Trump tariffs still creating “huge uncertainty” after Supreme Court ruling, experts say

The Supreme Court’s decision on Friday to strike down President Trump’s Liberation Day tariffs will not relieve American companies of their concerns about the direction of trade policy.

William Reinsch, senior adviser at the Center for Strategic and International Studies and former chairman of the National Foreign Trade Council, said businesses and U.S. trading partners face “huge uncertainty” after the historic decision. “There’s a lot of dust that hasn’t been cleared up yet – companies don’t know how much they will be charged.”

Mr Trump himself is kicking up some of that dust. Shortly after the decision, he announced a temporary 10% global tax on US imports before increasing the levy. 15% on Saturday while also destroyed The high court’s decision was described as “ridiculous” and “extraordinarily anti-American” on social media.

Huge blow to Trump tariffs

The Supreme Court ruled 6-3 that the International Emergency Economic Powers Act, or IEEPA, does not authorise the president to impose broad-based tariffs, sharply curtailing the Trump administration’s use of emergency powers in trade policy. Later that day, Mr Trump invoked Section 122 of the Trade Act of 1974 to impose new duties.

“Any country that wants to play ‘games’ with the ridiculous Supreme Court decision, especially those that have ‘cheated’ the United States for years and even decades, will be faced with much higher tariffs, and worse, the ones they recently agreed to. “Buyer beware!!!” Mr Trump said Monday on Truth Social.

The White House did not immediately respond to a request for comment.

The court’s decision, as well as Mr Trump’s response, raises new questions for American businesses and foreign trading partners. Experts said some of those partners had negotiated trade deals with tariffs higher than the new 15% rate. And because the Section 122 tariffs are set to expire in 150 days, unless extended by Congress, U.S. Companies are ultimately responsible for determining the direction and rates of the tariffs.

“Pure Tariff Anarchy”

US Trade Representative Jamieson Greer said on Sunday that the Trump administration will stick to its trade deals and expects its partners to do the same. “Face the Nation with Margaret Brennan”.

Yet there are signs that some nations may reconsider those trade deals, particularly those that reached agreements on rates higher than the current 15% level set by Mr Trump on Saturday.

A top European Union lawmaker said on Sunday he would propose blocking the ratification of a new trade deal between the EU and the United States, citing fresh uncertainty. India, which earlier this month agreed to an 18% tariff rate In an interim agreement with the US, it has also postponed a trade trip to Washington that was intended to finalise the deal. According to CNBC.

“This is pure tariff anarchy on the part of the US administration,” said Bernd Lang, chairman of the European Parliament’s international trade committee. wrote on social media. “No one can make sense of it now – only open questions and growing uncertainty for the EU and other US trading partners.”

Greer reported that he had a conversation with his European counterpart this weekend, during which he did not receive any information about the deal’s cancellation.

“The deals were not based on whether emergency tariff litigation would increase or decrease,” Greer said on Face the Nation. “I haven’t heard anyone come to me yet and say the deal is done. They want to see how it goes.”

What happens now?

Mr Trump has turned to Section 122 of the Trade Act of 1974 to replace tariffs struck down by the Supreme Court. That legal provision allows the President to impose tariffs of up to 15% for 150 days to deal with “large and serious” balance of payments issues.

Legislators will need to increase the tariffs after 150 days. That proposal could face a tough challenge in Congress, Cato Institute trade expert Colin Grabow told CBS News, noting that some Republican lawmakers, such as Senator Rand Paul of Kentucky, have raised their voices against tariffs.

“The baseline for many people is that these 15% tariffs are going to be implemented over the next 150 days — but beyond that, what does that look like? Beyond that, there’s uncertainty,” Grabow said.

Since Mr Trump is committed to tariffs as both an economic and foreign policy tool, his administration is expected to continue down the path of tightening import tariffs, both Grabow and Reinsch told CBS News.

When the Section 122 tariffs expire, Mr Trump can turn to other trade laws, such as Section 301 of the Trade Act. The provision would allow Mr Trump to impose country-based tariffs if the US Trade Representative determines that another country engages in unfair trade practices.

However, Grabow noted that this will also prompt enquiries about the potential timing and location of tariffs under the new provisions.

“The IEEPA decision does not resolve the tariff question,” Grabow stated. “The only questions are, ‘What are the exact levels, what are the tools and when will they be implemented?'”

minor economic impact

The current effective US tariff rate – excluding IEEPA duties but including the new Section 122 tariffs – is now 13.7%. According to Yale Budget Lab. That’s lower than the 16% rate in effect before the Supreme Court’s decision on Friday, the nonpartisan think tank said.

Because the change is relatively small, the new tariffs are likely to have only a modest impact on the economy, Goldman Sachs said in a research note, adding that they were not adjusting their forecasts for inflation or growth to account for the levy.

Still, experts said the Trump administration’s determination to continue its tariff policies raises broader questions about whether they are achieving their intended goals. The president has argued that tariffs will revive American manufacturing and generate billions of new revenues for the federal treasury.

In 2025, the manufacturing sector could lose 108,000 jobs, according to government data.

“What is not happening is a return of manufacturing to the United States,” CSIS’s Reinsch said. The tariffs “are not producing the desired results, let’s put it that way.”

“Unprecedented” terrain

Reinsch said manufacturers who import components used to build products in U.S. plants have faced higher costs because of the Trump administration’s tariffs.

To be sure, U.S. manufacturing is grappling with long-term issues beyond tariffs, ranging from industrywide shifts to automation and fierce global competition, including from U.S. trading partners who have increased subsidies to key industries to offset the higher tariff costs.

Treasury Department collected $287 billion. The IEEPA tariffs will generate approximately $130 billion in tariffs in 2025. The Supreme Court’s decision could prompt some businesses to seek refunds from the federal government, putting revenues in question.

Experts said the only thing that seems certain is that the Trump administration is unlikely to back down from imposing additional tariffs.

“We are truly in unprecedented territory,” Grabow said. “All we know is that we have a tariff-free administration.”