Brown: As Supreme Court upends Trump’s disruptive tariffs, new uncertainties arise

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For the past year, Minnesota industries have struggled to adapt to President Donald Trump’s international trade policy. Sweeping tariffs on foreign products, sometimes exceeding 100% for short periods, dramatically affected the price and availability of goods and materials used here in the United States.

At the same time, leaders in certain industries, such as iron mining in northern Minnesota, praised the tariffs. Mining and steel companies hoped Trump’s actions would encourage more domestic production of steel and demand for Iron Range taconite pellets. The president named these tariffs — the heftiest since the Gilded Age of the late 19th century — as the cornerstone of his “Make America Great Again” campaign pledge.

Whether you support or oppose the tariffs, we all must contend with new uncertainty. On Friday, the U.S. Supreme Court ruled that Trump overstepped his authority in unilaterally implementing the tariffs without congressional approval. American trade policy returns to the drawing board.

Ultimately, that’s a good thing.

First, let’s acknowledge the history of this moment. Trump’s presidency challenged constitutional and political norms from the start. While lower federal courts have pushed back at times, the Supreme Court — led by a 6-3 conservative majority — has not. Earlier decisions backed or tolerated an unprecedented expansion of executive power by the administration.

Second, understand the fundamental nature of tariffs. They are never paid by foreign governments. They’re paid by Americans — first by the wholesalers who imported goods, and eventually by consumers like you and me. Trump’s tariffs dramatically increased prices on tech products, cars and groceries — an expense that depressed consumer confidence during what was otherwise a strong economy.

Tariffs implemented across the board created as many problems as they might have solved. Despite a handful of success stories, U.S. manufacturing declined overall as it became more difficult for companies to source materials and sell products on the international market.

The implementation of the tariffs was erratic from the start. Extremely high tariffs would be announced, but then lower ones would be quietly implemented. Tariffs would be removed for certain countries or industries, often based on who stood in Trump’s good grace. If you donated money to his pet projects or invested your money the way he wanted, you got a better deal. So did the president, who turned his first year in office into the most lucrative year of his life for his personal fortune.

Minnesota was uniquely affected by the trade war with neighboring Canada, a major trading and tourism partner. Trump’s tariffs united Canadian voters behind Prime Minister Mark Carney, who has vowed to lead a transition to a more independent Canadian economy that trades more with nations other than the U.S. The side effect has been reduced Canadian tourism and less cross-border commerce, which hit border towns especially hard.

Now we face a big question. What happens to the money collected by these tariffs? Billions of dollars might now be restored to companies and importers who paid the tariffs, and some are arguing that American consumers should be granted rebates. This will be a thorny issue as the federal deficit grows past record highs.

One important example comes in iron ore and steel.

Steel is not only a vital industry in terms of American jobs and economic impact, but also a core function of domestic construction and national defense. The rise of foreign steel imports in previous decades, along with new, more efficient technology, dramatically reduced U.S. steel and iron mining jobs since the 1970s.

Today, Minnesota employs fewer than 4,000 in its iron mining industry, with more than 600 currently laid off from mines in Hibbing and Virginia, Minn., since last spring. Cleveland-Cliffs and U.S. Steel had both supported Trump’s tariffs because the tariffs favored the American steel they made, and they had achieved stability previously lacking.

But steel tariffs are complicated. Cliffs laid off 600 miners when it realized it needed fewer pellets and less steel to make the same amount of revenue as before because of higher prices. The same phenomenon affected the automotive industry, where car prices have remained stubbornly high even as more Americans report difficulty affording a vehicle.

Many of these companies made enormous decisions based on the continuation of tariffs. This latest change may dramatically affect them in ways we don’t yet know.

The way these tariffs were implemented was inappropriate, but the Supreme Court didn’t rule out all tariffs, only unconstitutional ones. The U.S. may now begin a more deliberative process of using tariffs when they’re needed and avoiding them when they risk unintended effects.