Supreme Court Strikes Down Trump Tariffs, Sparking New Levy Vow

WASHINGTON – In a significant blow to former President Donald Trump’s economic agenda, the Supreme Court on Friday struck down his sweeping tariffs, ruling 6-3 against his unilateral imposition of global trade barriers. The decision has prompted Trump to vow the implementation of a new 10% global tariff under a different legal authority.

Supreme Court Ruling

The Court determined that Trump did not have the authority to impose the tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law originally intended to limit presidential powers. Chief Justice John Roberts, writing for the majority, stated that duties and taxes are the exclusive competence of the legislative branch unless specifically delegated to the executive branch – a delegation the Court found lacking in this case. AP News

Trump’s Response

Following the ruling, Trump expressed his disappointment, calling the justices who voted against his tariffs “absolutely ashamed.” He announced his intention to sign an executive order imposing a 10% global tariff under Section 122 of federal law, and indicated he is exploring other tariff options. AP News, The New York Times, USA TODAY

Trump also criticized the plaintiffs in the lawsuit, labeling them “sleazebags,” and defended his tariff policies as beneficial to the country. USA TODAY

Market Reaction

The financial markets reacted swiftly to the Supreme Court’s decision. Global stock markets rose, with Milan gaining 1.5%, Paris and Frankfurt increasing by 0.5%, and Wall Street’s Dow Jones up 0.33%. Though, U.S. Treasury yields tumbled, reaching 4.75% for 30-year bonds, as investors expressed concerns about a potential increase in the U.S. Budget deficit due to the loss of tariff revenue. AP News

Analysts estimate that the loss of tariff revenue could necessitate increased government debt and potentially require refunds of approximately $170 billion to importers. USA TODAY

International Response

The European Union has called for clarity and stability in trade relations following the ruling. A spokesperson for the EU Commission emphasized the importance of predictable trade relations for European businesses and stated that the Union is analyzing the Court’s decision and consulting with the U.S. Administration. AP News

Potential Alternative Tariff Options

Despite the legal setback, Trump has several potential avenues to reimpose tariffs, according to analysis by the Congressional Research Service. These include:

• Section 232 of the Trade Expansion Act of 1962: Allows tariffs for national security reasons, but requires lengthy Commerce Department investigations.
• Section 201 of the Trade Act of 1974: Can be used if increased imports harm American producers, requiring public hearings and gradual rate reductions.
• Section 301: Previously used against China for intellectual property violations, requiring prior consultations.
• Section 122: A previously unused option that could impose tariffs of up to 15% for 150 days without congressional approval.
• Section 338 of the Smoot-Hawley Tariff Act of 1930: A controversial option allowing tariffs of up to 50% against discriminatory countries, likely to face legal challenges.

AP News