SCOTUS Shuts Down Trump’s Tariffs & TSA PreCheck Pause Causes Confusion

0:00Neal Freyman:Oh, could this vintage store be any cuter? Right? And the best part? They accept Discover. Accept Discover? In a little place like this? I don't think so, Jennifer. Oh, yeah, huh. Discover's accepted where I like to shop. Come on, baby, get with the times. Right, so we shouldn't get the parachute pants? These are making a comeback. I think.

0:23Toby G. Hamilton:Discover is accepted at 99 % of places that take credit cards nationwide. Based on the February 2025 Nielsen Report. Good morning for Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, tariffs have been struck down.

0:38Neal Freyman:So what now? Then, does a green checkmark mean nothing anymore? TSA PreCheck was thrown into chaos. It's Monday, February 23rd. Let's ride.

0:52Toby G. Hamilton:Good Monday morning from my couch in Brooklyn. Yes, it is a home pod since we couldn't make it into the studio on account of the blizzard raging outside. I can't really tell you how bad it is because my window is caked in ice, but it's expected to be one of the biggest snowstorms in years. Along the eastern seaboard, over 40 million people were under blizzard warnings, and places in New Jersey and New York have already received over 12 inches. Some spots in Massachusetts are projected to get over two feet when all is said and done. Travel is, unsurprisingly, not happening. Most mass transit is shut down in the tri-state area, while over 4 ,200 flights have already been canceled, including Toby's back from the Midwest, where he is now, aren't you, Toby?

1:33Neal Freyman:I mean, I miss Florida. I have to say it at this point, because how many more storms of the century can we have in one winter? I was doing some research. What makes a snowstorm a blizzard? And there is an exact definition. It is only if the snow reduces visibility to a quarter mile or less for three hours or longer, and there's sustained winds of 35 miles per hour or greater. That's according to the National Weather Service. And I looked as of this morning, the winds have not exceeded 35 miles an hour. So right now, Neil, you are not under a blizzard warning. So I don't know where all the complaining is coming from.

2:09Neal Freyman:It's just a big snowstorm. Also, if you're looking for something to do other than watch Love is Blind, the Department of Sanitation is offering $19.14 per hour of shoveling plus overtime to be an emergency shoveler. So break out those gloves, Neil.

2:24Toby G. Hamilton:Okay. The Supreme Court has struck down the majority of President Trump's tariffs, but what happens next is more confusing than when your brother tries to teach you a new board game. On Friday, in a 6-3 landmark decision, the Supreme Court justices ruled that Trump exceeded his authority by issuing sweeping global reciprocal tariffs under the International Emergency Economic Powers Act, which does not contain the word tariff. Writing for the majority, Chief Justice John Roberts said, in light of the breadth, history, and constitutional context of that asserted authority, he, the president, must identify clear congressional authorization to exercise it, Roberts wrote.

2:59Toby G. Hamilton:The IEPA law falls short. It is a seismic rebuke of Trump's signature economic policy, one that he aimed to use to boost American manufacturing, raise money for the government, and wield as a geopolitical tool. And he was not happy when the ruling came down. Trump called some of the justices, frankly, a disgrace to our nation and vowed to continue his tariffs by invoking other laws. He did just that hours after the decision, first announcing a 10 percent across the board tariff under a different rule, then on Saturday, jacking that up to 15 percent. As companies and world leaders figure out what this new tariff means for them, there is the one hundred and seventy billion dollar question of refunds.

3:37Toby G. Hamilton:The U.S. government had collected one hundred and seventy billion dollars from the tariffs that were just declared illegal, but the Supreme Court instructed a lower court to figure out if, when, and how any refunds will be delivered to importers that had paid the tariffs. As Justice Brett Kavanaugh wrote, that process is likely to be a mess.

3:53Neal Freyman:I just want to take a quick walk down memory lane here and go through the examples of policy whiplash that we've all been experiencing over the past few months. Liberation Day tariffs were announced with great fanfare. Then they were paused, and they were revised and they were revised again. By the estimation of one New York Times columnist, the effective tariff rate has changed more than 60 times since Trump returned to office. So this is the culmination of a long and winding road that also represents a new road because we have the$170 billion question to answer. That being said, you mentioned that a new tariff rate was already slapped on much of the world.

4:36Neal Freyman:There are a lot of alternative legal pathways that the president is absolutely going to look at. There's section 122, which is what you were mentioning of the Trade Act of 1974 that allows tariffs of up to 15%, but of a duration of only 150 days. There's section 301 tariffs and section 232 tariffs. There will be a quiz on this after the show that allow you to target unfair trade practices. Those are more legally sound, but take longer to carry out. The general vibe here, though, is this fight is not over and in some ways is just beginning.

5:08Toby G. Hamilton:Yeah, you said culmination. I don't know if that's true at all because Section 122, yes, you can impose up to 50 % tariffs for 150 days, but that is probably going to face some court challenges as well because that is on some legal shaky footing. It's supposed to deal with a balance of payments deficits that the U.S. has with the rest of the world, not a trade deficit. The U.S. does not have any balance of payment deficits with the rest of the world because that's just a broader concept of trade. It deals with all economic activity the United States does with the rest of the world. So expect legal challenges there.

5:44Toby G. Hamilton:Let's talk about refunds. Yeah, the U.S. has collected$170 billion through these tariffs that were just struck down. What happens? Well, the Supreme Court just punted the decision. They said, we're not going to deal with this lower court. You figure out how this happens. Kavanaugh called it a mess. And even during oral arguments back in the fall when this was happening, they all the justices said, yes, if we strike this down, it's going to be complete chaos. That doesn't stop companies from trying to get to the front of the line to get tariffs if or to get refunds if they do come down the pipe.

6:16Toby G. Hamilton:Over fifteen hundred companies, including big names like Costco, have already sued to get to the front of the line to make sure they get the refunds when, if, how they should come. But yeah, if there are refunds, we have no idea how they'd be handed out or when.

6:32Neal Freyman:One quirk of those lawsuits that you mentioned, though, you mentioned that Costco has a big retailer, but a lot of other major retailers kind of sat this one out. They were not leaving the charge. I'm thinking of Amazon and a Walmart who essentially decided that it was their best interest to not alienate the president by trying to get in line for these tariff refunds versus actually they're almost willing to eat it in order to stay in a good graces. So that was a quirk that most of the cases that reach the Supreme Court level were brought by smaller companies, smaller importers. So that's just one thing to keep an eye on.

7:06Neal Freyman:The fact, though, that these companies may return some of this money to their balance sheet is what prompted Treasury Secretary Scott is sent to say that a corporate boondoggle may be on the horizon because if, you know, all this money does go back to these companies, that's all gravy, baby. I mean, this is revenue that they did not think that they were going to have. This was money that they thought went out the door. If that does come back, you could see a nice, you know, bump in corporate earnings, especially around some major retailers.

7:34Toby G. Hamilton:And then the final aspect of all this is what happens to all of the trade deals that the Trump administration inked as a result of these tariffs, those are also thrown into uncertainty. The EU already yesterday after the Supreme Court struck down the tariff said, well, we made a we made a agreement with the United States, but right now we're not going to finalize that because we don't have any clarity on what's going on with the United States trade policy. The chairman of the EU's trade committee said pure customs chaos on the part of the U.S. government is just standard practice now. So they are not going to finalize this particular trade agreement.

8:16Toby G. Hamilton:And also in India, officials said for similar reasons that they're postponing talks in the U.S. on finalizing this trade agreement. So going forward, we have a whole new bout of uncertainty due to the Supreme Court rejecting tariffs. Trump's going to try to put 15 percent tariffs on the rest of the world, but all of these agreements and the refunds are still a huge question mark.

8:37Neal Freyman:Moving on, hope you were wearing easy to slip on and off shoes if you were traveling this weekend because TSA was flip-flopping all over the place. The DHS threw travelers for a loop by announcing it would pause TSA pre-check and global entry starting Sunday morning, citing a lapse in funding and the need to refocus personnel on the majority of travelers. But before you could remove your laptop and 3.4 ounce liquids, the decision was reversed with a spokesperson saying, at this time, TSA PreCheck remains operational with the organization monitoring certain airports to see if staffing constraints arise.

9:12Neal Freyman:This, of course, was happening right as a once-in-a-generation winter storm was hitting the East Coast. The ingredients for the worst travel weekend in recent memory were downstream of a partial government shutdown that began on Valentine's Day. Congress was unable to reach a deal on legislation to fund the Department of Homeland Security, which oversees the TSA, which dragged the agency into an unwanted political kerfuffle. Airlines for America, a trade group representing major carriers, said it's deeply concerned that the traveling public will be once again used as a political football amid another government shutdown.

9:46Neal Freyman:Neil, I'm currently stuck in St. Louis, Missouri, and I feel a bit like a football right now. Such a messy weekend.

9:53Toby G. Hamilton:Okay, on a practical level, this makes no sense. If you're trying to get the most bang out of your buck for TSA agents, shutting down pre-check is essentially the complete opposite of what you want to do because it allows for fewer staff to make it work. It disperses the lines where it's just easier to check in people and get them through security. And then we talk about global entry. It's almost all fully automated. So observers looking at this from Democrats to Republicans to the airline industry, the travel industry are we're looking at the TSA decision, especially because it came down at such a last minute and didn't give anybody time to prepare and saying this this makes no sense.

10:32Toby G. Hamilton:And once again, the travel industry feels like, yes, it is a political football. Anytime there is a government shutdown, it feels like TSA agents who we should mention are not being paid right now. They're expected to get their first paycheck a week from Friday or miss their first paycheck a week from Friday. They're not being paid. So the travel industry is sort of complaining and saying, why are we always on the front lines of these political wranglings. And especially when you do something like threaten to shut down pre-check and send airports back into chaos, you know, they are pretty tired of it.

11:05Neal Freyman:They're right. It is definitely a political play because it does make no sense to, you know, expedite travel by canceling the thing that did expedite travel that did was more efficient. I mean, we've been through GSA pre-check lines. It's pretty good. So both sides are trying to pin this travel pane on the other in this instance. It is a big deal to shut down TSA PreCheck though. Remember, this is a program that costs about$75 to$85 a year. It has more than 20 million active members. And according to research, PreCheck members counted for 34 % of passengers screened at airport checkpoints. So this is a wide ranging program.

11:44Neal Freyman:It used to be kind of like a fun thing a couple of years ago where you felt like you were beating the system. Now it's very much a de facto part of traveling. So to shut that down even briefly affected a lot of people.

11:56Toby G. Hamilton:Well, maybe we didn't tell you, teach you anything in the last story, but in this story, maybe you learned that the government is partially shut down because I don't think a lot of people know that at least DHS is not being funded. It's not very clear when, you know, Congress, The two sides are very far apart on this ice spending issue. And what may happen ultimately is that TSA workers, whether PreCheck is open or not, will start calling out of work like they have done during the last couple of shutdowns. That's led to a faster resolution. and the travel industry is saying, please, can we resolve this as fast as possible?

12:33Toby G. Hamilton:Because the shutdown last fall, which was the longest in history, caused losses of$6.1 billion across the travel industry and related sectors. So they are saying, Congress, get your butt back to DC, which might be a little difficult today, but eventually do that and figure out a compromise so we can start paying our workers again.

12:52Neal Freyman:Yeah, you're right. This shutdown is a lot narrower though, because it only is impacting an estimated 13 % of the civilian federal workforce. And again, a lot of those visible effects have been limited because 90 % of DHS employees are deemed essential, so they're going to work anyway. So this is not the government shutdown of months past, but still, it is a partial shutdown.

13:14Toby G. Hamilton:Welcome to Winners of the Weekend, the segment where we pick two things that watched Miracle and got really fired up. I won the pre-show pillow fight, so I get to go first. And my winner is the Olympics. After more than a decade of dwindling relevance, the global sports extravaganza has gotten its mojo back after an epic two weeks in northern Italy, which for a brief moment brought the world and our country together during a tumultuous time. The games wrapped up yesterday with an instantly legendary wrist shot off of Jack Hughes' stick. The American men's hockey team defeated Canada in overtime for their first gold medal since the Miracle on Ice in 1980, and only two days before, the USA women's team also clinched the gold with an OT win over Canada.

13:55Toby G. Hamilton:The Olympics renaissance truly started in Paris two years ago, where the joyful Summer Games posted an 82 % viewership increase over the prior Summer Olympics in Tokyo. And the momentum continued in Milan Cortina, which was on pace to nearly double the TV audience from Beijing four years ago. In Italy, everything seemed to align for the Olympics and NBC, which spent$1 billion to broadcast the games. The scandals were petty and captivating as anything you'd see on Bravo. The star power undeniable. The drama at a fever pitch. And NBC's production innovative and nearly flawless. All this despite the Winter Games featuring obscure, quirky sports that few people watch or participate in outside of the Olympics.

14:34Toby G. Hamilton:Toby, when the full viewership data rolls in, we're going to see some massive numbers. It is full steam ahead for Los Angeles in 2028.

14:42Neal Freyman:I think two things sum up this Olympics. Great vibes and just so, so messy. First, we'll start with the vibes. I think it was encapsulated by the fact that NBC decided not to air commercials during yesterday's USA-Canada hockey final. That was a crazy decision because if you go back to 2002 when the two countries face off for gold in Salt Lake City, 17.1 million viewers. Eight years later, Vancouver, 27.6 million viewers. So that was a lot of revenue that they were potentially sacrificing in order to, you know, bring the best broadcast viewing experience possible. And thank God they did because that game was very fun.

15:20Neal Freyman:But then I also have to talk about the messiness because it was the fun type of messiness, the type that very casual sports fan love getting into. I mean, you likened it to Bravo, and I think that is a perfect analogy. By the way, everyone from the Olympics scandals did great at the Olympics. This comes courtesy of Roger Sherman on X. He pointed this out. He said the Canada curling won gold after Boopgate, where they were touching the stone. The cheating confession biathlete won five medals. That's an underrated art storyline. The credit card fraud biathlete, which we didn't even really touch on, but man, the biathletes were doing something crazy.

16:00Neal Freyman:She won three goals. And then the Norwegian crotch parachute ski jumper won bronze. So Milan-Cortina was messy but thriving.

16:09Toby G. Hamilton:Right. So let's talk about NBC's strategy because over the past few Olympics, they have got this thing down really well to how they're going to broadcast the games. First of all, I just want to say that we're looking at 82 % viewership increase for the summer games in Paris, probably 100 % for the winter games in Italy over the previous Olympics. And I think a lot of that has to do with the fact that there's no COVID anymore and the time zone is much better in for American viewership, at least in Europe than in Asia. So there were some structural factors going into this Olympic viewership increase.

16:45Toby G. Hamilton:But also NBC has just figured out how to put this thing on Peacock. They put all of the live events, every single one of them you can watch either on Peacock or linear TV. So if you are free during the day, you're not working, you can put that up on your second monitor. And at the same time, they have this beautifully produced program that starts at 8 p.m. in primetime where they do the narrative storylines. You learn about stars like Alyssa Liu and all the scandals that you mentioned, which were extremely petty and fun. So they've just kind of figured out how to do this Olympic thing in the streaming era.

17:20Toby G. Hamilton:And they're paying over a billion dollars for this, but they're probably saying this is an incredible investment that we just made.

17:26Neal Freyman:And by the way, Team USA did well too, which brings in more eyeballs. They finished second in the medal table to the powerhouse that is Norway. I did find another interpretation of gold medals at the Olympics, though, that I want to share with you. What if you counted every individual medal given at the Olympics? That means one for each member of a relay team or each member of an ice hockey team. This is from an ex-account called Sickos Community. They did the math. And wouldn't you know it, the United States actually won under this method with 93 total medals. Norway is in second with 58. So when you factor in every single medal hung on every single neck, when it comes to winning hockey, obviously hockey is a massive contributor to that.

18:11Neal Freyman:So if you want to squint, maybe the United States won the medal count. All right, we're going to take a quick break and come back with my winner of the weekend. Neil, I know you don't take investing seriously. You're right. I keep all my money inside my mattress. Don't be like Neil, whose door is almost always unlocked. Be like public.com users who take investing seriously. You can build a multi-asset portfolio of stocks, bonds, options, crypto, and more while accessing industry-leading yields with a suite of fixed income products.

18:44Toby G. Hamilton:And now with our new generated assets, you can turn any idea into an investable index with AI.