Court Jestering
Hi Friends!
On Friday, the Supreme Court of the United States finally reached a decision on the legality of President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose wide sweeping, global reciprocal tariffs. In a surprise I think too pretty much no one, the court ruled 6-3 that Trump in fact did not have the legal authority to do this and decisions of this nature are that of the United States Congress.
We’ve discussed the tariff situation here before. The last time we did, I got a lot of really interesting feedback from people that either currently or formerly worked in things along the lines of supply chain, factory management, that kind of stuff and pretty much everybody agreed on the same basic outline of facts surrounding the objective of these tariffs (at least at face value, which for the sake of meaningful discussion and avoiding conspiracy theories, is how we’re going to take it) and the point of the tariffs in the first place is twofold:
1. To bring back manufacturing jobs
This is where most people chimed in. The general consensus here is that this isn’t happening, above and beyond all else, simply just because the timeline isn’t there and it’s difficult to guarantee a return on investment even if somebody tries. According to most of the folks that I talked to, reopening boarded up factories is a minimum 3–5-year process, with investments being multiple tens of millions of dollars in most cases to restart or replace equipment, modernized facilities and have the bottom baseline there to even get started. Then you have to find and train people to run these factories. This is also a multi-pronged, multi-year, expensive problem to solve. The locations of these factories in a lot of situations is also an issue. Towns lived and died by these things and when many of them shut down, the towns did with them. This means you’re looking at probably at another 3-year process minimum to do the necessary things to convince people to return to these locations. Then you got to actually start production and do it in a capacity that will allow you to recoup your crazy expensive, multi-year investment in the process. Nobody I talked to really seemed to think (nor do I) that any of these tariffs are going to survive post Trump. For this reason, why would somebody go through the trouble of setting something up if they’re not even going to be able to open with a guarantee that the things that are allegedly making this even remotely attractive in the first place are even going to be there once you do? All the things considered, it makes way more logistical and financial sense to just pay the tariffs for now, wait these things out and cut the quality of your products and/or pass the expense onto your customers. Nobody’s reopening these factories and generally speaking, building new ones doesn’t check any boxes for anybody either.
2. To even the playing field with our trading partners
On a lot of levels, this seemed to be the thing that people agreed with more so than the jobs issue. Again though, a lot of dissent exists here too as American businesses need access to materials in order to do what they do and limiting that not only slows production but makes it difficult for existing businesses to provide products affordably and to keep people employed. This has been a really serious hit especially with parts companies and restoration and repair shops in this space. Of course, there are legitimate complaints about quality control from parts that have been outsourced by American companies to certain parts of the world. Failure rates across the board are way up over the past 5 years or so and there’s no question that American built products are still superior in almost every situation. Still though, that pales in frustration and is nowhere near as difficult to deal with from a productivity standpoint as significantly raised, but not expressly stated cost increases. This comes down to chasing around shipping companies, fees from questionable middlemen and then the surprise of finding out once the parts you need show up at your front door, that they’re 25% more expensive than you were expecting and now your build budget is blown. These tariffs were not rolled out well and they failed pretty much across the board to have clear directives on anything. As a result of this, certain countries post office systems (like Italy for example) have stopped delivering to the United States entirely. A month or so ago, a part that I’ve been looking for, for the last couple of years popped up on Italian eBay. Price was $40. I was like great, so I’ll check with the seller and see what the process is to get this thing over here now in a post tariff universe. The seller told me that it would have to be a shipping outlet like DHL or something similar and we began running prices. Long story short, between shipping, assumed tariffs and everything else, a $40 part turned into a $140 part and that juice was no longer worth the squeeze. This is one small motorcycle part that literally fits in a manila envelope, not an entire crate full of stuff needed to do $200,000 restoration. I think everybody wants to be on a level playing field at least in some capacity, and I think that some correction here is clearly needed, but none of this was done very well and the result has been chaos with the bill being sent to small and medium sized businesses and to the American consumer directly.
So now that the Supreme Court has ruled, what has actually happened here?
Essentially, the Supreme Court said that President Trump was not allowed to use an emergency law (called IEEPA) to put broad tariffs on imports. The Court basically said that only Congress has the power to create sweeping tariffs and the President can’t use emergency powers to go around Congress. That decision wiped out the large global tariffs that had been added under that emergency authority, but almost immediately after the ruling, Trump responded by announcing new tariffs using a different law (Section 122 of the Trade Act). Instead of the emergency tariffs the Court blocked, he said he would impose a temporary tariff (originally 10% but upped to 15% a day later) on imports under this separate trade statute. In simple terms: the Court took away one tool he was using to tax imports and he quickly grabbed a different legal tool to try to keep tariffs in place. The bright spot there is that the temporary tariffs are only good for 150 days and must be extended by Congress. If I’m a Republican in a swing district, there’s no way I’m doing this. Nearly 2/3 of Americans oppose the tariffs and this becomes a tough sell for somebody seeking reelection (call your local Congressman….).
When the Supreme Court made its ruling, it only blocked the tariffs that were created using the emergency law (IEEPA). It did not cancel other tariffs that were created under different trade laws. For example, tariffs placed under Section 232 (the “national security” law often used on steel, aluminum, cars, and auto parts) are still in effect. Tariffs created under Section 301 (used when the U.S. claims another country is trading unfairly) are also still in place. On top of that, normal base import taxes that apply to all countries under regular trade rules never went away. So, in simple terms: the Court removed one type of broad emergency tariff, but all the other existing tariff programs, especially the ones that affect autos, metals, and certain country-specific trade disputes still remain active.
How does this affect classic and collector cars?
For classic and collector cars, restorations and performance parts, the impact is mostly about imported components getting more expensive and more unpredictable. If the new 15% temporary tariff applies to certain imported parts (and if they are not specifically exempted), then anything coming from Italy, Germany, the UK or Japan, like carburetors, trim pieces, wiring harnesses, suspension components, or engine internals, could carry an extra duty on top of normal import taxes. Even if some auto parts are technically exempt under one program, other tariffs like Section 232 (again, national security tariffs on steel, aluminum, and certain auto-related products) can still apply, so many parts won’t be tariff-free. For restorations that rely heavily on overseas specialty parts, that means total build costs could rise several thousand dollars per project, especially when you combine tariffs with higher shipping costs and currency swings. Not great news for businesses in this space that were hoping for relief from the Supreme Court with this decision. Collector car values themselves are less directly affected, but if restoration costs increase, sellers may raise asking prices to protect margins and buyers may hesitate because projects become more expensive to complete. In short, the biggest effect is higher and more volatile parts costs, which trickle into restoration budgets and ultimately into the pricing dynamics of the collector car market.
Okay Darin, if you’re so smart, how would you have fixed these problems if you were President?
First and foremost, I don’t wish that job on anyone. That seems like it would be about the worst way to make a living imaginable and you’d have to be a lunatic to want to go through the election process and then deal with all the crap associated with the federal government at that level (which is probably one of the main reasons why we’re not getting our best and brightest and nearly all of our government officials seem to be totally insane, hyper fixated activists…. on both sides). This said, I think it should be pretty clear at this point, that the manufacturing ship has sailed. Even with these tariffs, American factories continued to shed their workforce and 108,000 workers were laid off there in 2025. That game’s over, we gave it away, time to move on. What I would have done instead is focus on bringing call center, tech support and software development jobs back to our shores. This means placing heavy consequences on companies that outsource and making sure that the H1B program in this country is temporary, being managed ethically and isn’t being abused.
According to indeed.com, the average factory salary in the United States is $16.74. On this same token, Indeed also states that the average call center/tech support worker makes $23.75 per hour and the average software developer makes $56.87. So my question is, why are we wasting all of this time, money and energy bringing back $17 an hour jobs that take years and millions to create, when we could set up offices in the vacant commercial real estate that litters this country (19.6% of commercial real estate in the United States is currently vacant – this is near the highest it’s ever been), in a month or two for a fraction of the cost and bring back these jobs, that in many situations already have a trained (approximately 100,000 people graduate from American universities with computer science degrees every year) or easily trained workforce available instead? Yes, I’m aware that there’s real concern that AI is eventually going to replace a significant portion of these jobs. Automation has been a major component in manufacturing for a long time too however and so I’m calling that an apples-to-apples situation and in both circumstances, both industries are going to need people to run the machines. If again we’re taking this at face value, trying to create manufacturing jobs in the United States via tariffs is a fool’s errand that everyone pays for. Instead of hammering our trading partners, we should be hammering American businesses who benefit from operating in this economy but want to circumvent Americans from being the people that are providing these services and benefiting from the economies that surrounds them.
As for trying to even the playing field, I don’t think there’s much I would have done there to be honest. Americans want inexpensive products and businesses want to keep producing things with affordable materials that are reliably sourced with a path of importation that is clear and predictable. Trying to wield an iron fist here just doesn’t make sense anymore. We’ve been living in a globalized universe now for at least 25 years and this means the rest of the world is much less reliant on us than some of our government officials are clearly recognizing. I’m not saying that we need them more, but we’re now in more direct partnership than we’ve ever been and as emerging economies continue to level up, this is going to be an even more glaring reality. There is a positive side to this however as well. If we’ve got trading partners that are playing around with us, we just stop buying from them and we start buying from one of these emerging markets. We control the behavior of those that we do business with via our ability to shop. This country spends a lot of money and we’ve got a lot of power as a result of that. All these tariffs have done is alienate us and make us more difficult to do business with on a day-to-day basis and we’re going to be left behind as a result.
In my opinion, these tariffs are a clear and obvious tax on the American people and if I were president, I would pull the plug on them immediately. This is what I expect to happen regardless of who wins the next election and right now, we’re all just being fleeced on principal.
President Trump should think about Americans here, take the hint and abandon whatever this plan actually is. Midterms are coming and he’s got a lot to lose if he can’t get his house in order and start focusing on things that actually make us great again.
That’s it for this week……
Darin Roberge