Let's talk about the Supreme Court decision on tariffs …
The Court didn't reject "tariffs." It rejected Trump's shortcut. The 6-3 vote said the International Emergency Economic Powers Act (IEEPA) isn't a tariff statute — not a taxing power. It did not say the President can't do trade policy.
The overarching message was, use the right statute. And he will.
So, it didn't touch the underlying policy goals of reducing the trade deficit (rebuilding American productive capacity), stopping the flow of drugs into the country, and (related) ending China's economic cold war on the West.
That said, we're nine months away from the midterms and the media is positioning this as the Trump agenda having been kneecapped — that the adults have been validated. And there are many constituencies, domestically and internationally, interested in seeing U.S. Congress split/divide power in November.
In that vein, within 48 hours Christine Lagarde (European Central Bank President) was on Face the Nation (an American political show) speaking directly to Americans, posturing as the stable, orderly, responsible citizen (i.e. Europe) in the world of American chaos. That segment looks political and intended to sway public opinion.
But remember, as we've discussed in these notes, Europe has problems, and they haven't been caused by Trump policies, but exposed by Trump policies.
They have just months to prove to the world that they can self-fund their defense, energy and AI buildout — in a more nationalist-centric world, without triggering a sovereign debt spiral.
If markets believed Trump has been "contained," Europe should have rallied.
Instead, stocks and the euro faded — because the decision didn’t end tariff policy, it just forced the pivot to other tools.
And the euro now heads into the end-of-the-month testing a big trendline that represents the 20% rise of the past year …
