As Congress undertakes the annual task of drafting the National Defense Authorization Act, the United States Footwear Manufacturers Association (USFMA) is using the occasion to push for a protectionist measure that would shield the organization from competition at the expense of US servicemembers. Called the Better Outfitting Our Troops (BOOTS) Act, the legislation would forbid members of the armed forces from wearing so-called “optional” combat boots—footwear not standard-issued by the military but still authorized for wear as part of the uniform—that are made overseas.

In short, the measure would deny servicemembers the ability to find boots that best fit their feet so US manufacturers can make a few extra bucks. And if anyone thinks this assessment is overly harsh, that’s pretty much how the armed forces themselves see it. As a Marine Corps representative recently stated at the Modern Day Marine military equipment and technology expo, the military is facing a “legislative battle pushed forward by an aggressive lobby that has shown its willingness to put profits ahead of the warfighter.”

The alarm over the BOOTS Act is easy to understand. Last year, the Marine Corps found quality problems so severe that nearly 25 percent of inspected US-made boots were returned to manufacturers.

For US servicemembers, few pieces of equipment are more critical than a good pair of boots. As retired Marine Corps Master Sergeant Michael MacKay, a Marine Corps special operations veteran with eight overseas deployments, told me last year, “If your feet are torn up and you’re halfway through a mission, you’re slower, more vulnerable to infection, and a liability. Why would we even consider taking away that kind of footwear flexibility, especially when the commercial market is willing and able to provide it?”

Kyle S. Reyes, a recent attendee at Modern Day Marine, relayed a conversation to me that he had with a Marine who had recently returned from a training exercise in Norway. The Marine spoke about firsthand experience with boot failures and described the problem with cold-weather boots failing in the field as “rampant.” The solution? Norwegian-made boots. It may not be optimal for US bootmakers, but American servicemembers no doubt prefer to avoid frostbite and stay on mission. 

Reyes also spoke with multiple operators at SOF Week, noting that one 20-year special forces veteran admitted he had never worn a US-made boot while on mission. “The quality, comfort, and performance is just not there,” he said.

To make their case, BOOTS Act supporters cite Chinese-made boots as a supply chain vulnerability. But a couple of items bear mentioning here. First, the BOOTS Act does not take aim at China but at all foreign-made boots. Second, and perhaps more importantly, the bill’s own text undermines this argument. The USFMA says the BOOTS Act includes narrow operational exemptions for combat-deployed personnel where mission requirements require a foreign-made boot. But if foreign boots were a genuine wartime threat, a waiver for the troops most likely to be in combat would be a strange way to address it. 

Furthermore, the protectionist Berry Amendment already ensures that all issued boots are domestically made. The BOOTS Act is simply about boots that servicemembers choose to buy with their own money or clothing allowance because they fit and perform better than what they’re issued.

More importantly, the armed forces themselves view boots produced by US allies as an asset, not a vulnerability. Although 100 percent domestic manufacturing may seem strategically sound, Marine Corps Colonel Paul Gillikin, program manager for Combat Support Systems, says that wargaming (including in the First Island Chain, a clear China scenario) has shown the need for suppliers from both domestic and allied sources.

Gillikin also points out that competition helps drive innovation. His verdict is clear: “We need to keep all options on the table—competition directly supports operational effectiveness and readiness.” 

It’s worth asking what forbidding foreign boots would do to that dynamic, particularly given that American bootmakers already struggle to keep a quarter of their product off the reject pile. Instead of devoting resources to lobbying, maybe they should figure out how to make a better boot.

In its latest move to keep tariff dollars illegally taken from American importers, the Trump administration announced on May 29 that it will appeal a court order to refund all importers the $166 billion it collected pursuant to the International Emergency Economic Powers Act (IEEPA) tariffs struck down by the Supreme Court earlier this year.

In ruling the IEEPA tariffs illegal, the Court left unmentioned the status of refunds for importers who had already paid the duties. On remand, and after more than 2,500 importers filed suits for refunds, Judge Richard Eaton from the Court of International Trade (CIT) issued a universal injunction, ordering US Customs and Border Protection (CBP) to refund all importers who had paid the tariffs. CBP responded that it did not have adequate systems in place to process the volume of refunds implicated by his order, but also assured the CIT that it was developing such a system. After being granted additional time by Judge Eaton to deploy it, CBP unveiled the “CAPE” tool in late March and began processing refund requests on April 20.

CAPE’s rapid deployment deserves credit, but the tool contains significant structural gaps in its current state. CAPE can process refunds of IEEPA tariffs only for entries that have been liquidated for no more than 80 days or that remain unliquidated. According to CBP, this covers about 63 percent of IEEPA-tariffed entries. In its latest progress report, filed before the CIT on May 26, the agency announced that $85 billion in refunds “have been accepted for processing in CAPE,” of which $20.6 billion have been approved for disbursement. While this progress is welcome, CBP has not yet announced a timeline for processing the remaining 37 percent of IEEPA-tariffed entries in CAPE. 

This foot-dragging prompted Judge Eaton to order on May 29 that CBP Commissioner Rodney Scott testify regarding the government’s intent to issue these refunds. CBP responded by announcing the government would appeal the universal injunction. Clearly, the government is not eager to give up this revenue.

CBP’s appeal would seek to limit refunds for entries liquidated for more than 80 days only to those importers that file suit at the CIT and obtain a refund order. As noted, more than 2,500 suits have been filed at the CIT. A verdict on appeal that Eaton’s universal injunction is invalid would thus burden the CIT with this caseload, and individual importers would need to go to court to access their refunds. More importantly, importers that have not yet filed suit—including small businesses that do not have the resources for protracted litigation (which, according to Judge Eaton, account for most of the entries not currently eligible for CAPE processing)—would face the question of whether to incur these costs or simply forgo the possibility of getting their money back. 

It is also not clear at this point whether the appeal would compromise refunds for importers whose entries are currently being processed or are eligible for processing by CAPE, but it could delay their distribution.

Whatever the legal merits of the CIT’s universal injunction, the fact remains that the government took billions of dollars from American businesses through an illegal tariff regime. Holding on to this money by using procedural hurdles to deny importers their legally owed refunds should not be allowed. Courts allowed the administration to keep collecting these duties after assurances that the government would issue refunds if the tariffs were struck down. They should now hold them accountable for doing so.

There is a legitimate case for reducing American dependence on Chinese rare-earth minerals and processing. China controls more than 90 percent of the downstream value chain for rare-earth processing and magnet production—a chokehold it demonstrated in 2025 when it imposed a near-total embargo on exports of seven critical elements in retaliation for US tariff policy, disrupting automotive and defense supply chains almost immediately. The International Energy Agency projects that by 2040, global demand for these materials will grow by more than 60 percent. The vulnerability is real. The question is whether the Trump administration’s response is driven by economic and security concerns or by something else. 

The Vulcan Elements situation suggests the latter. 

Founded by a Harvard Business School student, Vulcan is a three-year-old start-up planning to build what would be the largest rare-earth magnet factory outside China, in Johnston County, North Carolina. In August 2025, 1789 Capital—the venture fund where Donald Trump Jr. is a partner—took an undisclosed stake in Vulcan as part of a $65 million Series A funding round. At the time of the investment, Vulcan was valued at roughly $200 million. Three months later, the federal government committed $670 million to the company, including $50 million from the CHIPS and Science Act plus a $620 million conditional loan from the Pentagon’s Office of Strategic Capital with warrants. By January 2026, investors were reportedly eyeing a valuation of nearly $2 billion, according to recent Bloomberg reporting—a 10-fold increase in five months underwritten by taxpayers for a start-up in which the president’s son holds a stake. 

Officials from the White House, Vulcan, and 1789 Capital all denied any impropriety. For its part, the Pentagon stated that “outside affiliations, investors, or political connections play absolutely no role in the Department’s funding decisions.” 

Until this week, there was no hard evidence suggesting political interference. Although Democrats on the House Natural Resources Committee moved to subpoena Trump Jr. to testify about the deal, the Republican majority refused. Likewise, a group of Democratic senators has demanded answers from the Pentagon about the Vulcan deal to no avail. Now we are starting to learn more about the events that transpired—and they raise very serious concerns. 

Based on interviews and Defense Department records, ProPublica reported today that the push to fund Vulcan came directly from Peter Navarro, President Trump’s senior counselor for trade and manufacturing and a close friend of Trump Jr. Of the many companies competing for Pentagon loans at the time, Vulcan was the only one whose deal was set in motion by a direct request from a senior White House official—an arrangement that defense officials said was without precedent in the office’s review process. Indeed, according to ProPublica, the Pentagon’s Office of Strategic Capital typically spends months vetting companies before committing public funds, but in this instance, Pentagon staff were directed to close the Vulcan deal in a matter of weeks, reportedly working late nights to get it done. “The call came from the White House: We have to get this done,” one defense official told ProPublica. 

The office’s new leadership—former Wall Street executives recruited partly through a headhunter whose leaked presentation promised them access to “royal families and foreign sovereign contacts” if they ever wanted to raise their own fund—has been selecting companies through personal networks rather than formal applications. This is the first Pentagon contract directly linked to White House intervention on behalf of a Trump family–connected company, but it may not be the last. ProPublica also reports that Trump Jr. is on the advisory board of and holds millions of dollars worth of shares in a Florida-based drone parts manufacturer, Unusual Machines, which is currently under review for a Pentagon loan of its own. 

China’s rare-earth chokehold poses genuine strategic and economic problems—one serious enough to briefly shutter American auto plants and rattle defense procurement officials when Beijing moved to restrict exports in 2025. A supply chain concentrated in the hands of a single foreign country willing to use it as a lever in trade disputes demands a serious and credible policy response. What the Vulcan situation describes is the opposite and implies a larger inherent flaw with industrial policy: A $670 million government commitment, including the largest Pentagon loan of its kind, pushed through in weeks at the direction of a White House official with a personal relationship to the president’s son, whose venture fund had taken a stake in the recipient company three months earlier. 

Whether or not the sequence of events proves anything unlawful, or mere coincidence, it is exactly the kind of arrangement that erodes public confidence and raises a straightforward question that has so far gone unanswered: If the administration is serious about reducing American dependence on Chinese rare-earth supply chains, why does its industrial policy find a way to personally benefit the president’s family? Perhaps it’s a coincidence, but the public has a right to know more.

The US government has appealed the Court of International Trade’s May 7 ruling that the 10 percent across-the-board tariffs proclaimed by President Trump under Section 122 of the Trade Act of 1974 are illegal. For reasons we explain in a Cato Briefing Paper released today, this appeal should not succeed in higher courts. More importantly, the president’s justification for invoking this statute—that the deficit in the US trade balance and, more broadly, the US current account amount to “large and serious balance-of-payments [BoP] deficits”—should spur Congress to reform it and thereby reclaim its constitutional authority over tariffs and trade policy. 

Section 122 was designed to address a problem that largely arose from the conditions of the Bretton Woods system of fixed exchange rates that existed at the time of the statute’s conception and enactment. As we explain in our new paper: 

Under Bretton Woods, the dollar was pegged to gold at $35 per ounce and other major currencies were pegged to the dollar. The United States bore the obligation of standing ready to convert dollars into gold on demand from foreign central banks. A “balance-of-payments deficit” had a precise—and alarming—meaning under the system: Foreign banks were accumulating more dollars than they wished to hold voluntarily and could demand gold in exchange, draining US reserves.

Although the US dollar and other major currencies began to float in 1973, the Bretton Woods system officially ended in 1976–1978. The “classic” BoP problem, therefore, ceased to exist soon after the enactment of Section 122.

Fast-forward 50 years—an interval during which no president invoked Section 122, notwithstanding the growing US trade and current account deficits—and President Trump resorted to the statute in the wake of the Supreme Court’s February 20 ruling invalidating his previous tariffs under the International Emergency Economic Powers Act. But as Section 122’s architecture and legislative history reveal, Congress never intended for the statute to be used as a tool to address mere trade or current account deficits.

Viewed holistically, there is no evidence that the US is experiencing “large and serious” BoP deficits. While the US current account deficit has grown over time, the US investment (i.e., financial account) surplus has also grown, and it continues to offset the deficit in the current account:

The dollar’s reserve currency status means foreign investors willingly hold dollar-denominated assets, providing financial inflows that offset the current account deficit. When investment inflows are included, the US registered a BoP surplus of approximately $96 billion in 2025 (Figure 1). 

If courts accept the president’s strained reading of the statute, Section 122 would become a general-purpose mechanism to impose temporary across-the-board tariffs at almost any time. The BoP is an accounting identity that nets to zero, so there will always be components in deficit that Trump, or any future president, could point to and impose tariffs under the statute.

Courts have done their job so far in stopping the president’s attempts to encroach upon Congress’s constitutional authority to impose tariffs and regulate trade. But the onus is on Congress to reclaim this authority wholesale by reforming statutes like Section 122, through which Congress has delegated significant tariff-setting powers to the executive branch. As we conclude in the paper:

US trade policy in 2026 should not be dictated by statutes designed to address problems that arose under conditions from a bygone era, especially if those statutes only contain limited guardrails against executive branch abuse.

Read the full brief here.

Since the Trump administration waived the Jones Act on March 17 for energy products, fertilizer, and related inputs, the US Maritime Administration has been publishing voyage-level data on every domestic cargo movement that has utilized the 1920 law’s suspension. We’ve turned that data into an interactive infographic that lets readers explore all 45 voyages completed thus far, including the vessels involved, cargo carried, and ports visited.

The map offers a glimpse of what US shipping might look like without the Jones Act. First, it shows that there is latent demand that the existing Jones Act-compliant fleet was not meeting. Americans wanted to move more goods within the US but couldn’t because there weren’t enough qualified vessels. With the Jones Act tanker fleet reportedly fully employed, this is not a case of foreign vessels replacing American ships but rather supplementing them. 

It’s all further confirmation that the law has been suppressing intra-US trade. But that’s just from a higher level. Some of the granular data produced by the waiver provides arguably even more noteworthy insights.

The Gulf-to-West Coast Fuel Trade Springs to Life

Perhaps the most striking finding involves fuel movements from PADD 3 — the Gulf Coast refining region — to PADD 5, which encompasses the West Coast, Hawaii, and Alaska. In the waiver’s first 50 days, foreign-flagged tankers transported approximately 1.59 million barrels of non-renewable diesel petroleum products from the Gulf Coast to the West Coast. That’s approximately four times more than in all of last year, when roughly 401,000 barrels moved by water for those same categories. The waiver didn’t create demand for those shipments but simply made visible demand that had long been suppressed.

Notably, there was also a voyage in the other direction, transporting naphtha from California to Texas. For context, the amount of fuel moved by water from the West Coast to the Gulf Coast last year was zero.

Puerto Rico Finally Gets Access to U.S. Propane

Arguably more notable than the three product tankers, however, was the arrival of propane in Puerto Rico. Although the United States is one of the world’s leading exporters of propane, shipping bulk quantities to Puerto Rico had previously been impossible, as there are no liquefied petroleum gas (LPG) tankers in the Jones Act fleet to transport it. Barred from US propane, Puerto Rico had to turn to more distant sources, such as Chile. 

Granted access to the global fleet of such vessels through the waiver, this particular Jones Act blockade on Puerto Rico has effectively been breached. Earlier this month, two LPG tankers transported propane from Houston to San Juan and Tallaboa, Puerto Rico. Those deliveries saw more propane transported to Puerto Rico from the US mainland than in the previous six years combined. Unfortunately, the self-imposed embargo will resume once the waiver expires.

Additional Evidence from the Waiver Data

• The use of LPG tankers under the waiver hasn’t been limited to propane. The waiver data also show that three voyages so far have carried anhydrous ammonia, which is both a fertilizer itself and a key ingredient in making other fertilizers. That’s a boon to American farmers.
• California has emerged as the biggest beneficiary of the Jones Act waiver. In addition to eight cargoes transported to the state from the Gulf Coast, there have also been another eight intra-California voyages and five more to California from refineries in the Pacific Northwest. In total, California-related movements account for 21 of the 45 voyages completed so far.
• One notable shipment was the transportation of crude oil from the Bakken formation to Pennsylvania via a port in Texas. In an earnings call, Phillips 66 explicitly cited this as an example of using domestic oil to replace imported supply. Which should come as no surprise. In 2017, the CEO of a Jones Act tanker company admitted that if the law didn’t exist, “there probably would be more movements of crude oil from Texas to Philadelphia.” The waiver just made plain what has been obvious all along.

Why Each Voyage Is an Economic Gain

Let’s be clear about what each voyage under the Jones Act waiver represents. With the Jones Act tanker fleet fully employed, the counterfactual for each waiver voyage is not a Jones Act-compliant vessel making the same trip, but either a higher-cost import from abroad or no shipment at all. Without the waiver, needed goods would either have to be less efficiently sourced from abroad or Americans would have to go without. 

Importantly, the 45 voyages completed so far may actually understate the latent demand the waiver has exposed. As Chevron spokesman Ross Allen told the Wall Street Journal, “vessel availability and location have limited the relief the Jones Act waiver has been able to provide so far.” In other words, companies would have utilized the waiver even more but couldn’t find enough suitable vessels in the current challenging shipping environment. The 45 voyages are not the sum total of demand but a ceiling imposed by the constraints of this particular window.

Waiver Data Undermines the Case for the Jones Act

If the Jones Act were anything other than a drag on the US economy, the waiver would have gone unused. Instead, in just over 50 days, it has generated 45 voyages spanning more than 30 ports, involving 35 vessels not present in the Jones Act fleet, and carrying over a dozen different cargo types. Unmet demand has been illuminated, and dormant supply chains brought to life. The voyages represent American products reaching American customers that the law had previously made impossible or economically unviable.

And with this waiver covering only energy products and fertilizer, it offers a mere peek into what domestic maritime commerce might look like without the Jones Act in place at all. But what it has exposed is already striking, with every voyage evidence of foregone economic activity. Every LPG tanker calling at a Puerto Rican port is a reminder of what the island has been denied, and every barrel of Gulf Coast fuel reaching the West Coast is a transaction the market wanted but that the law previously prevented.

For an administration committed to “America First” economics, the early results clearly show that the law is not protecting American commerce but blocking it. No wonder the Jones Act’s supporters are so adamant that the waiver go away.

Editorial note:This blog post has been updated since its original publication, removing language and a chart regarding product tanker arrivals in Puerto Rico, and replacing them with the chart regarding propane delivery volumes.

On May 7, the US Court of International Trade (CIT) struck down the Trump administration’s 10 percent across-the-board import tariff imposed under Section 122 of the Trade Act of 1974. Just as with the president’s International Emergency Economic Powers Act (IEEPA) tariffs struck down by the US Supreme Court earlier this year, the CIT’s latest ruling is another sign that the judiciary won’t accept tenuous legal and economic theories regarding congressionally delegated tariff authorities. The decision represents another important step toward restoring the rule of law and constitutional balance in setting US trade policy—even if, as it stands, its actual impact is relatively limited. 

What the Court Decided 

The administration argued that a series of negative international trade- and investment-related indicators—the trade deficit, the broader current account deficit, and a declining US net international investment position—taken altogether amounted to “large and serious balance-of-payments deficits,” justifying tariffs under Section 122. The court disagreed. 

Relying on the language and legislative history of the statute and the broader historical context in which Congress passed it, the majority opinion ruled that a “balance-of-payments” (BoP) deficit had a precise meaning, namely, deficits measured by specific, established methodologies: 1) liquidity, 2) official settlements, and 3) basic balance. These measures were highly relevant in a world of fixed exchange rates, which ceased to exist shortly after the Trade Act of 1974 was enacted. The Bureau of Economic Analysis, in fact, no longer reports these measures. More importantly, the court held that a deficit in particular components (e.g., the current account) or sub-components (e.g., the trade balance) of the BoP does not constitute a BoP deficit under Section 122, as the government argued.

The implications of this reasoning are significant: had the government’s position prevailed, it would have meant that it could impose tariffs under Section 122 at any time, as our colleague Kyle Handley recently observed. The BoP is an accounting identity that should always net to zero, so under the government’s interpretation, it could always point to a negative component or sub-component and argue it constitutes a BoP deficit warranting tariffs as a remedial measure.

Fortunately, sound economic and legal reasoning prevailed.

How Significant Is the Ruling? 

Though the court rightly curtailed the executive’s abuse of Section 122, the relief it provides to importers currently paying the tariffs is relatively limited. The court declined to grant a nationwide injunction barring the government from continuing to collect the tariffs. Instead, it granted injunctive relief only to the companies that filed suit and the state of Washington, as they were the only plaintiffs who could establish direct standing. In other words, the government can continue to collect duties from all other importers.

More importantly, the Section 122 tariffs were intended to serve as a temporary bridge between the administration’s illegal IEEPA tariffs and additional tariffs imposed pursuant to other executive authorities, including Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. Again, the court’s check on executive abuse of a long-forgotten statute is important, but we are far from seeing the last of the administration’s discretionary tariffs. 

The Bigger Picture: The Executive Branch Cannot Simply Conjure Tariff Authority.

For years, we have warned that successive administrations of both parties have stretched emergency trade statutes far beyond what Congress ever intended. The IEEPA tariff regime that the Supreme Court struck down in Learning Resources v. Trump just months ago was the most egregious example. But the Section 122 proclamation that replaced it was hardly better.

The Constitution vests the power to lay and collect duties squarely in Congress. When Congress delegates that power to the president, it does so with specific conditions and carefully chosen language. Those conditions are not suggestions. They are the legal boundaries of presidential authority. And when the president colors outside those lines—as today’s court found he did—the resulting tariffs are simply unauthorized by law.

That’s not a political judgment. It’s a legal one. And the CIT made it correctly.