Here's a classic Washington Friday: a Supreme Court ruling, a presidential outburst, a new trade policy, and an economist on social media trying to explain how money actually works. It's like a civics lesson with higher stakes.

Let's start with the economist, because his point is the kind of thing that makes you rethink everything you thought you knew about trade. Peter Schiff took to X to push back on the long-running political claim that foreign nations are ripping off America through trade deficits. "No country has been ripping off America," Schiff wrote. "We rip off the world by exchanging our fiat money for the consumer goods our trading partners produce."

Think about that for a second. His argument is that the U.S., thanks to the dollar's reserve currency status, gets to trade pieces of paper—or digital entries—for actual physical stuff like cars, electronics, and furniture. If that's a rip-off, he suggests, we're the ones doing it. He also issued a warning: if tariffs slow down those imports, Americans might face higher prices at home because that cushion of trading dollars for goods disappears. It's a reminder that the plumbing of global trade is more complicated than the political rhetoric often allows.

That rhetoric was on full display from President Donald Trump, and it was sparked by a legal setback. On Friday, the Supreme Court ruled 6-3 that a law called the International Emergency Economic Powers Act does not give the president the authority to impose tariffs. The majority opinion pointed to Article I of the Constitution, which clearly gives Congress, not the president, the power to levy taxes and duties. It's a separation-of-powers thing.

Trump was not pleased. He said he was "ashamed" of certain members of the Court (while praising the dissenting justices). And then he did what executives often do after a court loss: he found another way. He announced a new 10% global tariff, but this time using Section 122 of the Trade Act of 1974. That provision allows for temporary tariffs of up to 15% for 150 days to address balance-of-payments issues. He also made it clear that the existing national security tariffs under different sections of law remain in effect and hinted that even stronger trade measures could be on the table.

So, we have a new tariff policy born from a court defeat. The timing is interesting because it bumps into some recent economic data. Also on Friday, we learned that U.S. inflation cooled to an annual rate of 2.4% in January. That was actually a bit lower than the 2.5% economists were forecasting and marks the weakest annual inflation rate in nearly two years. On a month-to-month basis, prices rose 0.2%, which also fell short of expectations.

This creates a natural question: will these new tariffs, designed to make foreign goods more expensive, start pushing those inflation numbers back up? It's the kind of policy collision—trade goals versus inflation goals—that keeps economists and market watchers busy. Schiff's warning about losing the "fiat money for goods" cushion is essentially a forecast that the answer might be yes.

In one afternoon, we got a constitutional law lesson, a presidential policy pivot, a fresh debate on the fundamentals of trade, and a new variable thrown into the inflation equation. It's a lot. But at its core, it's a story about how America pays for the stuff it buys from the world, and who gets to make the rules for that process. The Supreme Court said one branch of government does, the President is using a different tool from another branch, and an economist on X is suggesting we reconsider the entire premise of the deal.