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The Hill
a few seconds ago
- The Hill
Tariff rebate checks in 2025? What we know about current legislation
(WJW) – It's not a pandemic stimulus check, but Congress is currently weighing the possibility of sending the American people more money. As part of the American Worker Rebate Act, introduced by Republican Sen. Josh Hawley of Missouri in July, people would receive hundreds of dollars in tariff rebate checks, which work to counteract the financial burden imposed on families by the Trump administration's tariffs. As the bill stands now, a household would get $600 for every child and adult – meaning a family of four would receive $2,400. Check amounts go down for those U.S. residents who are making more than $150,000 as a family or $75,000 individually. The bill has not been passed by the Senate or the House, and it must overcome multiple obstacles before being brought to President Trump's desk to sign. However, last month, Trump did say he was 'thinking about' approving a rebate. If the revenue from the latest tariff rollout exceeds projections, the bill leaves room for a larger rebate to be sent out to the American people. So far, there has been no word from Congress or the IRS on the possibility of a fourth stimulus check, like those issued during the height of the COVID-19 pandemic. A rebate is a refund of something already paid for, while a stimulus is simply money given to pump up the economy. The U.S. Senate is currently on break for the summer and will be back in action on Sept. 2.
The Hill
a few seconds ago
- The Hill
How Trump's tariffs could actually work
Economists prefer free trade because it is the best policy for global welfare. But what the debate around tariffs often fails to recognize is that there is an economic rationale for U.S. tariffs of 15 to 20 percent. Large countries like the U.S. have market power, which means U.S. demand affects global prices. Tariffs depress U.S. demand, pushing global prices down. As a result of tariffs, the U.S. imports goods at lower prices and also obtains revenue in the process. Most economists estimate that the optimal tariff for the U.S. is between 15 and 20 percent but could be as high as 60 percent. The major problem with imposing high tariffs is that if our trade partners retaliate with similarly high tariffs on imports from the U.S., the U.S. will be worse off. So, the U.S. wants a tariff if it can act alone, but cooperation on low tariffs is the best policy for all — and better for the U.S. — if the alternative is a trade war. To get a sense of the magnitudes, a recent study estimates that 19 percent tariffs could expand U.S. income by roughly 2 percent and boost employment if other countries don't retaliate. However, the effects on income and employment become negative when other countries also impose tariffs. The basic intuition for the tariff is that foreign sellers want access to the huge U.S. market and are willing to pay a fee for that access. Consider a German auto firm, say BMW, that sells lots of cars in the U.S. If the U.S. places a tariff on German cars, Americans will shift to buying more GMs and fewer BMWs. But the U.S. consumer is hard to replace, so BMW will lower the pre-tariff price of its cars to maintain competitiveness. U.S. consumers face somewhat higher prices on BMWs with the tariff, but the tariff revenue that the U.S. government collects more than compensates for the consumer loss, so the U.S. as a country is better off. Put differently, because the U.S. is large, some of the tariff is paid by BMW. The ability to pressure BMW and other German producers to lower prices only works because of the extraordinary buying power of the U.S. consumer. If, for example, a small country, say Ghana, puts a tariff on BMWs, it would negligibly affect total sales, so this effect would be absent. This market power is similar to the leverage that companies like Amazon and Walmart have to push down the prices of their suppliers because they control such a large share of the market. The problem with using market size to push down import prices is that the U.S. is not the only large country. If other large markets, like the European Union and China, also raise tariffs then everyone is worse off. In a trade war, U.S. exporters will also have a hard time selling abroad, while U.S. consumers will have fewer varieties to choose from and face higher prices. The biggest risk Trump took when he reversed decades of low, predictable tariffs was starting a trade war with tariffs spiraling out of control around the world. Given the recent news of U.S. bilateral trade deals with the United Kingdom, Indonesia, Vietnam, the Philippines, Japan, Korea and the EU, as well as a preliminary accord with China, the gamble may have paid off. One after another, our most important trade partners are accepting significantly higher U.S. tariffs without raising their own tariffs on imports from the U.S. Moreover, in addition to accepting higher tariffs on their exports to the U.S., Europe, Japan and Korea are committing to increased investment in the United States. Why are countries caving? The large market is part of it, but the gaping U.S. trade deficit with these markets also matters. It gives the U.S. additional leverage since American consumers are needed to buy foreign goods to a greater extent than American businesses need foreigners to buy U.S. goods. The U.S. military might also factor in, as many of the countries making deals depend on the U.S. for security. The unpredictability introduced may already be depressing investment and hiring, as investors and firms have no idea what policy will be tomorrow. Similarly, companies that rely heavily on imported parts and components may be unable to survive in the U.S., leading to job loss in import-dependent industries. Already high, U.S. inequality could get worse if care is not taken since low-income families spend more of their income on goods, making them more vulnerable to price increases. There are also major global threats. The bullying that was part of achieving these trade deals could lead to backlash against the U.S. and its brand with real consequences of sustained loss of U.S. leadership and power in all global matters. The unpredictability introduced may depress investment, as investors have no idea what policy will be tomorrow. Domestic political blowback in our trade partners against the U.S. could ultimately create pressure for higher tariffs on imports from the U.S., resulting in a trade war. Variable U.S. tariffs across trade partners — already ranging from 15 to 55 percent — will create trade diversion and administrative costs. Countries could look to other markets and make deals that exclude the U.S., reducing our global leverage. And the list goes on. But if the U.S. government moves on from these trade wins, facilitating a return to predictable policy, and shows more openness to global cooperation in other critical areas, Trump's trade policy could boost U.S. income without major damage to our global standing or global investment. Perhaps this is the hope that has been driving the stock market up. The risks are many and great. But given the (surprisingly) flexible response abroad to date, the policy is not guaranteed to fail as many assumed. One big bullet may have been dodged. .
Gizmodo
a few seconds ago
- Gizmodo
Private Spaceflight Enters the Wild West as Trump Slashes Regulations
President Donald Trump is calling for an ease of regulations for commercial spaceflight and streamlining licensing for rocket launches and reentries. The move highly favors companies like SpaceX but could have negative repercussions on environmental habitats surrounding launchpads. On Wednesday, August 13, Trump signed an executive order intended to bolster the spaceflight industry and increase the overall commercial launch cadence. In it, Trump calls on Transportation Secretary Sean Duffy, who is also currently serving as the acting administrator for NASA, to 'eliminate or expedite…environmental reviews for, and other obstacles to the granting of, launch and reentry licenses and permits.' The order also directs Duffy to 'reevaluate, amend, or rescind' safety requirements and conditions for launch and reentry licenses that were written during Trump's first term as president in 2020. 'By slashing red tape tying up spaceport construction, streamlining launch licenses so they can occur at scale, and creating high-level space positions in government, we can unleash the next wave of innovation,' Duffy said in a statement. 'I look forward to leveraging my dual role at DOT and NASA to make this dream a reality.' The Federal Aviation Administration (FAA) is responsible for granting licenses for space launches and reentries while ensuring public safety and protection of property. For years, SpaceX CEO and founder Elon Musk has expressed dismay over regulatory bodies such as the FAA, complaining that bureaucratic red tape is holding his rocket company back. 'Starships need to fly. The more we fly safely, the faster we learn; the faster we learn, the sooner we realize full and rapid rocket reuse,' SpaceX wrote in a blog last year while awaiting a launch license for Starship's fifth test flight. 'Unfortunately, we continue to be stuck in a reality where it takes longer to do the government paperwork to license a rocket launch than it does to design and build the actual hardware.' On the other hand, local environmental groups in Boca Chica, Texas, the site of SpaceX's Starbase launch facility, have criticized the FAA for regulatory oversight. Starship's inaugural liftoff in April 2023 sent chunks of concrete and metal thousands of feet away from the launchpad, prompting a review of environmental impacts and potential threats to endangered species in the Boca Chica region. Shortly after, conservation groups filed a lawsuit against the FAA for its approval of SpaceX's expanded launch operations in Boca Chica, Texas, without adequate environmental review. The lawsuit claims that the FAA didn't require an in-depth environmental impact statement before approving SpaceX's Starship plans. FAA officials claim that the new order will serve the space economy. 'The FAA strongly supports President Trump's Executive Order to make sure the U.S. leads the growing space economy and continues to lead the world in space transportation and innovation,' FAA Administrator Bryan Bedford said in a statement. 'This order safely removes regulatory barriers so that U.S. companies can dominate commercial space activities.' Environmental experts, on the other hand, disagree. 'This reckless order puts people and wildlife at risk from private companies launching giant rockets that often explode and wreak devastation on surrounding areas,' Jared Margolis, senior attorney for the Center for Biological Diversity, wrote in a statement. 'Bending the knee to powerful corporations by allowing federal agencies to ignore bedrock environmental laws is incredibly dangerous and puts all of us in harm's way.'
