In a defiant move, President Donald Trump has signed an executive order imposing a new 10% global tariff on imports, just days after the Supreme Court struck down his previous sweeping tariff regime as unlawful. What this really means is that the Trump administration is doubling down on its aggressive trade policies, despite a major legal setback.
Bypassing the Court's Ruling
The Supreme Court ruled last week that Trump had exceeded his authority in unilaterally imposing tariffs of up to 50% on imports under the 1977 International Emergency Economic Powers Act. The 6-3 decision was a significant rebuke of the president's trade agenda. However, Trump is now using a different law - the rarely-invoked Section 122 of the Trade Act of 1974 - to impose a new 10% tariff on all imports for the next 150 days.
As CNBC reports, this temporary global tariff does not require the same level of justification or procedural steps that the previous tariffs did. The bigger picture here is that Trump is intent on maintaining his protectionist policies, even if it means working around the constraints placed on him by the judicial branch.
Uncertainty and Market Volatility
Investors have reacted with trepidation to this latest development, with Reuters noting that the new tariff has "kept the world on edge" and created "renewed confusion" in global markets. There are concerns that this will further disrupt supply chains, drive up consumer prices, and undermine the fragile economic recovery.
The fate of the $175 billion in tariff revenue collected by the Trump administration under the now-invalidated tariffs also remains uncertain. As CNN reports, the Supreme Court decision did not address what should happen to those funds, leaving businesses and consumers to wonder if they will ever see refunds.
A Continued Trade War?
Trump's defiant response to the Supreme Court's ruling suggests that the U.S. trade war is far from over. By finding a new legal avenue to impose tariffs, the president is signaling that he is willing to keep pushing his protectionist agenda, even in the face of judicial opposition. This could lead to further escalation of tensions with key trading partners and continued market volatility.
Only time will tell how this latest chapter in the ongoing trade saga will play out. But one thing is clear: President Trump is determined to wield the power of tariffs, regardless of the legal obstacles placed in his path.