A Supreme Court decision on Friday dramatically reshaped the U.S. trade landscape, striking down the centerpiece of President Trump’s second-term tariff program. In a 6-3 ruling, the court found that his sweeping blanket tariffs were illegal, declaring that the 1977 law he used—the International Emergency Economic Powers Act—does not grant the president the authority to impose tariffs.
The ruling, which upholds decisions from two lower courts, is a significant blow to a key administration policy and is expected to immediately halt a massive section of the tariffs originally announced over a year ago. It also raises the possibility of refunds that could return over $100 billion to importers in the coming months.
President Trump responded fiercely, attacking the high court and the justices in the majority, whom he called a “disgrace to our nation.” He immediately signaled his administration would pursue alternative methods to achieve its trade goals.
His first move was to sign an executive order late Friday imposing a new 10% “global tariff” under a different law, Section 122 of the Trade Act of 1974. This statute allows a president to impose tariffs of up to 15% for 150 days to address trade deficits, though this authority has never been used before.
Then, on Saturday, the president escalated the action. In a social media post, he announced he was raising the tariff rate to the maximum 15% level allowed under the law. “Please let this statement serve to represent that I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level,” he wrote.
The new tariff is scheduled to take effect shortly, according to a White House fact sheet. The decision is expected to have wide-ranging ramifications, affecting global trade, consumers, companies, and inflation. International partners are already considering their response; a French trade minister stated that the European Union has the tools to respond and should adopt a “united approach” to the new levies.
Meanwhile, the administration is planning a high-stakes trip, with the president scheduled to visit China next month for a meeting between the leaders of the world’s two largest economies.
