Our Hot Take on The SCOTUS Tariff Decision

The Supreme Court has struck down Trump’s tariffs under the International Economic Emergency Powers Act by a majority of six to three, just as we predicted long ago. There were complicated concurrences and two separate dissents, but these tariffs are dead. Market reaction has been muted because this has all come to be generally expected. The Court was silent as to refunds, which means they can proceed – the government promised refunds with interest to the two lower courts. Trump has limited scope to impose tariffs under other authorities. Sections 232 and 301 are cumbersome and already exhausted. He could argue that IEEPA tariffs are in fact “licenses,” but this would be a legal stretch that would end up back with SCOTUS. But at this point, with an “affordability crisis,” Trump is removing and reducing tariffs, not adding them. Trade deals real and imagined may fall apart, or the US tariff components of them can simply vanish, which would make them better. Trade deficits have only worsened since Trump took office, and China’s exports to the world are at a record high, so the tariffs failed in their mission anyway.