When the levy brakes: Trump’s tariffs struck down

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Hello and welcome to the intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. A surging populist right movement in Australia is now the best polling Conservative Party in the country. And that is picking away at one of the most persistent coalitions in the Western world.

And you can't argue that Agatha Christie wasn't prolific, but plenty have argued that she wasn't actually all that good. Our culture correspondent digs into the secrets of her enduring success.

But first On Friday, the Supreme Court kicked hard at one of the legs of Donald Trump's presidency. mister Trump had invoked a nineteen seventies era law, the International Emergency Economic Powers Act, or AIPA, claiming it allowed him to set tariffs whenever and on whichever country he liked. Six of the nine justices, including three conservatives, said, Nope.

The peacetime power to set taxes lies with Congress. Instituting and enforcing those tariffs was messy, to say the least. Unwinding them, refunding them will be messier still. And mister Trump, never one to take a court defeat gracefully, has more taxing tricks at the ready. Better deals for some, worse deals for others, and headaches for all involved.

So this is a totemic policy of Donald Trump's that's been struck down, and estimates suggest that the ruling would lower America's effective tariff rate by about half. Rajana Shandbog is our business affairs editor. But the president is already determined and is already rebuilding his tariff barriers brick by brick. Well let's talk about that. How has he immediately responded to this ruling?

So shortly after the Supreme Court ruling, Donald Trump held a press conference where he said he was deeply disappointed by the decision. And I'm ashamed of certain members of the court, absolutely ashamed. He thought that the judges who had voted with the majority were unpatriotic. by people that I believe have undue influence, they have a lot of influence over the Supreme Court. And he also announced a temporary global tariff of ten percent on all international trade coming into America.

which then the next day he increased to fifteen percent. Under what authority though? So instead of using the International Economic Emergency Powers Act, which is what the Supreme Court said, the use of that was illegal. Instead, he's using something called section one two two of the trade act of nineteen seventy-four. And that only allows temporary duties for up to a hundred and fifty days. So this fifteen percent tariff.

will be in place for 150 days and after that we're not quite sure what's gonna come. Now, this authority hasn't been used before, and it relies on the administration claiming that America faces fundamental international payment problems. that there's a large and serious balance of payments deficit, which is highly debatable and means that this authority too could be open to legal wrangling. There is another option here. which is implicit in the Supreme Court decision.

Which would be to go through Congress and get tariffs approved by Congress. But it's really hard to see that happening. Lots of lawmakers have slim majorities. There are midterms coming up. They don't want to be open to accusations of raising the cost of goods. when voters are already very worried about affordability.

But essentially, right out of the gate here, President Trump is doing more or less what we thought he'd do, what he said he would do, which is basically replace that system of tariffs with other kinds of tariffs over which he has clearer control. Yes, that's right. So it was expected that the Supreme Court would strike down these reciprocal tariffs and that the Supreme Court would say that the use of AIPA

was illegal to impose tariffs. So the administration has had some time to think about what a plan B might look like. Now section one two two is one part of that. But another option is to rely on sector specific or country specific tariffs under sections two hundred three two and three oh one, and these appeal to national security arguments. They also argues that some trade discriminates against America.

These require long running investigations before tariffs can be put into place, so Donald Trump loses some flexibility, but it does mean that he can reassemble his tariff wall. But in the meantime, I mean, as from the start with this this entire tariff effort, it's led to even more uncertainty or renewal of uncertainty. Yeah, that's right, Jason. Even if

America's effective tariff rate ends up pretty close to where it was before the Supreme Court ruling. There's still uncertainty for businesses here because the precise winners and losers after the ruling will change. Some businesses might find that they do slightly better than they did in the old regime. And we know that uncertainty over tariffs has already been a drag for them. It's already made them uncertain about hiring and investing. And that's just going to continue.

And as for the countries that had already struck bilateral deals trying to avoid the previous tariff wall, they may feel stiffed again.

Yes, I mean uh the result is just complete confusion. For example, the European Parliament has said it's going to delay ratifying the agreement that was struck between the EU and America last summer because it's not quite clear what's happening. Indian officials were meant to travel to Washington this week to talk about

implementing their trade agreement. That's on hold now. What seems to be the case is that Some countries that had quite high tariff rates are going to benefit in this new temporary regime. Those countries include China, Brazil, India, parts of Southeast Asia, Canada and Mexico, if you remember, had faced an extra tariff because of the so called fentanyl emergency, and the Supreme Court has said that's illegal, so those tariffs are coming off.

But there are some countries that are going to be losing in this section one two two world, and that includes Britain, for example, which had struck a deal quite early on for ten percent tariff rates and now could face something higher.

So in a sense, there's a disadvantage for those countries that went early to strike a deal. Aaron Powell And what about the money that countries have already spent to to accommodate the tariffs that were there before, that giant pot of money that was illegally collected? And that will now need to be refunded. Everyone from Brett Kavanaugh, one of the dissenting judges, the president to Scott Bessant, the Treasury Secretary, has been talking in the past couple of days about how

Difficult this refund process is going to be, figuring out what sort of paperwork the beneficiaries would need to file, and so on. So This question of refunds and how they're going to be delivered is still extremely unclear. It's another source of uncertainty for businesses. If they do come quickly, there's a bit of an irony here.

'Cause it might actually help juice the economy ahead of the midterm elections. And that could actually benefit Donald Trump. But what about more broadly the tenor of the ruling, the fact that this was such a flagship policy for Mr. Trump? There is a suggestion here that the

that the Supreme Court is being less uh emollient, let's say, than it has been in earlier in Mr. Trump's term. I think you're right, Jason. Over the first year of Trump's second term, we didn't really see much confrontation between the court and the president. And with this case, a case that was on the court's regular docket, not the emergency docket. Justices had a chance for a full briefing and to listen to oral arguments and they decided to strike down the tariffs.

And the one case to be watching now regards the firing of Lisa Cook. Now, as you might remember, the administration wants to sack Miss Cook, who is a governor on the Federal Reserve Board. And what's at stake here is the very independence of the central bank. And so the key case to be watching next is what happens there. Rajna, thanks very much for joining us. Thanks for having me, Jason. Why choose a sleep number smartbed? Can I make my sight softer? Can I make my sight soft?

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For the entire post-war period, Governments in Australia have sloshed gently between two types, ones led by the center left Labour Party. Or those led by a perpetual coalition that contains the Liberals, confusingly a conservative party, and the Nationals, a smaller and even more conservative one. Not many independents, not many spoiler parties. Until recently.

Activists would think that I'm divisive. I'm not divisive. All I ever should pull people together to be proud who we are and live in peace and life. Pauline Hansen and her anti-immigration One Nation Party are Spoiling for a fight. Polls in January suggest that one nation is now the most It's upending all of that gentle sloshing. The liberals are in disarray.

On February 13th, they ousted their first female leader. Less than nine months into her tenure, Susan Lee is gone, no longer the liberal leader and quitting politics. Her successor has his work cut out to right the ship on the political right. And he knows it. Well, after winning the Liberal Party leadership, Angus Taylor issued a warning. It is clear we are running out of time.

I won't mince words. The Liberal Party is in the worst position that it has been since it was founded in 1944. And that's no hyperbole. Aaron Connolly is our Asia Diplomatic Editor. At the last election in May 2025, the Liberals suffered their gravest electoral defeat since it first contested an Australian election in nineteen forty six, and surveys suggest they would fall even farther at the next election.

So let's wind back here and uh give me sort of a a thumbnail sketch of Australian politics on how we got to this point. Well the Liberals have governed in coalition with the National Party since the end of the Second World War, and the Liberals primarily contest the cities, and the national party mostly holds rural Australia.

Liberal voters have tended to skew more affluent and tend to be more centrist on social issues, and national voters tend to favor a bigger state and tend to be more culturally conservative. But this has been a really successful arrangement. The two parties have governed together for nearly two thirds of the period since the Second World War, and they've worked together in opposition for the rest.

But in some way they are threatened by the rise of one nation. A story we've seen play out all over the world where a harder right party surges ahead. What is it about one nation that's messing with the equilibrium of Australian politics? One nation really vies for the same rural voters that the national party does. And right now it's just eating the national party alive. If voters cast ballots as polls now suggest that they would, the nationals would be wiped out.

And they've twice, since the last election, dramatically exited the coalition and then rejoined days later to try and put some distance between themselves and the Liberals.

But and this is the key point, the liberals also have problems. Since twenty eighteen, they have been defeated in seven of their one time urban strongholds by independent candidates. These candidates, they mostly espouse traditional liberal policies on the economy, their free market, but they differ mainly in arguing for stronger action to tackle climate change. While the Liberals color is dark blue, these independents have become known for their shared use of teal.

But Erin, seven seats doesn't sound like such a big deal. This does not sound like a dramatic loss. You're right, Jason, but the Liberal Party used to be one that could win the outer suburbs, but also the cities. And when you think about these seats, which have been held by the Liberal Party, in most cases uninterrupted since it was first formed. These are suburbs overlooking Sydney Harbour.

They've produced two of the last four liberal prime ministers. And so losing these seats was not just a shock to their identity, but it was also a real challenge to the electoral math for the liberals if they're going to try and form another government. And I know you spent some time in Australia speaking with conservative politicians across the board. Did you get a sense that they have a plan here?

Depends on who you talk to. Mr. Taylor, the Liberal Party's new leader, is signaling a forthcoming shift to the right on immigration, and his supporters hope that that will ease tensions within the coalition with the nationals. and also slow the bleeding of the coalition supporters to one nation. I spoke to Senator James Patterson, who's a rising star within the Liberal Party.

He argues that teal independent seats can be won back without moving to the center on climate or immigration. And then on the other hand, you have someone like Malcolm Turnbull, who's a recent Liberal Prime Minister. In fact, his constituency was one of those that overlooked Sydney Harbor. How big a challenge is one nation? Is this a a serious thing or what?

And he warns that you cannot outhand Pauline Hansen, referring to the one nation leader who's made hostility to immigration or brand for the past thirty years. You cannot outdo her. If you then say this is the big issue This is the big issue. People will say, Oh, I'd rather vote for the real deal. But there's another problem which is Australia, unlike some other democracies that are experiencing this shift to the populist right.

can't afford economically to shut down skilled immigration to Australia or to dramatically reduce numbers in the ways that some on the populist right are calling for. But nevertheless, the momentum, as you say, is with one nation at the moment. Do you see its vote share just rising and rising here?

Well, senior liberals claim that Pauline Hansen is a liability. She's fallen out with most of her colleagues over the last thirty years. In fact, two thirds of those who have been elected on a one nation ticket over the last thirty years have left the party before their parliamentary terms. have finished. And so they say she won't be able to win enough defectors and keep enough defectors in the party

to win more than a handful of seats. One test of that assumption will be the recruitment of Barnaby Joyce, who is a former nationals leader and deputy prime minister who has just joined One Nation. And mister Joyce is a a good fundraiser and he's popular in parts of rural Australia, and so could be an asset to one nation if Ms. Hansen can keep him in the party.

But Australians of all political colors often say that the country's system of compulsory and preferential voting will drive outcomes to the center. And so they dismiss the challenge that one nation presents. But those systems might also create an opening for the populist right. A forthcoming by election will give some hint to the truth of that.

But in the meantime, the role that a strong centre right opposition party would normally play in Australia and elsewhere, calling for higher defence spending, greater fiscal discipline and lower taxes, the Liberal Party isn't really playing that role. And so the Labour Party is skating by without an effective challenger.

Well, that's sort of exactly the point here, isn't it? That one nation is eating the lunch of the nationals and the teals are eating the lunch of the liberals and the coalition in opposition or in in government kind of doesn't hang together if that carries on. Exactly, Jason. You know, one possibility is that after the election, the right in parliament will be divided between one nation, the Liberals and the Teals.

And the Liberals will not be able to form a government if they need to rely on both the teals and one nation who cannot work together. So the prospect of a centre right government coming to power in Australia over the next several elections is looking increasingly dim. Thanks Jason. It's always nice to talk to you.

Agatha Christie is the best-selling novelist of all time. But that doesn't mean everyone likes her. John Fasman is a senior culture correspondent for The Economist. Take Edmund Wilson, for instance. Her writing is of a mawkishness and banality, which seem to me literally impossible to read. or the similarly minded Julian Simons.

The Colonel's doctors, lawyers, and others who inhabit this world are no more real than Cludo figures. The object of their scorn, meanwhile, is as famous as ever. Agatha Christie's books still sell, and her works continue to be adopted for film and TV. Why does she remain so popular fifty years after her death? There are three reasons. First, Christie favored unlikely sleuths.

Think of Jane Marple, for instance, an elderly spinster fond of knitting and gardening, who solves crimes in a dozen novels. Or Lady Eileen Brent, nicknamed Bundle. She stars in the Seven Dials mystery. She's a young woman who at first seems flighty and underwhelming, but turns out to be perceptive and, the most important quality for a fictional detective, relentless. Even Christie's most famous actual detective, Ercu Prairo,

Isn't hyper-rational and physically brave like Sherlock Holmes, and he's not quick with a gun like his hard-boiled successors. Instead, he's short, chubby, prim, and finicky, with a carefully waxed mustache and dandyish clothes. But these unlikely sleuths see things and pursue leads that elude police officers, who in Christie's books tend to be kind of hidebound and dim. This makes readers an accomplice in her detectives' independence and ingenuity.

Christie favors isolated settings, country houses, locked rooms, sometimes an actual island, and most famously the Orient Express. These settings turn every character into a suspect, and the Edwardian locales transport today's audiences into what may seem a simpler and more romantic time. These bounded settings let the narratives restore a sense of order at the end.

Unlike the globetrotting stories of, say, Ian Fleming or John Le Care, in which an implacable enemy is just held off for a little while, Christie's smaller worlds really do feel put right when the cover closes or the credits roll. Christie had an extraordinary gift for plot. Her books move along quickly, and her twists are cleverly disguised, right up until the moment of revelation, at which point they become obvious.

One of the few exceptions might be the Seven Dials, which has a conspiratorial and slightly outlandish conclusion. But no one can write 66 novels, 150 short stories, and 25 plays and be perfect each time. And in that productivity lies the real secret to Christy's success. She just worked really hard and became good at her job. No tools. That's all for this episode of The Intelligence. We'll see you back here tomorrow.

At Schwab, how you invest is your choice, not theirs. That's why when it comes to managing your wealth, Schwab gives you more choices. You can invest and trade on your own. Plus, get advice and more comprehensive wealth solutions to help meet your unique needs. With award-winning service, low cost, And transparent advice, you can manage your wealth your way at Schwab. Visit Schwab.com to learn more. That new thing? Yeah.

The Drop by GNC, bringing you all the newness that matters, hand picked by the pros who actually know what's up and what's proven to work. We keep you on top of the trends and dialed into what's next. Whether you're crushing it at the gym, leveling up your game, or thriving every day. The Drop by GNC is where the latest solutions in health and wellness land first. Nonstop innovation and Fresh Finds Daily. Explore what's new and what's next on The Drop by GNC. G and C