Peter Schiff: Tariffs Are Unconstitutional, Courts Agree | SchiffGold

On Sunday’s episode of the Peter Schiff Show, Peter walks through a recent appellate court ruling on President Trump’s reciprocal tariffs and ties that legal news to broader themes: political incentives around taxation, the fragility of budget narratives that rely on tariff revenue, the danger of politicizing the Federal Reserve, and why fiat-driven policies make precious metals more relevant. He also takes a swipe at the crypto crowd by showing how Bitcoin fares when priced in gold.

Peter opens by explaining the appellate decision and his early take on the tariffs’ constitutionality, pointing out how surprising dissenters of the court could be:

And Friday, after the markets closed, the ruling came out where the appellate court in a seven to four decision. And I don’t know what those other four dissenters were smoking, but they clearly don’t understand the Constitution. But at least seven of these appellate court justices do at least this aspect of it, which is pretty straightforward. But they supported the lower court, the district court ruling that the tariffs are unconstitutional, which they clearly are. In fact, on the very day that Trump unveiled these reciprocal tariffs, I came on my podcast and I said they were unconstitutional.

He reminds listeners why the founders insisted that taxing power start in the House of Representatives — a built-in restraint meant to check the executive’s appetite for revenue:

They didn’t want the senators and the House elected by the people. We had one House elected by the people. But that is the House of Congress that the founders said that’s where taxes have to start. Because the one thing they knew would piss people off would be taxes. And so they thought that of the members of Congress, the ones least likely to want to raise taxes on the people are the ones that have to face reelection by the people every two years.

Peter then flags the practical consequence if the Supreme Court upholds the appellate ruling: tariff collections would have to be returned, and the administration’s claims about using tariffs to offset deficits would unravel:

Now, of course, if the Supreme Court upholds the appellate court, which it should, then all of the money that the Trump administration collected in tariffs, all of it has to go back. Everybody’s entitled to a refund. So that’s also going to be a big problem because, you know, we’ve somewhat lowered the budget deficits with these tariffs and Trump has been, you know, claiming credit, hey, look, yes, we blew up the budget with the big beautiful bill. But look, we’re getting all this tariff money to offset the bigger deficits that we created with the big beautiful bill. Well, that narrative gets blown up if all the tariff revenue not only stops, but has to be repaid.

Switching gears to monetary matters, Peter uses a gold measurement to make a pointed critique of Bitcoin and the wider crypto narrative. He notes how all the hype hasn’t translated into a real, lasting gain versus gold:

But Bitcoin is still today about 13 percent lower than it was at its peak four years ago if you price it in gold. So despite all the hype, all the Bitcoin ETFs, the Bitcoin Treasury companies, the strategic Bitcoin reserve, America being the Bitcoin capital of the world with the first Bitcoin president, Bitcoin is still lower than it was before any of that stuff happened. So how is that possible? How can all this good news and all this new buying not drive the price higher? Because there’s a lot of people smarter than the people who are buying who have been selling into all the hype.

Peter also warns about the political threat to central bank independence. He explains why Federal Reserve governors have long, staggered terms — a structural feature meant to insulate monetary policy from short-term politics:

The reason they have 14-year terms is precisely because presidents can’t fire them. The whole idea is that it’s apolitical, that they’re above the fray, right? They’re not going to be beholden to politicians because the presidents are elected to four-year terms and these guys are there for 14 years. So it’s to create the independence. And so this is, again, we’re arguing for destroying Fed independence because Trump is saying that the executive should be able to determine on its own if there’s cause to fire somebody.

He ties the tariff fight and attacks on Fed independence to a broader policy trajectory: large budget deficits, a weak dollar, and a political push to keep interest rates low through massive lending and quantitative easing. Peter cautions that this is the most inflationary direction a government can take:

So the only way that we can have lower interest rates in America with soaring deficits and rising inflation and a weak dollar is if the Fed does all the lending. That means massive quantitative easing, and that means runaway inflation. That’s really what the Trump administration is pounding the table that it wants. Even though Donald Trump ran against inflation, Biden inflation was bad, I’m going to wipe out inflation, the policies that he is advocating are the most inflationary policies in US history. This is the reality of the situation.

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