AGF Investments’ Chief U.S. Policy Strategist Greg Valliere joins Yahoo Finance Live to discuss Supreme Court settlements as President Biden seeks to temporarily lift tariffs on Chinese imports, inflation and oil outlook.
Jared Blikre: All right, moving on and continuing with the latest from DC, our next guest says the Supreme Court’s decision to strike down the Biden administration’s regulations on emissions, this has potentially huge implications for other agencies of regulation. And Greg Valliere, Chief U.S. Policy Strategist at AGF Investments, joins us to discuss it.
And Greg, always nice to see you here. You heard what Kevin was talking about. But here you have some additional information about this latest SCOTUS decision. And I have to ask, have we reached the top of the bureaucracy? And realistically, how much could we expect to pull back?
GREG VALLIERE: I think a little. And great to see you again.
It was an extremely important decision, obviously overshadowed by the decision on abortion. But many people who follow regulatory policy consider this a bombshell. And basically, as you know, what the Supreme Court said was that when it came to environmental rules, you couldn’t just ask the EPA to make that decision. It had to be done with the congress.
And if you apply that standard to other issues, you could talk about the Securities and Exchange Commission with Gary Gensler. You could talk about the Federal Trade Commission. If they try to regulate and people who don’t like regulation sue and it goes all the way to the Supreme Court, the Supreme Court could uphold the rulings in favor of the corporations, a huge ruling.
Jared Blikre: Well let me ask you, we just saw the huge fallout from Roe v Wade’s knockdown. We have a number of state laws that have taken over as a result of that. I’m just wondering, if we were to have another big SCOTUS-level decision regarding regulation, regarding bureaucratic state building, are there any potential fallouts with unknown ramifications that we might see similar?
GREG VALLIERE: I suppose. If you tell the SEC they can’t sue corporate executives on transparency unless they work with Congress, I guess my first opinion would be that they better work with Congress. But yeah, I guess there could be real confusion in the business world if it came to that.
Jared Blikre: And let me shift gears here and go back to something the previous guest, Kevin, was talking about, and that’s the potential dismantling of Chinese tariffs. And I was surprised. I had to think about it. Yes, it’s been four years. It almost feels like a different age because it was so different. But then again here. And what could that bring to economic relief?
GREG VALLIERE: I’d like to say that’s a big deal. But in terms of the impact on inflation, it’s a few tenths of 1%. But when you have an inflation rate of 8%, that’s not a lot. But at the same time, I’m heartened that the United States and China are perhaps coming together a little bit after this acrimony that we’ve had for several years.
We will have to wait and see. But I think it’s going to be one of those split decisions where the president has to do something that the unions like, but he has to do something that Janet Yellen likes. So you’ll get something, but I don’t think it’s going to be a game changer.
Jared Blikre: Well, and you write about another controversy regarding China. That would be the stalled US Innovation and Competition Act. That includes $52 billion for us semiconductor makers to compete with China, but I believe that’s currently locked up in the Senate.
GREG VALLIERE: Yeah. I thought, like most people, that this bill would do it. Chuck Schumer is the big promoter. It would give a huge amount of money to chip makers here in the United States. But suddenly, last week, Mitch McConnell said no, he wouldn’t accept that because the Democrats are trying to fight their way through the remnants of Build Back Better, which includes controlling prescription drug prices. . McConnell says no. And if he says no, we might not even get that bill.
Jared Blikre: And I want to ask you about the price of crude oil and the potential here for any action on the Biden administration because last I heard WTI just slipped below $100 a barrel for the first time in a good time that I see. Is there anything Biden can do ahead of the midterm elections to really drive down the price of oil, or is he just out of bullets?
GREG VALLIERE: He’s barely had any bullets left. I thought his call for a gas tax holiday was a set-up. And it will never pass through Congress. It’s pretty clear. He will go to Saudi Arabia in a few weeks. It might have some impact.
But no, what will bring down the prices of all these raw materials is an economic slowdown. And that’s exactly what we’re seeing in the markets right now.
Jared Blikre: Well, and all of that is potentially a tailwind for Republicans. And now you have President Trump maybe, well, maybe more than maybe running for president in 2024. Lots of armed Republicans here, as you also write. How do you shake this?
GREG VALLIERE: Well, if Trump announces in August, and it’s rumored right now, it would infuriate Republicans who thought they had a clear path to at least take the House on Nov. 8, maybe even the Senate. But if you have Donald Trump stomping on their message, making the election all about Donald Trump, that’s going to really complicate things for Republicans.
They do not want to question the last elections. Republicans want to move forward. And Trump is going to complicate things.
Jared Blikre: And we have to stop there. I always appreciate your visit, Greg Valliere from AGF Investments.