handle a 10% tariff.

They got a 50% tariff because Trump didn’t like them convicting former President Jair Bolsonaro for a failed coup attempt. Then to show how transactional he is, he makes an exception to import Brazilian beef. This is specifically the thing for which SCOTUS ruled was illegal and should be.

Congress would never impose a tariff for that. But see how this undermines the president’s power to intimidate. There is no U.S. coffee industry, so the tariff will be paid by U.S. coffee consumers. My son is owed $42,000 because of an illegal tariff. It should be paid back, but good luck to him with that. A lot of American small business, like my sons, got screwed by these illegal tariffs. It brings it all home when you pay the tariffs.

This was all supposed to be about getting back at China … and Canada has gotten treated more harshly than China has. The U.S. House voted against the Canadian tariff too, so Trump withdraws his endorsement of Republicans who voted against his Canadian tariffs … more retribution and intimidation.