Dear Reader,
Good morning.
This is Dylan Jovine with Behind the Markets.
Happy Tuesday.
Today is Tuesday, February 24th.
Those of you who've followed me for a while know I don't react in real time to major policy moves. I prefer to let the dust settle, study the implications, and think through multiple angles before speaking publicly.
Because when something this significant happens, the first wave of commentary is almost always incomplete.
Now we've had enough time to step back and see the bigger picture.
The Supreme Court struck down the administration's tariffs under the International Emergency Economic Powers Act — the IEEPA.
The Court's position was straightforward.
This law was designed to address unusual and extraordinary threats.
Trade imbalances, even serious ones, do not meet that threshold.
And what's important here isn't just the legal ruling.
It's the strategic consequences.
Because tariffs weren't just about collecting revenue.
They were leverage.
They were the negotiating tool behind trade agreements with Europe, China, Japan, and others.
And now that leverage has suddenly disappeared.
Which raises the first question: what replaces that leverage now?
You're already seeing the reaction.
The European Union has suspended implementation of parts of its trade agreement. Their position is simple: if the tariffs that formed the basis of the negotiation no longer exist, the agreement itself has to be reconsidered.
That creates uncertainty.
And closely behind it comes a second question: do the trade agreements negotiated under that leverage still hold?
Uncertainty is poison for the economy.
Companies don't know how to plan.
If you're running a major manufacturer — whether it's Ford, GM, or any global company — you're asking basic questions right now.
Do we build in Mexico?
Do we move production back to the United States?
Do we wait?
Do we invest?
Or do we freeze everything until there's clarity?
That hesitation slows investment.
It slows hiring.
It slows economic momentum.
This is why I've been talking about gold so much recently.
When governments lose control of policy… when rules change mid-game… when global trust starts to fracture… capital doesn't wait. It moves.
That process has already begun.
But it's not over yet.
I spoke about it in yesterday's Diary.
Credible firms are predicting gold can hit $8,000 per ounce!
So for those of you who have asked me -
No. You didn't miss your shot to ride the gold wave.
I don't want to get too off topic here, so I've laid out everything you need to know about gold investing here.
Now the administration's fallback option is to use Section 122 of the Trade Act of 1974 to impose temporary tariffs — initially 10%, possibly 15%.
But here's the problem.
Those tariffs only last 150 days.
Which leads to a third question: is there a durable plan, or only temporary stopgaps?
Beacause that's not a long-term solution.
That's a stopgap.
And markets can see the difference.
When policy lacks permanence, businesses hesitate to make permanent decisions.
This is where strategy matters.
Because the Constitution is very clear: Congress holds the authority over trade.
If you want durable tariffs, you work with Congress.
You write the law.
You build consensus.
And once it becomes law, it has legal durability.
Instead, what we've seen is an attempt to use emergency powers to achieve a structural economic objective.
That approach was always vulnerable to legal challenge.
And now we're seeing the consequences.
From a strategic standpoint, it reminds me of something you see repeatedly in military history.
A commander launches an aggressive offensive without securing his flanks.
Initially, it looks bold.
But without structural support, the position becomes exposed.
That's where we are now.
The initial move created leverage.
But without durable legal backing, that leverage is fragile.
And now, much of that leverage has evaporated.
What concerns me most isn't the politics.
It's the uncertainty.
Markets can handle good news.
Markets can handle bad news.
What markets struggle with is instability.
Right now, companies don't know what the rules will be six months from now.
And ultimately, that brings us to the fourth and most important question: how do businesses make long-term decisions when the policy framework itself is uncertain?
They don't know whether tariffs will exist.
They don't know what trade relationships will look like.
And when businesses don't know the rules, they wait.
They delay investment.
They delay expansion.
They preserve capital.
That slows growth.
We are, in many ways, back to square one.
The administration will likely present the temporary tariffs as a form of progress.
But structurally, the long-term framework is still unclear.
And until there's clarity, uncertainty will continue to weigh on business decisions and economic momentum.
Anyway, that's what's on my mind today.
Have a wonderful day.
I'll see you tomorrow.
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