US Supreme Court Strikes Down Some Trump Tariffs, But Trade Uncertainty Stays

The US Supreme Court struck down about half of President Trump's tariffs. However, many businesses still face uncertainty about future trade rules.
By Newsroom | Law, Business |

The U.S. Supreme Court has struck down key parts of President Donald Trump's tariff policy, a move that has brought cautious relief to international trading partners. However, the decision has not fully cleared the confusion for global businesses, which must still navigate a landscape marked by other existing tariffs and the potential for future trade actions. The ruling has led to some market positive reactions, but a sense of continued uncertainty persists regarding the future of international trade levies.

‘Murky Waters’ for Global Businesses After Trump’s Tariff Loss - 1

Trade Policy Shift and Lingering Questions

The Supreme Court's decision on Friday declared large parts of President Trump's broad tariff policy illegal. This policy, which had been in place since last year, imposed significant duties on goods from many countries, including the U.K. and the European Union. While this ruling is seen as a victory for countries trading with the U.S., it mainly addressed tariffs enacted under the International Emergency Economic Powers Act (IEEPA).

Read More: Supreme Court Ruling on Tariffs: Businesses May Get Billions Back, But How?

‘Murky Waters’ for Global Businesses After Trump’s Tariff Loss - 2

  • The ruling impacts tariffs that represented about half of the total collected.

  • It did not affect sector-specific tariffs, such as those on steel, pharmaceuticals, and automobiles.

  • President Trump has expressed strong disagreement with the Supreme Court's decision.

  • Public opinion polls from January indicated that a majority of Americans felt Trump had imposed too many tariffs.

International Reaction and Business Impact

Trading partners of the U.S. have responded with a mixture of relief and apprehension. While welcoming the reversal of some tariffs, many are still uncertain about the future implications.

‘Murky Waters’ for Global Businesses After Trump’s Tariff Loss - 3

"The decision… gives clarity on the president’s executive powers to raise tariffs, it does little to clear the murky waters for business." - William Bain, head of trade policy at the British Chambers of Commerce.

  • Businesses in sectors like consumer discretionary, equipment manufacturing, and medical equipment had previously warned of needing to cut financial guidance due to tariff impacts.

  • The stock market showed positive movement following the Supreme Court's announcement.

  • There is no clear indication on whether U.S. importers will receive refunds for tariffs already paid, or if foreign exporters will be eligible for rebates.

Limited Scope of the Ruling

The Supreme Court's judgment is specific to the IEEPA, meaning other trade policy tools remain available to President Trump. This leaves room for future trade actions that could affect global commerce.

‘Murky Waters’ for Global Businesses After Trump’s Tariff Loss - 4

  • The decision does not prevent the imposition of tariffs under different legal statutes.

  • President Trump has historically viewed tariffs as a key negotiation tactic.

  • Evidence does not suggest that the tariffs have successfully revived domestic manufacturing as promised.

Future Outlook and Expert Views

The ruling, while a significant legal development, has not provided a definitive end to trade policy uncertainty. Experts note that the President still has a range of instruments at his disposal to implement trade measures.

"U.S. trading partners offered a cautious welcome to the U.S. Supreme Court's decision Friday to strike down large parts of President Donald Trump's flagship trade policy on global tariffs — but global trade bodies warned of lingering uncertainty surrounding import levies." - Article 1 Summary.

  • The British Chambers of Commerce highlighted that the ruling clarifies executive powers but leaves business uncertainty largely unresolved.

  • Some U.S. business groups saw the decision as an opportunity for the White House to adopt a more deliberate approach to trade policy.

Conclusion

The Supreme Court's decision to invalidate significant portions of President Trump's tariff policy represents a landmark legal outcome. It offers some immediate relief to U.S. trading partners, who had faced considerable economic pressure. However, the ruling's limited scope, primarily focused on tariffs enacted under the IEEPA, means that fundamental questions about future trade policy and the application of other tariff mechanisms remain unanswered. Businesses, therefore, continue to operate in an environment of considerable ambiguity. Further actions by the administration or future legal challenges could reshape the trade landscape once more.

Read More: US Supreme Court Stops President's Global Tariffs on Goods from Friday

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Frequently Asked Questions

Q: What did the US Supreme Court decide about President Trump's tariffs on Friday?
The Supreme Court ruled that large parts of President Trump's tariff policy, which used the International Emergency Economic Powers Act (IEEPA), were illegal. This decision affects about half of the tariffs that had been collected.
Q: Do all tariffs imposed by President Trump now end because of this ruling?
No, the ruling only affects tariffs put in place under the IEEPA. Tariffs on specific items like steel, cars, and medicines are still in place. The President can also use other laws to put new tariffs on goods.
Q: How does this Supreme Court ruling affect businesses and international trade partners?
While some trading partners and businesses are relieved that some tariffs are gone, many are still worried. The ruling did not solve the problem of ongoing trade uncertainty because other tariffs remain and the President can still create new ones.
Q: Will businesses get refunds for the tariffs they already paid?
The article does not say if U.S. importers will get refunds for tariffs they have already paid. It also does not say if foreign exporters can get money back. This is one of the questions businesses still need answered.
Q: What do experts think about the future of trade policy after this ruling?
Experts believe that even with this Supreme Court decision, there is still a lot of uncertainty. The President has other ways to make trade rules, and businesses are waiting to see what he does next. Some groups hope this ruling will lead to a more careful approach to trade policy.