The future of many of Donald Trump’s tariffs are up in the air, with the Supreme Court expected to hand down a ruling on the management’s global trade barriers any day now.
But the question of whether a policy is legal or constitutional – which the justices are entertaining now – isn’t the same as whether it’s wise. and as a trade economist, I worry that Trump’s tariffs also pose a threat to “economic democracy” – that is,the process of decision-making that incorporates the viewpoints of everyone affected by the decision.
Founders and economic democracy
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In many ways, the U.S. founders were supporters of economic democracy. That’s why, in the U.S. Constitution, they gave tariff- and tax-making powers exclusively to congress.
And for good reason. Taxes can often represent a flash point between a government and its people. Thus, it was deemed necesary to give this responsibility to the branch most closely tied to rule of, and by, the governed: an elected Congress. Through this arrangement, the legitimacy of tariffs and taxes would be based on voters’ approval – if the people weren’t happy, they could act through the ballot box.
To be fair,the president isn’t powerless over trade: Several times over the past century, Congress has passed laws delegating tariff-making authority to the executive branch on an emergency basis.These laws gave the president more trade power but subject to specific constitutional checks and balances.
The stakes for economic democracy
At issue before the Supreme Court now is Trump’s interpretation of one such emergency measure, the International Emergency Economic Powers Act of 1977.
Back in April 2025, Trump interpreted the law – which gives the president powers to respond to “any unusual and unusual threat” - to allow him to impose tariffs of any amount on products from nearly every country in the world.
Yet the act does not include any checks and balances on the president’s powers to use tariffs and does not even mention tariffs among its remedies. Trump’s unrestrained use of tariffs in this way was unprecedented in any emergency action ever taken by a U.S. president.
Setting aside the constitutional and legal issues, the move raises several concerns for economic democracy.
The first danger is in regards to a conc
Tariffs as a Tax on American Consumers
Tariffs, while presented as trade policy, function as a stealth tax on American consumers, increasing the cost of imported goods and, ultimately, impacting household budgets. These levies generate revenue for the U.S.government but are largely paid for by individuals and businesses within the country.
How Tariffs Increase Costs
Tariffs are taxes imposed by a government on goods and services imported from other countries. While the importer directly pays the tariff to the government, these costs are typically passed on to consumers in the form of higher prices. this happens as businesses seek to maintain thier profit margins.
Such as,when the U.S. imposed tariffs on imported steel and aluminum in 2018,the price of these materials increased for american manufacturers. The Council on Foreign Relations reported that these tariffs led to higher costs for industries like automobile manufacturing and construction, which then raised prices for consumers.
Government Revenue from Tariffs
The U.S. government collects revenue from tariffs, which contributes to federal funding. The amount of revenue generated fluctuates based on the level of tariffs and the volume of imports.
According to the United States International Trade Commission (USITC), tariff revenue collected by the U.S.government totaled $89.2 billion in fiscal year 2023. This revenue is deposited into the U.S. Treasury and can be used to fund various government programs.
The Economic Impact of Tariffs
Economists generally agree that tariffs have a negative impact on overall economic welfare, despite generating government revenue. They distort markets, reduce trade, and can lead to retaliatory tariffs from other countries, escalating trade wars.
A National Bureau of Economic research (NBER) working paper from 2020 found that the tariffs imposed by the Trump administration resulted in a net loss for the U.S. economy, as the costs to consumers and businesses outweighed the revenue collected by the government. the study estimated that these tariffs cost the U.S. economy approximately $8.3 billion annually.
Recent Developments (as of January 18, 2026)
as of january 18, 2026, the Biden administration has maintained many of the tariffs imposed during the previous administration, notably those targeting China. Reuters reported in May 2024 that the administration cited concerns about unfair trade practices and national security as reasons for keeping the tariffs in place. However, there have been ongoing discussions regarding potential adjustments to the tariff structure. Recent reports indicate a continued focus on diversifying supply chains to reduce reliance on China, rather than a broad removal of existing tariffs. Bloomberg reported in November 2025 that the administration is prioritizing strategic investments in domestic manufacturing to counter Chinese competition.
