Trump apprehensive about judicial action potentially overturning his tariffs; EU suggests they may struggle to recover from such a legal setback, states.
The U.S. economy and global trade are bracing for a significant impact as the Supreme Court prepares to review a potential ruling on President Trump's tariffs. The decision, expected by mid-2026, could either reaffirm broad presidential authority over trade policy or curtail it, with major financial consequences for importers and shifts in U.S. trade governance.
According to calculations by the WTO and IMF, the average U.S. tariffs currently stand at 20.1%, the highest level since the early 1910s, excluding some weeks in 2025. This percentage was significantly lower at 2.4% on January 20, the day of Trump's second inauguration.
The legal battle centres on Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs as national security and emergency measures. The tariffs have targeted countries like Mexico, Canada, China, and others, and have been blocked by the U.S. Court of International Trade. An appeals court is currently considering the case further.
The White House is preparing to appeal to the Supreme Court if the lower courts rule against the tariffs. Trump has referred to the tens of billions of dollars collected from these additional customs duties. However, the Justice Department has warned that striking down these tariffs could have catastrophic economic and national security consequences, evoking fears of economic turmoil similar to the Great Depression.
The Supreme Court's decision will have far-reaching implications. If the tariffs are struck down, there could be potential for costly tariff refunds, legal uncertainty for importers, and diminished executive trade authority. This may chill future rapid trade-policy responses. On the other hand, upholding the tariffs could reinforce broad presidential discretion in trade, potentially encouraging more aggressive tariff use as a tool of foreign policy and economic leverage, affecting global markets and trade partners.
This potential ruling represents one of the most consequential trade-related constitutional decisions in U.S. history. It could influence not only billions in trade but also the scope of executive authority in future economic crises and trade disputes. Trump has stated that a judicial ruling invalidating part of his tariffs would not allow for the recovery of the U.S. economy, likening it to the Great Depression of 1929.
In the midst of these developments, Trump continues to threaten to impose more tariffs on products entering the U.S., ranging from 10% to 50%, on Brazil, excluding specific sectors like automobiles, steel, aluminum, and copper. The 79-year-old Republican president has also stated that he knows the judicial system better than anyone, and that America could not recover from a judicial tragedy regarding his tariffs.
As the Supreme Court prepares to make its decision, the future of U.S. trade governance hangs in the balance, with significant implications for the U.S. economy and international trade relations.
The Supreme Court's forthcoming ruling on President Trump's tariffs could have profound impacts on U.S. trade governance and the economy, with possible implications for policy-and-legislation and politics. If the tariffs are struck down, general-news outlets may report on the potential for costly tariff refunds, importer uncertainty, and reduced executive trade authority, which could affect future trade-policy responses. Conversely, upholding the tariffs could reinforce the president's trade authority, potentially leading to more aggressive tariff use in politics, and adversely impacting international trade relations and markets.
