#UStraffis It’s shaping up to be a crazy week for the future of the U.S. economy—but honestly, which week in the last year hasn’t fit that description? Last week may be more consequential than most, since the Supreme Court struck down President Donald Trump’s so-called reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

What that really means is not known. The end of tariffs? No way. After the ruling, Trump enacted tariffs under other laws, and he’s vowed to find more. What that means for businesses is more uncertainty: watching, waiting, and preparing to turn plans on a dime.

We might not know what’s coming next in terms of federal policies, but businesses are acutely aware of their outdated and outmoded technology. It can take herculean efforts to eliminate tech debt, and particularly at a legacy firm, it can be difficult to know where to start. I talked to Danny Werfel, who was an Internal Revenue Service commissioner under former President Joe Biden, about how he modernized the technology and processes at the tax collecting agency with new funds from the Inflation Reduction Act. An excerpt from our conversation is later in this newsletter.

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TARIFFS

President Donald Trump did not have the authority to enact his sweeping “Liberation Day” tariffs, the Supreme Court ruled on Friday. These tariffs, a signature part of Trump’s economic and international policy, were enacted under the International Emergency Economic Powers Act (IEEPA) which gives presidents broad powers to issue economic sanctions during national emergencies. The majority opinion, written by Chief Justice John Roberts and signed by six justices, found that IEEPA was not a law that granted tariff authority.

What comes next? Trump has said that “tariff” is the most beautiful word in the dictionary, and he’s unlikely to change that point of view based on the ruling. There are legally tested ways presidents can issue tariffs—including Section 122 of the Trade Act of 1974, which allows the president to issue tariffs of up to 15% for up to 150 days to resolve trade imbalances, which he announced he will do in a Truth Social post this weekend. Those tariffs will expire without Congressional authorization, which Trump said he would “probably get” if he asked for it. (That last part is unclear—several Republicans have gone on the record praising the Supreme Court’s ruling.) Current federal law, Forbes’ Alison Durkee writes, also allows tariffs against imports deemed to be a threat to national security, which are in place involving some commodities today. The president can also impose tariffs to counter unfair trade practices—though these need an investigation before they can be imposed. There’s also the Tariff Act of 1930, which allows up to 50% levies against countries that have discriminated against U.S. businesses, but the law has never been used before, so it’s unclear how it will work.

What does it mean for businesses? It’s unclear at this point. The ruling left the door open for companies to be refunded the money they paid in tariffs—as of January, more than 1,000 companies had filed separate lawsuits demanding refunds if the court struck the IEEPA tariffs down—though the Trump Administration isn’t going to let that money go without a fight. Both Trump and Treasury Secretary Scott Bessent said litigation over refunds will continue.

Ever since he took office, Trump’s tariff policy has been mercurial, and businesses have been on pins and needles. Tariff percentages, industries involved and effective dates have changed seemingly by the day, so the ruling doesn’t change that. Forbes senior contributor Peter Cohan writes that this isn’t the best status for businesses, employment figures or any general investment in the U.S. economy. And no matter what, the consumers who paid for most of the tariffs are unlikely to see relief. According to a report last week posted on the New York Fed’s Liberty Street Economics blog, consumers paid nearly 90% of the tariff increases last year, Cohan wrote.

Wall Street initially reacted positively to the court’s ruling, though trading fell as this week began, with the Dow, Nasdaq and S&P 500 all down more than a point by midday Monday, as markets reacted to Trump’s new tariffs. Gold and silver prices continued to climb, however, likely owing to the tariff uncertainty, as well as uncertain geopolitical situations in Iran and Mexico.

ECONOMIC INDICATORS

Woman shopping at a convenience store and checking her receipt

Woman shopping at a convenience store and checking her receipt

Outside of tariffs, other statistics that paint a picture of the economy’s health are somewhat dim. The U.S. economy grew at a rate of 1.4% in the last quarter of 2025, according to government data released Friday. About 1% of GDP growth was lost during the 43-day government shutdown, according to the Bureau of Economic Research, and the quarter’s total was less than analysts’ predictions of 1.9% growth. The slow Q4 growth brought 2025’s full-year GDP to 2.2%, lower than 2024’s 2.8% growth.

Inflation has also continued to be sticky, with prices up 2.4% in January, compared to January 2025. While this was lower than consensus analysts’ estimates, and the lowest level for the index since May, it’s still higher than the 2% level the Fed would like to see. Minutes from January’s Open Market Committee, released last week, show “several” board members saying interest rates may need to be hiked to slow down inflation.

As far as the economy overall, things are going worse for ordinary consumers. Forbes senior contributor Erik Sherman notes that several of the high spots for inflation are expenditures that command much of the ordinary person’s budget: food, shelter, utilities and medicine. And Forbes senior contributor Pamela Danziger writes that many companies are increasing their prices. In January, the Adobe Digital Price Index showed the largest monthly price increase in 12 years for electronics, computers, appliances, furniture and bedding bought online. While Trump and officials in his administration are quick to mention the record-breaking success of the Dow Jones Industrial Average this year, and Sherman points out that just 62% of Americans reported owning stocks last year, so they’re not likely seeing the benefits.

ARTIFICIAL INTELLIGENCE

Giant robot flicking tiny man illustration

Giant robot flicking tiny man illustration

Is AI a job killer? It’s not a simple question, and the answer isn’t simple either. There are lots of doomsday predictions out there, and they’re coming from people who should know. Anthropic cofounder and CEO Dario Amodei published an essay last month that said AI is getting so much smarter and more capable every day, about half of all of the world’s entry-level white collar jobs will be disrupted within five years, and there could be AI that is more capable than everyone in two years. Microsoft AI CEO Mustafa Suleyman told the Financial Times most white-collar tasks will be fully automated by AI by next year, former presidential candidate Andrew Yang said millions of office jobs will “evaporate” in the next two years, and billionaire investor Vinod Khosla predicted AI may end up eliminating the vast majority of today’s jobs—and that as many as 125 million Americans should be exempted from income tax.

But the problem with these doomsday predictions, writes Forbes senior contributor Joe McKendrick, is that they could become a self-fulfilling prophecy that is based on predictions—not actual performance. A recent study in Harvard Business Review found that most of the companies that have cut jobs because of AI are anticipating that the technology will displace workers, but very few entire job positions have actually become unnecessary. “The phenomenon of AI taking jobs and reducing hiring is somewhat artificial,” the study argues. “Company executives who make these moves may really believe that AI will eventually lead to large-scale automation, even though it hasn’t yet.”

So what should companies do? Other than continue to assess current needs—not the anticipated needs from thought leaders who aren’t a part of your business—companies can do better by conducting comparative experiments to see how well AI handles tasks compared to people. Stop cutting jobs based on predictions, and making what could feel like needed cuts by attrition. Use existing employees to look at ways to use AI to improve workflows—especially because they know what more they could do in their specific workflow that AI could not.

which takes a long time.’

We heard a lot from taxpayers about the stubbornness of our upload tool: Your document upload tool needs modernized. It needs more documents to be able to be uploaded, because when I pull down that menu and my form or my type of correspondence doesn’t pop up, that’s frustrating. The IRS can change this. These were things that we could do to give the taxpayer an immediate response. Every time you come back, you should see and feel an expanded capability.

We had advisory boards that advise the IRS on technology and modernization, that help filter taxpayer interests and make recommendations. It’s not like we’re out there knocking on doors asking every taxpayer what they want, but there are these structures that are in place that work on your behalf to help the IRS prioritize. This was the vision: Every time you come back to the IRS in January for filing season and you log onto your account, ‘Look, I can now do this or that.’ There were a lot of different functionalities we could add that didn’t connect to the technical legacy. It could be done quickly and not be dragged down by all the technical deficits.

The big talking point I was able to share was we had made more updates to irs.gov for taxpayers in two years than in the previous 20 combined. It’s for those two reasons. One, we had money, and two, we had moved away from this idea that all the underlying code had to be cleaned up and all the data had to be this standard—all of which is important, and that work continues. But if you make that a prerequisite to do something as straightforward as upping the [file size] limit on documents to be uploaded, you’re taking an older version of the way government does tech, and it ends up being not as satisfying or responsive to the citizens’ needs.

What advice would you give a CEO who is struggling with a system that desperately needs to be upgraded and has no idea where to start?

There are things that have emerged in the last 15 years that seem to be table stakes at this point: Don’t boil the ocean, go modular, make incremental changes, and also really prioritize your requirements. A good thing to do is to brainstorm collectively amongst your leaders, force them to come up with the top 10 requirements they absolutely need. Then the CEO should come in and scratch off 10, 9, 8, 7, 6—we’re only doing one through five hyper prioritization, especially on that first iteration to make sure that you’re not burdening the modernization with nice-to-have features.

There really have been dramatic technology changes that can shorten and simplify the modernization. It’s really important to challenge your team, your vendors that are going to come in and help your integrators. Are they aware of what those game shifting technologies have been? That will allow a much different, potentially simpler, more accelerated modernization. You have to really push and have the competition around the more emerging AI solutions. A year from now, there will be even more opportunity to rethink core system updates through these new tools that are making digging into these foundations easier. You no longer have to detonate them with dynamite. There’s ways to do it that’s less loud and less long.

COMINGS + GOINGS

Cruise operator Norwegian Cruise Line Holdings appointed John W. Chidsey as its new president and chief executive officer, effective February 12. Chidsey most recently worked as chief executive officer of Subway Restaurants, and he succeeds Harry Sommer.

Global airline alliance oneworld selected Ole Orvér to be its new chief executive officer, effective April 1. Orvér most recently worked as chief commercial officer at Finnair, and he will succeed Nathaniel Pieper.

Alcohol producer and marketer Constellation Brands tapped Nicholas Fink as its new president and chief executive officer, effective April 13. Fink most recently worked as chief executive officer at Fortune Brands Innovations, and he will succeed Bill Newlands, who is retiring.

STRATEGIES + ADVICE

The latest files on convicted sex offender and financier Jeffrey Epstein have included information and correspondence that have ended prominent peoples’ careers in a variety of industries. Here are some lessons business leaders can take from the Epstein files backlash.

One of the hardest things a CEO can decide to do is step down and make way for a new kind of leader—but it could also be the best thing for your business. Here’s why it’s important to take a critical look at yourself and your business.

QUIZ

Which reigning champion professional sports team is now up for sale?

A. Las Vegas Aces

B. Seattle Seahawks

C. Oklahoma City Thunder

D. Florida Panthers

See if you got the answer right here