A recent Supreme Court ruling has diminished President Donald Trump’s capacity to impose trade tariffs instantly, though it hasn’t eliminated the unpredictability facing international trading partners and businesses worldwide.
The Supreme Court’s 6-3 decision invalidated many of Trump’s existing tariffs, but the president reacted swiftly on Friday by implementing a new 10% levy on all imports and launching fresh trade investigations that could result in additional fees within months. He also declared that trade agreements negotiated with nearly 20 nations should stay in place.
Within a day, Trump escalated the new tariff rate to 15% – reaching the highest level permitted by law.
According to Wendy Cutler, a former trade official and senior vice president at the Asia Society Policy Institute, Trump’s quick policy shifts demonstrate his strategy to maintain pressure on international partners.
“The uncertainty, in his view, just gives him enormous additional leverage beyond the actual tariffs. Because people are worried about what he’ll do,” Cutler explained.
However, trade specialists acknowledge that Trump’s options have become more restricted. The replacement 10% tariff expires after 150 days, and future tariffs implemented through alternative legal pathways will require more time, eliminating the president’s previous ability to impose duties instantly for any reason after the Court blocked his use of the International Emergency Economic Powers Act.
“He’s lost his favorite tool,” Cutler noted. “Particularly for foreign policy matters and things that irk him on other countries that have nothing to do with trade, he’s lost the ability to offer a credible threat.”
William Reinsch, a former government official now with the Center for Strategic and International Studies, said the Court’s decisive ruling reduced Trump’s threatening capabilities.
“It takes away his ability to wave the big stick around,” Reinsch commented, though he noted the economic effects will be minimal since the 10% tariff and upcoming duties will likely replace the now-illegal levies.
Michael Froman, president of the Council on Foreign Relations, said the decision and administration response created numerous unanswered questions, including how importers might receive refunds for illegally collected duties and what additional tariffs might be coming.
“Perhaps the most consequential impact of the Supreme Court’s decision is that it should curtail the threat or use of tariffs as the president’s preferred form of leverage or punishment outside the trade domain,” said Froman, who served as President Barack Obama’s top trade negotiator from 2013 to 2017.
This change could benefit countries that have experienced Trump’s unpredictable behavior and frequent tariff threats used to punish them over non-trade issues, extract agreements, and secure foreign investments.
Trump had previously used IEEPA to impose tariffs over various non-trade concerns, creating anxiety among nations and businesses globally. He threatened tariffs against European nations over their opposition to his Greenland claims, against Canada for permitting Chinese electric vehicle imports, and against Brazil regarding its treatment of former President Jair Bolsonaro.
Josh Lipsky, chair of international economics at the Atlantic Council, warned it was premature to assess the ruling’s full impact on Trump’s influence, given uncertainty about future tariffs and the president’s willingness to employ various tools.
“It’s a significant blow to his international economic trade agenda. It’s not a crippling one, necessarily, because of the other authorities, but we have to see how they play out in practice,” Lipsky said.
Questions remain about nearly 20 framework agreements or formal trade deals the Trump administration secured recently based on IEEPA tariff threats.
Trump, Trade Representative Jamieson Greer, and Treasury Secretary Scott Bessent maintained Friday that these agreements should continue, even with rates exceeding the temporary universal tax.
Experts doubt countries will attempt to cancel or renegotiate deals due to concerns about provoking Trump’s anger.
Miriam Sapiro, a former trade official and Columbia University professor, said while Trump may have lost his “trade bazooka,” existing deals likely won’t collapse. The ruling could provide countries more negotiating power in future discussions with the Trump administration, she suggested.
“There’ll still be interest in doing deals because of the uncertainty and the desire to keep the U.S. as a strong ally and strong partner,” Sapiro said. “But countries do have a bit more bargaining power than they might have felt they had previously.”
From Trump’s viewpoint, using IEEPA was a calculated risk that helped secure some trade agreements quickly, though details need refinement and enforcement may prove challenging, Sapiro noted.
Greer told Fox News’ “Special Report” that IEEPA was suitable given Trump’s need for quick, flexible action and helped open market access for American companies. “We don’t regret it,” he said. “We’ll just use a different tool.”
International responses have been cautious as countries evaluate the Supreme Court decision. South Korea announced it would review the ruling and U.S. response while continuing “amicable” discussions about implementing a tariff agreement completed in November with $350 billion in investment commitments.
Tom Ramage, an economic policy analyst at the Korea Economic Institute of America, said the Trump administration’s continued access to other tariff mechanisms would likely convince South Korea and its businesses to honor their commitments.
“Anything less could increase the likelihood that the president will impose further retaliation, especially if the administration seeks to make an example of countries that want to back out of negotiated deals,” Ramage wrote on KEI’s website.
