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TO TARIFF OR NOT TO TARIFF….

So apparently, the Don is not bullet proof.

The U.S. Federal Appeals Court recently ruled that most of former President Donald Trump’s global tariffs are illegal, determining he exceeded his legal authority by imposing them under emergency powers statutes. 

The courts issue was that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify broad, sweeping tariffs enacted on numerous countries, including China, Canada, and Mexico. 

The court found that Congress did not grant the president “unbounded” power to impose tariffs via IEEPA, as this authority fundamentally resides with the legislative branch. 

Specifically, the ruling targeted “reciprocal tariffs” announced on April 2, as well as special “trafficking tariffs” related to trade and drug disputes. 

Here is what the courts considered as illegal—the “reciprocal tariffs” and “trafficking tariffs” which affected a wide range of imported goods from dozens of countries, including a 50% levy on India and Brazil, and additional tariffs on China, Canada, and Mexico. 

The tariffs will remain in effect until October 14, 2025, giving the Trump administration time to appeal the decision to the Supreme Court.

If the Supreme Court upholds the ruling, Trump may lose much of his tariff authority, though narrower powers granted by other, older laws (like the 1974 Trade Act), could still be used in limited fashion. 

This ruling shakes up the very foundation of Trump’s trade policy and cripples his ability to negotiate effectively with other countries.

The next stop is the Supreme Court as there is zero doubt the Trump administration will appeal to the higher courts. 

It Trump loses, he kisses his leverage good bye and although the trade deals already made do not completely fall apart, Trump loses his ability to exert pressure. 

There is also a psychological impact. This also places egg square on Trump’s face in terms of a failed trade policy. This also emboldens a hostile trading partner environment as many countries may feel the need to resist any further negotiation.

And then there is fact that the United States would have to pay back billions which would put significant pressure on the treasury. 

There would be a liquidity shock as tens of billions of dollars would have to be refunded, putting more money into the economy potentially causing a spike in inflation putting more demand on supply. 

This may force the Feds to keep interest rates higher for longer, or even raise them, to counteract the inflationary impact, which would send the markets into a tailspin. 

It’s truly a case of a bird in the hand and a bird in the bush. On one hand we have the threat of interest rate uncertainty on the other companies getting an unexpected wind fall after receiving an already generous tax cut. 

One thing is for certain.

The market participants will use this viral moment to shake up Wall Street and create a ton of volatility just in time for the dog days of the summer. 

Traditionally, September and October are the worse months of the year now if you add the uncertainty of this decision this could cause the Feds to hold off on lowering the already highly anticipated rate cut in December. 

Trump has other options like the Trade Act of 1974—its Section 301, to impose tariffs, but this authority is narrower and more structured than the powers offered by the statutes now ruled illegal.

Here is how Section 301 works. Section 301 allows the U.S. Trade Representative (USTR), under the president’s direction, to investigate and respond to “unjustifiable,” “unreasonable,” or “discriminatory” foreign trade practices that burden U.S. commerce.

The USTR must first investigate the foreign country’s practices and try to resolve the dispute with negotiations.

If negotiations fail, the USTR can recommend and impose retaliatory measures, including tariffs, suspending trade agreement concessions, or other restrictions.

The process is transparent, often includes public comment periods, and actions are subject to administrative and sometimes judicial review. The Duration of Tariffs under Section 301 are generally authorized for up to four years, with reviews and possible extensions.

So Trump may be down but he is definitely not out of options. 

The market will surely be watching the developments and trading off of the side that benefits them most.

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NO SUCH THING AS A GOVERNMENT SILENT PARTNER…

Question: Could we see the U.S. government become a full-fledged investor in U.S. equities under the banner of national security?

Secondly, who actually benefits? And since when did the government become a successful stock picker?

The concept of owning Intel may sound like pure logic, as we need to decrease our dependence on foreign companies like Taiwan Semiconductor and Foxconn, but as an investor, investing in a company because the government invested in the corporation makes absolutely no sense.

This is the danger of investing in ideals versus great ideas and fundamentals.

When it comes to technology’s development speeds, you have to be quick and ahead of the curve or risk missing the moment.

While the United States owning a foundry of its own sounds like sound politics from a domestic perspective, it seems more like trying to buy an old Porsche engine from the junkyard, and trying to compete with the landscape of current and advanced prototypes.

To understand this, let’s examine two areas of concern: Intel as a business fundamental and the government as a silent partner to businesses.

I know you are chuckling when u say silent partner because there is nothing silent about Trump—and the fact that the 9.99% investment carries no voting rights definitely opens up the door to manipulative suggestions and the age-old if-then statement—meaning…if you want my money, then this is what has to be done.

Historically, the United States has nationalized companies or industries primarily during times of war, crisis, or economic emergency.

Could Artificial Intelligence carry the same sense of urgency, perhaps, by investing in Intel? Did it go from big to fail, or too old to change?

This is the billion-dollar question?

At its peak, Intel controlled as much as 80% of the data center CPU market, especially during the late 2010s, before meaningful competition from AMD and Arm-based designs emerged. Even as recently as 2022, analysts report Intel still owned approximately 70% of the data center CPU segment.

AMD and ARM designs gained acceptance, and by 2024–2025, AI accelerators grew in importance, and Intel’s data center market share dropped as low as 55%

Intel lost its dominant position in the data center market due to a mix of manufacturing delays, underestimating competitors, and technological inflexibility.

Intel became the old guard when times seemed to be resting on its laurels.

Management was slow to recognize and invest in the rise of GPUs and accelerators for AI in data centers, leaving Nvidia and other competitors dominating this emerging segment.

They made repeated mistakes that destroyed their edge, and they failed to successfully transition to newer manufacturing nodes while their competition was making market improvements—especially the move from 14nm to 10nm and later—left Intel products old and antiquated, and they fell behind competitors like AMD, which leveraged TSMC’s advanced foundries for faster, more power-efficient chips.

Intel’s persistent issues advancing its process nodes gave AMD, which used TSMC’s more advanced foundries, a window to launch much higher-core CPUs at better power efficiency and lower cost-per-performance.

Now here is the part where the fundamentals and pure common sense kick in.

They could not deliver the improvements in the marketplace, and coupled with poor quality, failed mergers, and giant management missteps, how is a new CEO, a government investment, going to right the wrongs?

They have been down this road before.

In total, Intel has had about 9 CEOs since its founding, with 5 CEO changes between 2013 and 2025 alone.

Intel needs a total culture makeover and an entire technology upgrade.

At this point, it’s like spraying perfume on a pile of crap while simultaneously living off the size and dominance of the old reputation.

Their assets are worth more than the current stock price, which makes investors think they are undervalued.

But there is an old saying on Wall Street: some stocks are cheap for a reason. As of mid-2025, Intel’s total assets are valued at about $192.5 billion, based on its latest financial reports for Q2 2025.

In comparison, Intel’s stock market capitalization around the same time is roughly $108.77 billion. Which makes this ripe for a takeover and a total gutting and takeover.

There are pros and cons to this scenario as well. Intel owns valuable assets and manufacturing capacity, including advanced fabs and a large IP portfolio.

The company has strong government backing, including a recent $8.9 billion U.S. government investment, which could provide stability during a transition.

Intel’s scale in CPUs and data center tech could provide strategic value to an acquirer aiming to bolster semiconductor manufacturing in the U.S. It currently trades at a market value below its asset value, possibly providing a bargain entry point.

But the Cons outweigh the pros. Intel has significant operational and structural challenges, manufacturing delays, product execution issues, and shrinking market share against AMD and Nvidia.

Its business depends heavily (around 76%) on international markets like China, so foreign governments may be wary if a U.S. company with government ownership takes control, damaging sales.

The U.S. government’s stake raises regulatory, political, and legal risks. It may deter foreign business partners and complicate future funding and grants.

Intel is undergoing an extensive cost-cutting and restructuring effort, possibly limiting innovation and growth potential in the short term.

The company faces deep competition and would require large ongoing investments ($20+ billion more) to remain competitive in advanced chip manufacturing, which could be a big risk for an acquirer.

In short, the government investment may actually stand in the way of Intel's progress and may also act as a deterrent to any foreign partners who they be able to help fight the wrong.

Ironically, the only company that could possibly take them over is the same company everyone is dependent on (Taiwan Semiconductor). They are the only company with the technological savvy enough to come in and make use of their valuable assets, but then again, this is even a stretch.

Now, whereas the stock as an investment is concerned, I feel it’s uninvestable. There are better places to park your money if you are looking for a parking lot.

The logic is very simple.  As of 2025, Intel is approximately three to five years behind AMD and Nvidia in several key areas, especially in data center CPU and AI accelerator technology.

Nvidia, being the leader, is innovating at a groundbreaking speed—is approximately 2 to 3 years ahead of AMD in GPU and AI accelerator technology.

You don’t have to be a mathematician to understand that even if Intel were all of a sudden to wake and get over its inefficiencies and failed structural processes, and poor leadership, they are at least 5 to 7 years behind the competition.

In a world where Moore's law has been superseded by Jensens’ Law at a pace AMD can’t even keep up with, how is a government entanglement going to make a company better that’s effectively built its own prison.

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Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report