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Trump imposes new global tariff following Supreme Court ruling
U.S. President Donald Trump announced a 10% global tariff on Friday, replacing measures struck down by the Supreme Court earlier the same day. The court ruled 6-3 that Trump had exceeded his authority in imposing the previous tariffs, a decision the president called "terrible" and criticized the justices who opposed his policy as "fools."
Supreme Court decision and immediate fallout
The Supreme Court invalidated most of the global tariffs Trump introduced last year, citing an overreach of presidential powers. The ruling was celebrated by businesses and states that had challenged the duties, potentially paving the way for billions in refunds. However, it also introduced fresh uncertainty into global trade.
Chief Justice John Roberts, writing for the majority, stated that Congress had not explicitly delegated tariff-setting authority to the president. "When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits," he wrote. The decision was supported by the court's three liberal justices and two Trump-appointed justices, Amy Coney Barrett and Neil Gorsuch.
"When Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes."
Chief Justice John Roberts
Trump's response and new tariff plan
Trump swiftly responded to the ruling by signing a proclamation to impose a new 10% global tariff under Section 122, a previously unused law allowing tariffs up to 15% for 150 days, after which Congress must intervene. The tariff will take effect on February 24.
The president suggested the new approach would ultimately strengthen U.S. trade policy. "We have alternatives-great alternatives-and we'll be a lot stronger for it," he said. He also indicated that refunds for the invalidated tariffs would face prolonged legal battles, predicting the issue would remain in courts for years.
Trump expressed frustration with the Republican-appointed justices who sided against him, calling them "fools and lap dogs" and accusing them of being "unpatriotic and disloyal to our Constitution."
Exemptions and global reactions
The new tariff includes broad exemptions for certain minerals, agricultural products, pharmaceuticals, electronics, and vehicles. However, the proclamation does not specify which items within these categories will be exempt. Canada and Mexico will retain exemptions under the USMCA trade agreement, covering most goods.
Countries with existing trade deals, such as the UK, India, and the EU, will now face the 10% tariff instead of previously negotiated rates. A White House official stated that these countries are expected to continue abiding by their trade concessions.
Reactions from major trade partners were subdued. The European Commission said it was "analysing the ruling carefully," while French President Emmanuel Macron noted the importance of "checks and balances in democracies" and indicated France would assess the implications of the new tariff.
Business relief and legal uncertainties
U.S. businesses reacted cautiously to the Supreme Court's decision, with shares on Wall Street rising modestly. The S&P 500 closed up 0.7% following the announcement.
"I feel like a thousand-pound weight has been lifted off my chest."
Beth Benike, owner of Busy Baby products in Minnesota
Nik Holm, CEO of Terry Precision Cycling, one of the small businesses involved in the case, called the ruling a "relief" but noted it would take months to restore normal supply chains. He expressed hope for refunds of the improperly collected duties.
Governors from California and Illinois demanded refunds, with Illinois Governor JB Pritzker sending Trump an invoice for nearly $9 billion, equivalent to $1,700 per family in the state. California Governor Gavin Newsom called the tariffs an "illegal cash grab" and insisted on refunds with interest.
Legal experts warned that recouping refunds could be challenging, particularly for smaller firms. Diane Swonk, chief economist at KPMG US, advised businesses to temper their expectations, noting the high cost of litigation. Steve Becker of Pillsbury law firm suggested the government could streamline the process by avoiding lawsuits.
Broader implications for trade policy
Analysts anticipate the Trump administration may explore other legal tools, such as Section 232 and Section 301, to impose tariffs on national security or unfair trade practice grounds. These tools were previously used for tariffs on steel, aluminum, and automobiles, which remain unaffected by the court's ruling.
Geoffrey Gertz, a senior fellow at the Center for a New American Security, described the situation as "more complicated and more messy" following the court's decision.
The U.S. has already collected at least $130 billion in tariffs under the now-invalidated law, according to government data. Hundreds of firms, including Costco, Alcoa, and Bumble Bee, have filed lawsuits to contest the tariffs and secure refunds.
