Supreme Court Curbs Trump’s Tariff Power, but Global Trade Uncertainty Persists

BY MIRABEL ODETA

The U.S. Supreme Court has delivered a major setback to President Donald Trump by striking down a broad range of tariffs imposed under emergency powers, limiting his ability to deploy sweeping import taxes at a moment’s notice. Yet despite the ruling, uncertainty continues to cloud global trade, as the president swiftly moved to assert alternative authorities to keep tariff pressure alive.

Within hours of the court’s decision on Friday, Trump announced a new 10% tariff on all imports entering the United States and ordered fresh trade investigations that could lead to additional levies in the coming months. He also made clear that nearly 20 trade and investment deals negotiated with foreign governments—many of which include higher tariff rates—should remain intact. Less than a day later, he escalated the universal tariff to 15%, the highest level permitted under the statute he invoked.

Trade analysts say the rapid policy shift reflects the president’s longstanding strategy of using unpredictability as leverage. Wendy Cutler, a former U.S. trade official now serving as senior vice president at the Asia Society Policy Institute, said Trump’s quick pivot underscores his determination to keep trading partners off balance.

According to Cutler, the uncertainty itself functions as a powerful negotiating tool. Governments and multinational companies remain wary of what steps the administration might take next, creating pressure even when specific tariffs are temporary or subject to legal constraints.

Still, many experts believe the court’s 6–3 decision significantly reduces Trump’s flexibility. The justices ruled that his use of the International Emergency Economic Powers Act to impose broad tariffs exceeded statutory limits. As a result, the president no longer has what some observers described as an “anytime, anywhere, for any reason” instrument for imposing trade penalties.

Cutler said the president has effectively lost his most potent trade weapon, particularly in situations where tariffs were used to respond to foreign policy disputes unrelated to commerce. Without the ability to quickly invoke emergency economic powers, threats of sudden trade punishment may carry less credibility.

William Reinsch, a former senior government official now affiliated with the Center for Strategic and International Studies, said the ruling diminishes Trump’s ability to intimidate trading partners by “waving the big stick.” However, he noted that the economic impact could be somewhat muted, as the new 15% universal tariff and other measures expected in the coming months may replace much of the revenue generated by the invalidated duties.

Michael Froman, president of the Council on Foreign Relations and former chief trade negotiator under President Barack Obama, said the decision leaves significant practical questions unresolved. Among them is how importers might seek refunds for duties collected under tariffs now deemed unlawful, and what additional measures the administration might pursue under other statutes.

Froman argued that the most meaningful consequence of the ruling may be its broader constraint on the use of tariffs as a tool of political leverage outside traditional trade disputes. In recent years, Trump had invoked emergency powers to threaten or impose tariffs over a range of non-trade issues, creating unease among allies and adversaries alike.

European nations faced potential tariffs amid disagreements over Trump’s claims regarding Greenland. Canada was threatened over electric vehicle imports from China. Brazil came under pressure related to its treatment of former President Jair Bolsonaro, a political ally of Trump. These actions contributed to a perception among global leaders that tariff threats could arise from political disagreements far removed from commerce.

Josh Lipsky of the Atlantic Council described the court’s ruling as a significant, though not necessarily crippling, blow to the administration’s international economic strategy. He cautioned that Trump retains access to other statutory authorities that could be used to justify new trade actions. The real test, Lipsky suggested, will be how those alternative tools function in practice and whether they provide the same degree of leverage.

Uncertainty also surrounds the status of nearly 20 framework agreements negotiated in recent months under the shadow of IEEPA tariff threats. Trump, U.S. Trade Representative Jamieson Greer, and Treasury Secretary Scott Bessent have insisted that these agreements remain valid, even if they include tariff rates higher than the newly imposed universal levy.

Analysts say foreign governments may hesitate to reopen or challenge those deals for fear of provoking retaliatory measures. Miriam Sapiro, a former senior trade official and adjunct professor at Columbia University, said that while Trump may have lost what she called his “trade bazooka,” existing agreements are unlikely to unravel. However, she added that countries negotiating new deals could feel emboldened by the court’s decision and seek more favorable terms.

Sapiro noted that many governments still value strong trade ties with the United States and may continue pursuing agreements to reduce uncertainty. Yet the balance of negotiating power may have shifted slightly, giving U.S. partners more confidence in pushing back against sweeping demands.

From the administration’s perspective, invoking emergency economic powers was a calculated risk that helped accelerate trade talks and secure investment pledges. Greer defended the approach in an interview on the Fox News program “Special Report,” arguing that the statute provided necessary speed and flexibility at the time. He maintained that the administration does not regret using it and signaled that alternative legal authorities would now take its place.

Initial international reactions were measured as governments assessed both the court’s decision and the administration’s rapid policy response. South Korea said it would review the ruling while continuing amicable discussions over implementing a tariff agreement finalized in November, which included pledges of $350 billion in investment.

Tom Ramage of the Korea Economic Institute of America suggested that the administration’s continued access to other tariff mechanisms may persuade South Korea and its corporate sector to uphold their commitments. Backing away from negotiated agreements, he warned, could increase the risk of retaliatory action if the White House seeks to make an example of countries perceived as reneging on deals.

For now, the Supreme Court’s ruling marks a clear legal boundary on presidential trade powers. Yet with new tariffs already in place and further investigations underway, the broader landscape of global commerce remains fraught with uncertainty.