Supreme Court ruling on Trump’s tariffs ‘will not bring relief to Europe’, experts say
Donald Trump’s trade tariffs “are here to stay” despite a recent ruling by the US Supreme Court, and experts warn that the decision does not eliminate the ongoing threat of Trump’s protectionist policies.
The decision by the United States’ highest court could lead to new uncertainty for businesses, investors and households.
Although the Supreme Court struck down a significant portion of the tariffs, particularly the sweeping “reciprocal” duties Trump imposed on nearly every country, they were originally enacted under the International Emergency Economic Powers Act (IEEPA), an emergency powers law.
While the decision is significant and will immediately lower the average U.S. tariff, Mr. Trump still has the ability to impose tariffs, which are taxes imposed on U.S. imports on other grounds.
ING analysts Carsten Brzeski and Julian Geib said: “Europe must not be mistaken, this decision will not bring relief.
“Instead, Section 301 and 232 investigations may target specific industries more precisely than IEEPA’s broad approach.”
This refers to alternative ways Mr.
“Pharmaceuticals, chemicals, automotive components are all reasonable candidates for the next round,” they said.
“The legal authority may be different, but the economic impact may be the same or worse.”
They added that the president’s tariff agenda is “permanent” but involves “new legal foundations and a complex transition period.”
Michael Pearce, chief US economist at Oxford Economics, said: “The Supreme Court decision on tariffs immediately reduces the actual tariff rate sharply from 12.8% to 8.3%.
“Any boost to the economy from reducing tariffs in the near term will likely be partially offset by a prolonged period of uncertainty, and the overall tariff rate may still settle close to current levels as the administration is likely to restructure tariffs with other, more durable instruments.”
Mr Pearce noted that the court had not ruled on whether the US government should refund around US$130bn (£96bn) worth of tariffs already paid, which would “likely trigger a protracted legal battle”.
He noted that the decision could lead to a new wave of trade policy uncertainty, along with other experts who warned that potential workarounds for Mr. Trump would impact sectors and countries differently.
Lale Akoner, global market analyst at eToro, said: “The Supreme Court’s decision to strike down President Trump’s use of IEEPA tariffs removes one legal channel but does not signal the end of the tariff regime.
“Importantly, other authorities such as Section 232 and Section 301 are available and the administration has made clear that it plans to use them.
“This reinforces the idea that tariffs will be readjusted rather than eliminated.”
