The recent Supreme Court decision declaring the federal government’s tariff policy illegal is welcomed by the majority of Americans, as well as the rest of the world.
A few days before the announcement of this decision by the country’s highest court, the Federal Reserve published a report stating that it costs an average of $1,326 more per family to live in the United States this year. No candidate would have been elected president if they had announced such an increase. This is the largest tax increase (since that is what it amounts to in reality) since 1993.
Florida has had its share of inflation, which has been among the highest in the country in recent years, and voters are particularly sensitive to the impact of tariffs on their finances.
Impact on Florida
The news was received with moderate relief, as there are other legal avenues for the government to impose its tariff policy, despite the damage it causes to the economy across the country.
In Florida alone, revenue losses have been estimated at nearly $8 billion for the first year, job losses at nearly 30,000, and an increase in the cost of living per family of more than $1,000 ($1,400 according to FSU, Florida State University). In short, the federal tariff policy of the past 12 months has had inflationary effects and put pressure on employment and incomes in Florida.
Across the country
The same thing has happened everywhere at the national level. Some have even been forced to close their businesses. This is the case for Jennifer Bergman, who ran a toy store opened by her mother 44 years ago, West Side Kids, which was an institution in the New York neighborhood. Her business was already weakened by online sales and then by COVID, and the increase in the cost of her supplies due to customs tariffs was the last straw that led to the closure.
In fact, about 90% of the cost of customs tariffs is borne by American buyers and businesses, as this cost is always borne primarily by the country that imposes it.
According to Fed surveys, the majority of businesses consulted prior to the Supreme Court’s decision continued to anticipate higher prices for customers and lower demand, putting the most vulnerable businesses at risk.
The Supreme Court’s decision will reduce pressure on the economy because, although there are other ways for the president to continue his tariff policy, it will be more complicated for him, and his threats will no longer have the same effect.
Conclusion
This indirect tax, in the form of tariffs, weighs heavily on low-income households that have no budgetary leeway. By restoring purchasing power and stabilizing supply chains, this court decision will help support growth and restore confidence among Florida’s economic actors.
