EXCLUSIVE — President Donald Trump’s former Commerce Secretary Wilbur Ross is warning of “tremendous” amounts of “confusion” in the markets if the Supreme Court strikes down Trump’s sweeping tariffs.
Ross, 87, spoke with the Washington Examiner on Wednesday during the Supreme Court’s oral arguments over the legality of Trump’s “Liberation Day” tariffs. Ross, who was tasked with overseeing tariff policy during Trump’s first term, warned that if the high court rules against the tariffs, there would be a notable market reaction.
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“Say, if the Supreme Court ruled against the administration, I think there would be a tremendous amount of confusion in the securities market and in trade,” Ross said.
Ross said that the market reaction would be driven by uncertainty. He said that markets won’t be able to assess what comes next, but many would assume that Trump would try to reimplement the tariffs through other means. But businesses might be twisting in the wind waiting for what’s next.
“So if you’re a business that’s been starting to relocate your supply channels, what do you do? Do you stop? Do you continue? Do you reverse course?” Ross wondered.
During the nearly three-hour-long oral argument, justices heard from Solicitor General John Sauer, who argued that Trump’s tariffs, imposed under the International Emergency Economic Powers Act, are lawful. They also heard from companies and states that have sued the Trump administration over its tariff policies.
During the arguments, Ross said that he didn’t hear a “groundswell of thinking” from the justices that the litigants were on the right track. He predicted that the ruling would be a split decision.
“It’s possible that they would say that a few of the instances of it were too far, and they might do that, knock out a few, but not the whole thing,” Ross said. “I would be very surprised if they knocked out the whole thing.”
Trump and his administration have argued that striking down his tariffs would be detrimental to the economy. Ross said that he thinks the Supreme Court is keeping this in mind as it examines the case.
“I think the court probably has the discretion to go either way, depending on which nuance they buy,” he said. “But given the tremendous chaos that would come from a negative ruling, I would be very surprised if you got a majority of the court to agree with that.”
Ross also pointed out that, on the tariff front, Trump has gotten less resistance from lawmakers than in his first term in office, when tariffs were even more limited.
Before Trump’s ascendence, Republicans generally did not support tariffs. Trump faced blowback from the congressional GOP during his first term after imposing sweeping tariffs. Now, though, congressional Republicans have become far more willing to see tariffs imposed largely because of Trump moving the party in a more populist and protectionist direction.
Many of the most prominent free-market lawmakers who were the harshest critics of tariffs have also since retired or are no longer as enmeshed in the public policy or political world.
For example, former Sen. Pat Toomey (R-PA), a top free-trader, has since retired. Similarly, other tariff opponents, such as House Speaker Paul Ryan (R-WI) and Sen. Jeff Flake (R-AZ), have also expressed their concerns.
“He is more powerful now than he was then,” Ross said of Trump. “You notice Congress hasn’t demanded hearings or anything about these, and so he is in a much stronger political position than he had been before.”
“And I think he felt, rightly, that to get this done once and for all, he had to move swiftly and be all-encompassing,” Ross added.
He said that the tariff rollout this time around, and the strategy of being “all-encompassing,” is important, as they learned during Trump’s first term with steel and aluminum tariffs that if a particular country is targeted, producers will engage in transshipment to circumvent the tariffs.
“They’ll ship things to Vietnam or Mexico or some other low-cost country, do a tiny bit of finishing, and thereby evade the tariff,” the former Commerce chief said. “You really have to put the tariff on a broad basis in order to have it be effective, even if your main target is really China.”
Ross said that in Trump 1.0, it was not so clear how far executive power could go with certain tariffs that were imposed. He said that with those earlier tariffs, Trump was “testing” how far he could go, knowing they would likely be appealed to the Supreme Court.
Among the biggest differences in trade policy between Trump’s first term and his second is how the administration has essentially done away with the process used tens of thousands of times to obtain exclusions from the tariffs.
During Trump’s first term, companies could file forms with the U.S. Department of Commerce or the Office of the U.S. Trade Representative to seek tariff exclusions. Those exclusions would allow certain products to be exempt.
That process generated tens of thousands of applications and approvals. While cumbersome, it was a formal way for people to seek tariff relief. But this time around, that has been scrapped altogether, and Trump is largely the arbiter of major exemptions or exclusions.
TARIFF EXCLUSION PROCESS IN TRUMP 2.0 A BIG DEPARTURE FROM FIRST TERM
Ross defended the exclusion and exemption process during his tenure at the Department of Commerce. Ross said he thought it was “necessary to have a clear mechanism for resolving disputes if we could,” and isn’t sure why the administration hasn’t set up a similar process this time around.
“That is a philosophical difference between what we did and the present, and you’d have to ask the present administration why they did that,” Ross told the Washington Examiner.