You Heard It Here First: Court Strikes Down Trump's Tariffs

As we predicted from the very first day, the US Court of International Trade has struck down the Trump tariffs imposed under the International Emergency Economic Powers Act, including the 10% “baseline” tariff and the various “reciprocal” tariffs. It was a unanimous ruling by a panel of three judges, appointed by Obama, Reagan and Trump himself. The Justice Department has said it will appeal, but we think the Supreme Court will uphold the lower court. All three Trump appointees will vote against him. They are constructionists who read the text of laws, and they will find that IEEPA simply does not give the power to lay tariffs. Trump has other laws to use, as he did in 2018 and 2019 to punish China, and already again in 2025 for his sectoral tariffs. He will use them, to be sure. But the time of unconstrained ad hoc tariff improvisation is over. Markets have already learned to look through it, but now it's official.