The United States Supreme Court, on Friday, concluded that President Donald Trump cannot use national emergency powers to impose tariffs during peacetime.

Trump’s New Tariff Announcement

Trump announced a 10% global tariff after this decision, criticizing the Supreme Court’s ruling as “ridiculous” during a press conference. He stated that he plans to levy the tariffs using alternative legal frameworks, such as the Trade Expansion Act of 1962 and the Trade Act of 1974. Trump mentioned:

“Effective immediately. All national security tariffs under Section 232 and Section 301 tariffs remain fully in place. And in full force and effect. Today, I will sign an order to impose a 10% Global tariff under Section 122 over and above our normal tariffs already being charged.”

Trump Tariff Announcement Trump announced a 10% global tariff in response to the Supreme Court’s ruling. Source: The White House

Following Trump’s previous tariffs, markets significantly affected included high-risk areas such as cryptocurrencies and equities due to heightened uncertainty.

Supreme Court’s Ruling

Previously, Trump had imposed a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods, citing national security concerns. The Supreme Court, however, did not endorse these arguments and stated that the Executive Branch lacks authority to impose such tariffs during peacetime, as highlighted in their ruling:

“In IEEPA’s half-century of existence, no president has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.”

The Supreme Court emphasized the constitutional allocation of tax powers to Congress, stating:

“Article I, Section 8, of the Constitution specifies that ‘The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.’”

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