Thought of the Week:
Memorial Day is a time for deep reflection. My father was laid to rest at Arlington National Cemetery, Congress recognizes the holiday with a weeklong recess, and even President Trump slow rolled his schedule for the better part of this week. In fact, by lunchtime Wednesday, it had been 48 hours since the president had stepped in front of a TV camera for a speech or Q&A session—the first time that had happened since Inauguration Day on January 20. But this isn’t a post about the president’s remarkable record of public availability (a total of 111 of his 138 days in office), it’s a post about my appreciation of a SCOA benefit to take up to three paid Volunteer Days off annually. As some of you know, nineteen years ago, I co-founded a non-profit to bring the healing powers of the game of golf to post-9/11 wounded and injured veterans. The program has been wildly successful, beyond anything I could have imagined—8 chapters, 21 locations, and a subsidiary that makes the SMGA available in all 50 states and U.S. territories; to date, we’ve given away nearly $20 million dollars in programming, over 4000 sets of custom-fitted golf clubs, and seen close to 5000 veterans benefit from the game; all of this with a programming to overhead ratio of better than 9/1. This Monday, I will utilize one of those SCOA volunteer days to host a fundraiser that brings in roughly 12% of our annual budget. Use of that single SCOA volunteer day will mean that dozens of additional veterans will also be empowered to improve their lives through the game of golf. Over the years, since I never served, people have asked me why I started the SMGA. Better than I could put into words, this note from a veteran who participated in our very first clinic series, not just conveys what Memorial Day means to him but also provides the answer.
Every year, Memorial Day hits different. The older I get, the more I realize just how much I carry with me—the memories, the faces, the weight of names etched into stone and into my heart. I served in Iraq with some of the greatest and bravest men and women I’ve ever known. Some of them never made it home. Some took their last breath in the desert, under the same sky we used to stare up at between patrols, talking about what we’d do when we got back. We dreamed about the future. They gave theirs up for ours. Memorial Day is heavy. It’s sacred. It’s a promise to never forget the ones who laid it all down. Some I had the honor of knowing. I carry them with me every day. I remember their faces, their laughter, their courage, their sacrifice, and the stories they told to keep the heat and fear at bay. I remember the silence that followed when they were gone. I remember them. I honor them. I carry them with me. I’ll never forget.
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Capstone Sees CIT Ruling Eventually being Upheld on Appeal. In a unanimous opinion, the U.S. Court of International Trade (CIT) found that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose unbounded tariffs, and that the administration exceeded its authority in imposing both reciprocal and fentanyl IEEPA tariffs. The finding strikes down the 10% baseline “reciprocal” tariffs announced on April 2 as well as the “reciprocal” tariffs of between 20% and 50% placed on various trading partners. Those tariffs, which are currently paused, were scheduled to snap back on July 9 if trade deals were not reached by then. The court further nullified the 25% fentanyl IEEPA tariffs on products from Canada and Mexico and the 20% fentanyl IEEPA tariff on products from China. The court issued a permanent injunction against implementation of the IEEPA tariffs, meaning the tariffs are blocked with respect to all importers, not just the plaintiffs in the cases. Although the court also ordered that the IEEPA tariffs collected so far be “vacated,” giving CBP 10 days to implement the ruling, the Trump administration has already won a stay of enforcement—relieving the government of an obligation to issue refunds—pending appeal, which could result in CBP continuing to collect but not liquidate tariffs. While the Justice Department filed an appeal with the U.S. Court of Appeals for the Federal Circuit, which has already issued a stay, the case could eventually proceed to the U.S. Supreme Court. Although the DOJ had argued that an adverse ruling would “kneecap” the president’s efforts to strike new trade deals, what happens now with ongoing bilateral negotiations remains to be seen. Meanwhile, the ruling does not affect other tariffs the administration has or might impose under Section 232 on national security grounds. Analysts believe that CIT’s opinion will eventually be upheld following all appeals Moreover, President Trump maintains a variety of trade authorities that could supplant any final court decision against the IEEPA-based reciprocal tariffs, including Sections 232, 301, 122, and 338.
Eurasia Group Believes Trump’s Approval Rating is Strong Enough to Keep Policy Agenda on Track. After rebounding from their late-April floor, President Trump’s approval ratings appear to have stabilized in the mid-forties. This is relatively strong territory for Trump; it is seven points higher than his approval rating at the same point in his first term, and it is higher than former President Biden’s approval rating over the bulk of his term. The improvement reflects Trump’s stronger political base relative to his first term, with Trump-skeptic Republicans largely having been excised from the GOP. It also reflects how tariffs had largely exited the headlines in recent weeks, compared to the pronounced period of tariff-related uncertainty in March and April. The mid-forties is at or near President Trump’s ceiling for public approval, meaning that his approval rating is more likely to go down than up over the medium term, particularly if he exacerbates tariff fights or if the economy enters recession this year. However, so long as his rating remains above the 40% threshold, he is likely to maintain the political capital necessary to keep the congressional GOP in line and to continue to pursue the administration’s goals on tariffs and immigration.
Observatory Group Sees Trump’s IEEPA Loss as a Speedbump, not a Course Correction. Although the Trump administration lost its case at the U.S. Court of International Trade (CIT) on invoking the International Emergency Economic Powers Act (IEEPA) to levy tariffs, there will be active debate within the White House over shifting the statutory authority for the reciprocal tariffs even before the appeals process is exhausted. Companies should view this decision as a merely a speedbump in the president’s trade agenda, and by no means will it result in a course correction that sees the White House move away from using tariffs to exert leverage on trading partners. The logical solution for President Trump would be to invoke Section 338 of the Tariff Act of 1930, which allows the president, without any specified investigation process, to levy tariffs of up to 50% based on unilateral findings that a trading partner discriminates against the commerce of the U.S., directly or indirectly, in such way as to place the commerce of the U.S. at a disadvantage compared with the commerce of any foreign country. The only constraints on the President being the maximum rate, that tariff collection can only begin 30 days after the “proclamation” authorizing tariffs, and provision of evidence to the International Trade Commission. President Trump has the power to quickly issue a new executive order invoking Section 338 and transfer over all the reciprocal tariff rates (and the 10% universal rate) under this statute. And with more than 30 days until the end of the current “pause” on July 9th, the President would be able to maintain his current timetable for negotiations with major trading partners, as well as the rates that he has already assigned since none were over the 50% maximum allowed under the law. He also would not have to engage with Congress on trade policy—which is his strong preference. However, the White House may refrain from formally invoking Section 338 until after its appeals process is exhausted, so as not to disadvantage its case.
“Inside Baseball”
U.S. Poised to Hold a “Golden Share” in US Steel-Nippon Steel Deal. The federal government is poised to receive a so-called golden share in US Steel as a condition for approving Nippon Steel’s proposed acquisition of the American company. The plan, which would give the government de facto veto rights on certain company decisions, is part of the ongoing talks between authorities and the companies; last Friday, President Trump announced a “partnership” that included $14 billion in new investments, but provided few additional details. Still unclear is the scope of veto powers and what the administration has decided regarding the existing $14.1 billion takeover proposal. The deal put to the Committee on Foreign Investment in the U.S. (CFIUS) and to the President included the original $55-per-share acquisition along with extra investment. The golden share is set to be included as part of a national security agreement, which is typically drawn up to reflect conditional CFIUS approvals. It’s not clear whether the share would amount to an equity stake or simply mitigation powers. This mechanism, which allows the owner to outvote other shareholders in certain circumstances, is a rarity in the U.S., where the government does not typically hold stakes in listed companies. But golden shares have been used elsewhere, including in Italy, Brazil, and the UK—often to preserve state control over key decisions at privatized or strategic companies. While the rhetoric around a ‘golden share’ sounds flashy, what is on the table is a traditional CFIUS arrangement that gives the government approval rights over actions like offshoring or shutting down production lines.
In Other Words
“I support spending cuts. I think the cuts currently in the bill are wimpy and anemic, but I still would support the bill, even with wimpy and anemic cuts, if they weren’t going to explode the debt. The problem is the math doesn’t add up. They’re going to explore the debt,” Sen. Paul (R-KY) on the spending cuts in the reconciliation bill.
Did You Know
The Government is Buying Less Stuff. Due to the work of DOGE, abrupt employee layoffs, and Congressional negotiations related to the reconciliation bill, procurement at federal agencies is down substantially compared to last year. Focusing on civilian agencies alone, procurement is down more than $9 billion year-over-year (May 2024 – May 2025).
Consumer confidence improved in May after five consecutive monthly declines. The improvement was driven largely by consumer expectations that business conditions, employment prospects, and future income have improved over their April lows.
Graph of the Week
The U.S. Court of International Trade (CIT) struck down all tariffs imposed by President Trump under the International Emergency Economy Powers Act (IEEPA); the White House has already appealed, and a stay was granted. The ruling renders null a vast portion of the Trump administration’s tariff policy; however, it leaves current and upcoming Section 232 and 301 tariffs untouched, and it explicitly opens a route to use Sections 122 and/or 338 to authorize tariffs. The administration is expected to explore these options as a stopgap at minimum. In the meantime, the nullification of IEEPA tariffs may remove a source of leverage for the White House in negotiations with trade partners, and while talks will continue, partner countries may be cautious about offering major concessions in the short term.
