(A)Political - May 31st

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Just trying to bring you some substance amidst the noise this week. Let’s jump in!

Trump’s decision to double steel tariffs and threaten broader duties on China sets the stage for tougher trade talks. A Supreme Court stay clears DHS to revoke parole and begin mass removals of Cuban, Haitian, Nicaraguan, and Venezuelan migrants. House Oversight Chair James Comer will start with sworn interviews of former Biden aides about autopen use and cognitive evaluations. Comer signaled he was ’open’ to probing Biden himself depending on how the investigation goes.

• Trump Doubles Down on Tariffs, Continues To Target China

• Supreme Court Greenlights Non-Citizen Deportations From Four Countries

• Rep. Comer ‘Open’ To Bringing Biden In For Congressional Probe On His Mental State

Trump Doubles Down on Tariffs, Continues To Target China

_{By: Atlas}

Speaking to U.S. Steel workers in West Mifflin, Pennsylvania, on 30 May, President Donald Trump announced that all steel imports will face a 50 percent duty—double the 25 percent rate first imposed in his 2018 Section 232 action. He described the higher threshold as a “fence no one can climb,” arguing it will guarantee that the $14 billion U.S. Steel–Nippon Steel investment keeps blast furnaces running at full capacity for the next decade. The proclamation follows a week of litigation turmoil: the Court of International Trade declared Trump’s broader “Liberation Day” tariff regime invalid, only for the Federal Circuit to grant a temporary stay that allows collection to continue while appeals proceed. By hardening a legally unchallenged steel duty, the administration signals that—even if other levies are pared back in court—its flagship measure for a politically sensitive sector will remain intact. Political futures for Trump imposing large tariffs in the first 6 months of his presidency are being priced at a 78% likelihood via Polymarket.

Measured Impact on Federal Receipts

Tariff revenue has surged since Trump reset rates in early April. Treasury’s Daily Statement for 28 May shows “customs and certain excise taxes” hitting an all-time monthly high of $23.28 billion, up 34 percent from April and largely attributable to higher duties on industrial inputs and consumer goods. Fiscal-year-to-date (1 Oct–31 May) receipts total $93.85 billion—already above the $87 billion collected in all of FY 2024. Although still less than three percent of total federal revenue, officials point out that tariffs now rival estate-tax collections and surpass annual federal excise receipts on alcohol and tobacco. Senior trade adviser Peter Navarro projects that, once the across-the-board 10 percent baseline and sector-specific surcharges mature, annual revenue could approach $600 billion; independent forecasts are lower—around $210 billion a year—but all agree the Treasury is capturing more money than at any point since before World War II.

Direct Confrontation with Beijing

Hours before the Pittsburgh rally, Trump fired off a Truth Social post accusing China of “totally violating” a mid-May Geneva understanding that paused triple-digit duties on both sides for ninety days. He asserted that Beijing has “slow-rolled” export licenses for rare-earth minerals that U.S. semiconductor and defense firms need, nullifying the goodwill underpinning the tariff reprieve. Treasury Secretary Scott Bessent confirmed that talks are “a bit stalled” and will likely require another Trump-Xi call. The president’s public rebuke re-establishes a familiar negotiating rhythm: economic relief dangled, then withdrawn when Chinese compliance lags. A U.S. official told Reuters the administration is studying supplemental penalties—potentially reinstating the 145 percent China-only tariff or broadening technology-export controls.

On the Chinese side, Foreign Ministry spokesman Lin Jian accused Washington of overstretching national-security justifications and vowed to “resolutely defend” China’s interests. State media characterized Trump’s 50 percent steel duty as evidence that the United States has abandoned even the appearance of World Trade Organization discipline and is weaponizing market access for geopolitical leverage.

Domestic Economic Calculus

Corporate reaction at home is mixed. Steel-producer shares rallied on news of the higher duty, with Cleveland-Cliffs up 15 percent and Nucor more than 5 percent in after-hours trading. Construction and automotive lobbies, however, warn that inputs already inflated by supply-chain tightness face new upward pressure: the Associated Builders and Contractors estimates the extra 25-percentage-point surcharge could add $900 million annually to U.S. highway and bridge projects. Economists at the Tax Foundation calculate the broader tariff suite will shave 0.3 percentage points off real GDP over ten years if fully implemented, largely through higher capital-goods prices.

Administration officials counter that import displacement will spur on-shoring. Treasury’s Bessent calls tariff revenue a “melting ice cube”—high at first but declining as production returns to the United States and payroll-tax receipts take over. Early evidence is mixed: Commerce Department data show domestic steel output up nine percent year-on-year, yet overall goods-trade deficits remain historically wide, narrowing mainly because tariffs have depressed imports faster than they have boosted exports.

Legal and Legislative Landscape

The Court of International Trade ruling underscored the statutory limits of using emergency powers to levy broad tariffs unrelated to specific national-security findings. While the stay keeps the duties in force, the appellate panel’s questions suggest the eventual decision could pare back the president’s discretion. The administration has signaled fallback options—reviving dormant Section 301 findings or invoking the Commodity Exchange Act—to replace any overturned levies. Regardless of outcome, the White House is lobbying Congress for a “Tariff Modernization Act” that would codify across-the-board reciprocity authority; Democratic leaders say they will evaluate the proposal after reviewing fiscal impacts.

Outlook

By doubling steel tariffs and publicly chastising Beijing, Trump has reasserted tariffs as the centerpiece of his industrial and negotiating strategy. Record customs receipts provide fiscal cover for income-tax cuts in the House’s forthcoming reconciliation bill, but they also expose the administration to criticism that consumers and downstream manufacturers are paying the bill. Whether the gambit compels China to accelerate rare-earth exports—or retaliate with its own measures—remains uncertain. For now, investors and trading partners must navigate an environment where U.S. tariff policy can tighten or loosen overnight, litigation is ongoing, and the revenue meter continues to rise.

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