in a locked and secure location when children are present.

Now the Supreme Court is in recess as questions linger over President Trump's power to impose tariffs.

Justices heard arguments in November.

Wayne, whether the 1977 international emergency Economic Powers Act Grant's President Trump the power to enact tariffs.

Trump's lawyers argued tariffs fall under international regulation are protected by the law.

But opponents say tariffs amount to a tax and allies in Congress control.

Not the president.

Here to explain what's at stake and how the court may rule is Stephen Schweyen, professor of law at the University of Illinois, Chicago and Benjamin Krause, executive director of the University of Chicago's Becker Friedman Institute for Economics.

Well, thank you both for joining us in making the time.

There's a lot to talk about.

We did talk about before that.

It's a little complicated.

There's so much going on.

So I want to start with the professor Shrine.

Let's start with some background around this suit.

Cool.

Brought this to support to the Supreme Court.

And what are they looking to argue?

So number states, a small businesses brought the claim to the Supreme Court.

And what they argued is that President Trump in implementing the tariffs adopting these tariffs.

>> Exceeded the authority that Congress granted him under the statute that you mentioned.

We sometimes call it I E P a the initials of the statute.

The statute says that the president has authority to regulate the importation of goods and what Trump did that was to implement these tariffs.

And so the question is, is to tariff also to regulate it?

What are the 2 types of terror is being argued over?

So there are 2 tariffs here.

One kind of bucket is a generalized tariff that the president has levied against almost every country in the world.

Starting at 10%.

But then for certain countries moving for 11% to up to 50%.

And then the other bucket of tariffs we can refer to as the trafficking tariffs.

What President Trump did was to identify certain countries, Canada, Mexico, China, who President Trump said weren't doing enough to regulate the importation of fentanyl to the United States.

And so he imposed tariffs on them in order to encourage them to regulate fentanyl would you say there both sides are trying to argue about?

They're both trying to argue about that and whether Trump's authority to implement the tariffs under the I E a whether he has that authority and then let's break down specifically briefly, explain.

Explain what tariffs so, you know, when you hear the word tariff, I think the easiest way to think about it is is an import tax, right?

are familiar with income taxes, sales taxes.

>> So, Tara, he's just a tax on imports.

But unfortunately, unlike when we're buying things at the store, we don't see that added on at the end, it's already baked into the price is that we're looking at now people might be seeing those prices.

Absolutely.

So we have recent research has come out.

That's that's showing that about 94%.

So almost all of the increase in tariffs are being paid by us by you.

Whether you're a consumer, an individual or or a small business or any business the United States.

I mean, does that bother you?

but our side, what we're primarily looking at sort of what is happening in.

So I would leave it all to those watching at home to decide how they feel about it.

But in general, when you hear people talking about increases in tariff rates, you can as a rule of thumb.

Think about that is an increase in the price that you're likely going to see on those products on the shelves and breaking it down a little reporter there.

How might they differ from the forms of economic powers like sanctions, embargoes and asset freezes.

>> So again, this is just a tax.

And so this is focused on, you know, it's looking to try to raise revenue by having more collected from those of us who are purchasing things.

So it's really focussed internally looking at those of us who are within the United States, those other things that you're in terms of their legal ramifications and certainly go to to Steve here in terms of what that means.

But those are really primarily externally focused really looking there different kinds of tools that generally are used to achieve different professions, trying to historically how as a Supreme Court weighed in on the president's economic powers.

So this Supreme Court has weighed in from time to time on the president's invocation of I EPA to issue things bar goes or asset freezes.

>> And has largely upheld the president's authority to do that.

But the president has never no president ever has issued tariffs under the eye.

And that's really the question in the case.

>> And to end a little bit further, President Trump has said that even if he loses at the Supreme Court level, he'll find another way to impose similar tariffs if the court rules against the administration.

What other avenues might the Trump administration have to enact tariffs on other other legal president?

>> So it turns out there are handful of other laws that authorize the president to issue tariffs in particular circumstances.

But there are more circumscribed than the IEP is.

And so, for example, one law says that the president can issue up to 15% tariffs for 150 days right?

President Trump did a lot more than that when he issued his tariffs last year.

Others lot like other laws.

Skews me say things like the president might be able to issue tariffs if there's a severe balance of payments.

Problem or if there's a national security crisis.

But in order to to that, he has to conduct an investigation.

And so these other authorities either limit the amount of the amount of time that he can impose the tariffs or they have procedural requirements that I suspect he doesn't really want to comply with, which is why he turns to it.

>> And I'm interested because this is your world.

You know, what are your thoughts about the arguments between both sides?

Well, it's really interesting have some very interesting separation of powers issues coming up.

So remember, EPA says that the president can regulate the importation right in the question is, tariffs fall within the power to regulate?

turns out that's a really complicated question as to the separation of powers between Congress is power to impose taxes has been talked about or Congress's power to regulate or the president's power to take a statute like that and interpret it to impose taxes or to regulate interesting.

And then in research published January 23rd, the Tax Foundation found.

>> The Trump taps the Trump tariffs amount to an average tax increase per U.S.

household of $1000 and 2025. and 1320.

26, what are some of the impacts we're seeing from tariffs on consumers?

>> I think many of us enjoy a little bit of wine at home.

And so one of our recent papers that came out took a look at what happened when tariffs increased by about 25% online in the last Trump administration.

And the rather surprising finding was that for every dollar of increased tariff collected, we were at home paying more than a dollar in something like 30, some 30% more than a for the wine that we are taking home to enjoy with our families.

And so I think we're seeing we're likely seeing similar things playing out right now in the market.

But an important piece to keep in mind is that our research has consistently shown that takes a significant amount of time for us to see the full impact of these kinds of taxes.

Usually about 12 months.

And so we're likely only starting to feel the impact on the shelves at home.

But we would also expect the even as we try to unwind these taxes in the future, we would see lagged impact continue to impact us for quite some time.

And that I think goes mention to you that there's a small business, a small bookstore mean there seeing their tariffs of taxes up to $4,000 for importing books like internationally.

I mean, that has to be tough.

It's gonna be very difficult in and I would say more than anything when you're thinking about sort of far more basic sense of economic modeling.

Introducing uncertainty is one of the most difficult things for businesses.

So your friend with that small bookstore, how are they going to manage for the short term are going for the long term can have confidence that this is what they're going to be facing, something that probably many small businesses think about.

>> And have the tariffs have positive impacts on the U.S.

and the global economy.

What are your thoughts on that?

So I would say one of the most important things that we should keep in mind is that we've seen Rick.

>> In really significant research has come out recently.

The role of trade in building relationships and the reciprocal nature of trade.

And so kind of contrary rather popular narrative that the system has been rigged against United States.

We actually been suggesting that we're really seeing a much more beneficial relationship across the world in terms of our trading partnerships, it would be really a shame to lose those things.

And as we've seen and with the events unfolding in Davos, there's certainly indications that we're starting to find ourselves in an increasingly isolated position.

I think that would be extremely detrimental for us.

And in the longer term.

What are your thoughts, We've been saying.

so, the economic questions are above my pay grade.

I differed about a >> With the constitutional questions are really, really important here, John.

And we're talking about presidential power, right?

We've seen a Supreme Court kind of time and time again, give the president more and more power over 2025.

This case is going to be a really key indicator about how much power the court is willing to give the president too, have the substantial effects on the international economy.

And speaking about that, because though it may be hard to predict a final decision.

>> We have heard concerns raised raised by conservative justices in November Justice.

Barrett said can you point to any other place in the cold or any other time in history where the phrase together, regulation, importation has been used to confort tariff and posing authority.

Where does this leave the justices?

>> So we just don't really know.

That's the problem.

The most commentators who have looked at this said it's either fifty-fifty or just or outside a 50, 50.

It's very, very difficult to anticipate the way the Supreme Court is going to will based on the oral arguments.

We do know that justice parents concerned came up at oral arguments, but there countervailing concerns as well that cut the other way.

At this point, it looks like we can count some heads on the court that look like they're going to uphold the tariffs and other heads that look like they're going to overturn the tariffs and then there are a couple of justice is that we just don't know.

>> 2 been watching very closely now who are likely to support Trump's tariffs and who are likely to vote us OK, so good question.

So we're I think probably certainly we're looking at Justice Thomas and Justice Alito who are willing to uphold the tariffs, probably and haul and then as up being opposed to them, we're probably looking at Justices, Sotomayor, Kagan and Jackson, and probably Justice Gorsuch as well.

Based on some of the questions.

So Justice Kavanaugh looks like he may be willing to uphold the tariffs and then we're really looking at Chief Justice Roberts and Justice.

Amy Coney Barrett will just have to see what they You're following this very closely.

And then last question, how have economic tears impacted the relationship between the U.S.

and foreign allies?

>> Well, I said a little bit about what you know, what we saw coming out of Davos and thinking about this relationship that we're building a new national stage.

really important to think about how we treat our friends.

How would you want to be treated when you're out there working with your own neighbors?

tariffs were such a fantastic idea, you Milton Friedman famously said that we should have them between the states and so for thinking about whether or not we want to tax, though trade that we have among the states where among other nations, think it's important to think about what are the long-term implications for those of us Well, thank you both for your insight.

I think those very informational.

Our thanks to Steven Schwinn, professor of law at the University of Illinois, Chicago and Benjamin