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Yahoo
26-05-2025
- Business
- Yahoo
Prediction: The Stock Market Will Soar Before the End of 2025 (but It Could be at the Cost of Trump's Tariffs)
There's a clear correlation: Tariffs on, stock market down. Tariffs off, stock market up. At least seven lawsuits have been filed challenging the Trump administration's tariffs. If the federal courts block Trump's tariffs, the stock market will soar. 10 stocks we like better than S&P 500 Index › Do you view the proverbial glass of water as half-full or half-empty? The answer could determine how you think about the stock market's performance this year. If you're an optimist, you'll probably focus on the resurgence of the S&P 500 (SNPINDEX: ^GSPC) in recent weeks. On the other hand, pessimists will likely point out that the S&P 500 appears to be losing momentum, was firmly in correction territory not long ago, and is still down year to date. I'm more interested in where stocks will be than where they've been. And I predict the stock market will soar before the end of 2025. But this big rally could be at the cost of President Trump's tariffs. Look at the following chart that shows the S&P 500's performance so far in 2025. The index started the year on a relatively positive note. It started to decline in late February. In early April, the S&P 500 crashed. However, it soon rebounded. What caused this volatility? Unless you haven't paid attention to the news over the past few months, you can probably immediately answer this question. The S&P 500's swings have been caused by President Trump's tariffs. Each S&P 500 decline this year occurred when investors were concerned about tariffs. The steep sell-off in April came after the president announced his "Liberation Day" tariffs on nearly every country. But when investors' tariff worries waned, the S&P 500 rose. For example, the strong recent rebound was sparked by President Trump's delaying his steep "reciprocal" tariffs by 90 days. There's a clear correlation between tariffs and the S&P 500's performance. Tariffs on, S&P 500 down. Tariffs off, S&P 500 up. My prediction that the stock market will soar before the end of 2025 hinges on my view that the tariff threat will be taken off the table. How could tariffs become a non-issue for stocks with a self-proclaimed "Tariff Man" in the White House? I think the answer could be embedded in the U.S. Constitution's system of checks and balances. The judicial branch could limit what the executive branch does. At least seven lawsuits have been filed challenging Trump's tariffs. Some were initiated by businesses and legal advocacy groups. Others were filed by states, including 12 states that joined forces: Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont. Members of the Blackfeet Nation have also sued the Trump administration over tariffs. Granted, the White House has already won a small victory. Last week, U.S. Judge T. Kent Wetherell II, a Trump appointee, said that the president can unilaterally impose tariffs. He based his decision on a precedent set by a federal customs court in 1971 that allowed President Nixon to briefly levy 10% tariffs on many imports. However, Wetherell transferred the case to the U.S. Court of International Trade in New York, so his take won't ultimately matter. This federal trade court recently heard arguments in another tariff lawsuit, V.O.S. Selections v. Trump. The three-judge panel seemed skeptical about the Trump administration's stance that federal courts shouldn't be able to review the legality of the president's tariffs. One question before the courts is whether the International Emergency Economic Powers Act of 1977 (IEEPA), the federal statute the Trump administration used to justify imposing tariffs, allows the president to levy tariffs at all. The IEEPA doesn't specifically mention tariffs. Another challenge relates to Trump's declaring a national emergency, as required by the IEEPA, based on trade deficits. The IEEPA states that the national emergency declaration must result from an "unusual and extraordinary threat." Oregon Senior Assistant Attorney General Brian Marshall noted before the U.S. Court of International Trade last week that the U.S. has had trade deficits with the rest of the world for the past 49 years. He argued, "This is not an unusual problem." The legal doctrine known as "nondelegation" presents another key hurdle for the White House. This nondelegation doctrine says that Congress can't delegate its powers to other entities without "an intelligent principle" by which the entity to which power is delegated can follow that limits its authority. The U.S. Constitution only permits Congress to levy taxes and tariffs. Perhaps the most significant question related to the administration's tariffs, though, is aptly named the "major questions doctrine." Under this doctrine, Congress must "speak clearly" when it delegates authority to the executive branch in areas of "vast economic and political significance." The IEEPA doesn't clearly give the president the power to impose tariffs. The tariffs imposed by the Trump administration definitely have "vast economic and political significance." I suspect that this could be the hill that the president's tariffs die on when the U.S. Supreme Court inevitably weighs in on the issue. I'll readily admit that I'm not 100% confident in my prediction that the stock market will soar before the end of 2025. I'm not a lawyer, and I'm certainly not a Nostradamus. However, I'm reasonably confident in my prediction. The legal arguments against the administration's tariffs make sense to me. If the courts block Trump's tariffs, the stock market will soar -- maybe even enough to make that proverbial glass of water overflow. 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Yahoo
18-05-2025
- Business
- Yahoo
‘An economic fallacy': Rand Paul doesn't see the benefits of tariffs
Sen. Rand Paul attacked the economic logic of President Donald Trump's aggressive tariff strategy on Sunday — and agreed that the policies raise constitutional concerns. The Kentucky Republican said Trump's sweeping tariffs on foreign trading partners are based on 'an economic fallacy' about trade deficits and objected to the president's move to pursue them without congressional approval during an interview on ABC's 'The Week.' 'Well, tariffs are taxes, and when you put a tax on a business, it's always passed through as a cost. So, there will be higher prices,' Paul said, arguing, as he has in the past, that unfettered global trade is enormously beneficial. 'The only trade that means anything is the individual who buys something. That's the only real trade. And that by very definition, if it's voluntary, is mutually beneficial, or the trade doesn't occur.' When asked about the legality of Trump's tariffs, Paul seemingly sided with a constitutional provision citing Congress's authority over taxation. 'In the past, the court has allowed these things, but I think it'll be an interesting thing because most tariffs in our history have been passed by Congress,' he said. 'We've never had widespread tariffs that have been done by fiat by a president, and I object to that.' Paul is one of a few Republicans who hesitated to rally around Trump's 'Liberation Day' tariffs on foreign trading partners, which the administration rolled out in early April. But Trump ended up backtracking on the high-stakes levies, issuing a 90-day pause on the tariffs for every affected country except China in April. However, after a series of back-and-forth retaliatory measures, China and the U.S. came to a preliminary deal to significantly lower the levies on each other earlier this month. There are several legal challenges brewing against Trump's tariffs. A recent lawsuit led by New York Democratic Attorney General Letitia James and the top prosecutor of 11 other states asserts that the policies have 'upended the constitutional order and brought chaos to the American economy.' Other plaintiffs include members of the Blackfeet Nation in Montana, the New Civil Liberties Alliance in Florida, the Liberty Justice Center in the U.S. Court of International Trade and California Gov. Gavin Newsom. Courts have previously upheld the legality of tariffs when they're based on congressional authority. However, Trump's decision to impose tariffs by himself has raised legal questions about whether he is exceeding his delegated power. 'Now, we do have a long history, though, of both parties abdicating their responsibility on tariffs and granting power to Congress, which brings up another constitutional question, can Congress delegate powers given to it under the Constitution to the president?' Paul said.
Politico
18-05-2025
- Business
- Politico
‘An economic fallacy': Rand Paul doesn't see the benefits of tariffs
Sen. Rand Paul attacked the economic logic of President Donald Trump's aggressive tariff strategy on Sunday — and agreed that the policies raise constitutional concerns. The Kentucky Republican said Trump's sweeping tariffs on foreign trading partners are based on 'an economic fallacy' about trade deficits and objected to the president's move to pursue them without congressional approval during an interview on ABC's 'The Week.' 'Well, tariffs are taxes, and when you put a tax on a business, it's always passed through as a cost. So, there will be higher prices,' Paul said, arguing, as he has in the past, that unfettered global trade is enormously beneficial. 'The only trade that means anything is the individual who buys something. That's the only real trade. And that by very definition, if it's voluntary, is mutually beneficial, or the trade doesn't occur.' When asked about the legality of Trump's tariffs, Paul seemingly sided with a constitutional provision citing Congress's authority over taxation. 'In the past, the court has allowed these things, but I think it'll be an interesting thing because most tariffs in our history have been passed by Congress,' he said. 'We've never had widespread tariffs that have been done by fiat by a president, and I object to that.' Paul is one of a few Republicans who hesitated to rally around Trump's 'Liberation Day' tariffs on foreign trading partners, which the administration rolled out in early April. But Trump ended up backtracking on the high-stakes levies, issuing a 90-day pause on the tariffs for every affected country except China in April. However, after a series of back-and-forth retaliatory measures, China and the U.S. came to a preliminary deal to significantly lower the levies on each other earlier this month. There are several legal challenges brewing against Trump's tariffs. A recent lawsuit led by New York Democratic Attorney General Letitia James and the top prosecutor of 11 other states asserts that the policies have 'upended the constitutional order and brought chaos to the American economy.' Other plaintiffs include members of the Blackfeet Nation in Montana, the New Civil Liberties Alliance in Florida, the Liberty Justice Center in the U.S. Court of International Trade and California Gov. Gavin Newsom. Courts have previously upheld the legality of tariffs when they're based on congressional authority. However, Trump's decision to impose tariffs by himself has raised legal questions about whether he is exceeding his delegated power. 'Now, we do have a long history, though, of both parties abdicating their responsibility on tariffs and granting power to Congress, which brings up another constitutional question, can Congress delegate powers given to it under the Constitution to the president?' Paul said.
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Business Standard
24-04-2025
- Business
- Business Standard
Dozen US states sue Trump administration over tariffs, trade policy
The suit, filed in the US Court of International Trade in Manhattan, argues that Congress didn't grant Trump the necessary authority to impose the tariffs Bloomberg A dozen US states are challenging President Donald Trump's 'immense and ever-changing' global tariffs in court, alleging he illegally bypassed Congress by issuing duties under an emergency economic law. The suit, filed Wednesday in the US Court of International Trade in Manhattan, argues that Congress didn't grant Trump the necessary authority to impose the tariffs and that national trade policy 'now hinges on the president's whims rather than the sound exercise of his lawful authority.' Trump 'has upended the constitutional order and brought chaos to the American economy,' the group, which includes New York, Illinois and Arizona, said in the complaint. A spokesman for the White House criticised Democratic officials who filed the complaint for 'prioritizing a witch hunt against President Trump over protecting the safety and wellbeing of their constituents.' 'The Trump Administration remains committed to using its full legal authority to confront the distinct national emergencies our country is currently facing — both the scourge of illegal migration and fentanyl flows across our border and the exploding annual US goods trade deficit,' White House spokesman Kush Desai said in a statement. The suit follows a handful of others — filed by California, small businesses and members of the Blackfeet Nation tribe in Montana — that all make similar claims. It seeks a court order halting the tariffs, including the worldwide levies Trump paused on April 9. The states allege the tariffs amount to a massive tax on American consumers. 'The president does not have the power to raise taxes on a whim, but that's exactly what President Trump has been doing with these tariffs,' New York Attorney General Letitia James said in a statement. 'Donald Trump promised that he would lower prices and ease the cost of living, but these illegal tariffs will have the exact opposite effect on American families.' The complaint takes aim at Trump's use of the International Emergency Economic Powers Act, which the president invoked for 'the most damaging of his tariffs,' according to the suit. The states argue the law was passed five decades ago to prevent presidents from abusing emergency powers, and that it can only be invoked to respond to an 'unusual and extraordinary threat.' Trade deficits and other issues cited by Trump don't meet that standard, the states allege. 'The statutory requirement of an 'unusual and extraordinary threat' is not met by the president's declaration of emergency accompanying the Worldwide Tariff Order,' the states said in the complaint. 'As the Worldwide Tariff Order acknowledges, 'annual US goods trade deficits' are 'persistent'; thus, by definition, they are not 'unusual and extraordinary.'' The suit comes a day after Trump tuned down his tariff rhetoric against China, the world's second-biggest economy. Global markets are still on edge, however, given how frequently Trump has changed course on the matter. The other states in the suit are Oregon, Colorado, Connecticut, New Mexico, Vermont, Nevada, Delaware, Minnesota and Maine. The case is State of Oregon v. Trump, 1:25-cv-00077, US Court of International Trade (New York).
Yahoo
24-04-2025
- Politics
- Yahoo
Montana Farmers Union seeks to join lawsuit against tariffs on Canada
An aerial view from a drone shows a combine being used to harvest the soybeans. (Photo by Joe Raedle | Getty Images) The Montana Farmers Union on Monday filed a motion to intervene in a lawsuit brought by four Blackfeet Nation tribal members seeking an injunction against the Trump administration's tariffs on Canada. The organization, which has been around since 1912, said that joining the case was a way to continue fighting 'on behalf of family farmers and ranchers.' 'The executive branch has overstepped its constitutional and statutory authority on these tariffs. Montana farmers and ranchers can't afford any more uncertainty or any more financial stressors – especially not random tariffs,' MFU President Walter Schweitzer said in a press release. Plaintiffs State Sen. Susan Webber and Jonathan St. Goddard, both enrolled members of the Blackfeet Nation, originally filed the lawsuit in federal court earlier this month against the U.S. Department of Homeland Security, the United States of America, and Secretary of Homeland Security Kristi Noem, arguing that the tariffs levied by the administration against Canada violates Indigenous treaty rights and exceeds presidential authority. The suit claims the tariffs violate a 1794 treaty exempting tribes along the United States-Canadian border from being taxed or levied on goods between the nation. It also challenges the Trump administration's ability to use emergency powers to bypass Congress to impose tariffs. Trump has declared that the fentanyl drug crisis at America's borders constitute a national emergency, though Customs and Border Patrol have only seized 19 kilograms of fentanyl coming from Canada compared to 9,600 kilograms coming from Mexico. Monday's step to intervene was taking action for Montana family farmers and ranchers who 'are facing dire financial and mental impacts if the tariffs remain in effect,' according to the release. 'MFU's members rely on a predictable and stable trade market and the tariffs imposed by the President not only exceed the President's constitutional and statutory authority, they've 'wallop[ed]' the agricultural community in Montana, as no one can 'plan or prepare,'' the proposed complaint states. 'Because of the President's tariffs, their goods will be more expensive to export, which will result in reduced profits and lost customers. Even worse, farms and ranches that have been in families for generations must be sold simply because the President's isolationist and unlawful approach is incongruous with the international market with which these farmers and ranchers have been dealing and relying upon for decades. MFU's members do not have robust markets in the United States for the crops they grow and those markets cannot be developed overnight,' according to court filings. According to the Office of United States Trade Representative, Montana's largest market is Canada, with $869 million in goods exported to the state's northern neighbor in 2024 — 37% of total exports. The top agricultural exports to Canada in 2024 included $113 million in live cattle; $106 million in dried legumes, $25 million in brewing and distilling dregs, $10.2 million in barley, and $10.1 million in cigarettes, according to Agriculture and Agri-Food Canada. The complaint from MFU mentions several members who have been impacted by the tariffs. One member, John Wicks, a fourth generation farmer from Liberty County, said he was in contractual discussions with a cross-border trading partner for his organic lentils, but was told they could not enter into a contract due to the instability of the trade market before the tariffs were imposed. Specifically, 'if American tariffs were going to be implemented, the partner would not take the crops,' harming Wicks financially, according to court filings 'Our Canadian partners either won't buy our crops or are offering significantly lower prices than our partners in the United States. Our partners in the United States know that our Canadian partners are doing this and are capitalizing on it by offering lower prices, so we're getting squeezed,' Wicks wrote in a declaration of support for MFU's filing. As of Wednesday afternoon, District Court Judge Dana Christensen had not issued a ruling on whether he would allow Montana Farmers Union to intervene. A hearing for the preliminary injunction will be held next Thursday at the Missouri River Federal Courthouse in Great Falls. Attorneys for the federal government have filed a motion to move the case to the Court of International Trade in New York, arguing the District Court doesn't have jurisdiction over tariffs, but attorneys for the plaintiffs responded that case can be rightfully heard at the District Court as the lawsuit is over the constitutionality of executive orders. 'Farmers and ranchers have invested decades in developing reliable markets for our products,' Schweitzer said in the press release. 'Overnight, these random tariffs have destroyed markets that will take decades to rebuild. This is why the authority to impose tariffs resides in Congress because it provides a forum for public debate and input and ensures the benefit outweighs the harm.'
