The recent ruling from the U.S. Supreme Court dealt a significant blow to President Donald Trump, stating that he cannot impose tariffs using the International Emergency Economic Powers Act (IEEPA) during peacetime. This ruling, delivered on a Friday, has stirred the political landscape and prompted immediate responses from the White House.
Trump responded swiftly, announcing a new 10% global tariff on all imports, which he intends to enforce under Section 122 of the Trade Act of 1974. This executive order is set to take effect within three days, further complicating the international trade environment. The President has assured that existing tariffs imposed under Sections 232 and 301 will remain in effect despite the Supreme Court’s ruling.
The court highlighted that in the 50 years of the IEEPA’s existence, no former president has invoked this act to impose tariffs at such a scale. The Supreme Court also underscored that the Constitution vests the power to levy taxes and duties solely in Congress, not the presidency.
Historically, Trump has utilized the IEEPA to impose substantial tariffs, including a 25% tariff on goods from Canada and Mexico and a 10% tariff on Chinese imports, claiming these actions were necessary for national security. The Court rejected these arguments, stating that they did not constitute valid grounds for such wide-ranging measures.
During a press conference shortly after the ruling, Trump expressed his discontent, labeling the decision as ‘ridiculous’ and indicating his intent to leverage other legal frameworks, including the Trade Expansion Act of 1962, to impose tariffs.
Trump’s New Tariff Plan
Under the new executive order, the global tariff is slated to stay in place for five months, with potential extensions requiring Congressional approval. Trump also announced the initiation of new trade investigations into the unfair practices of other nations under Section 301.
While Trump clarified that the ruling did not eliminate all tariffs, it specifically restricted the application of the IEEPA for this purpose. His ongoing tariff strategies have historically been linked to volatility in the markets, particularly affecting risk assets, including cryptocurrencies.
Bitcoin and Market Reaction
In a notable market reaction, Bitcoin’s price climbed slightly to around $67,700 following Trump’s announcement. This resilience indicates a possible lack of adverse short-term reactions in cryptocurrency markets, as BTC rose from approximately $67,000 after the tariff news broke.
Such announcements have a history of introducing volatility into various asset classes, including cryptocurrencies and equities. Despite the Supreme Court’s ruling, Bitcoin’s stakeholders appeared unaffected, suggesting market participants might have anticipated further tariff implementations.
Regarding the financial implications of his tariff policies, Trump mentioned that refunding the estimated $175 billion in tariff revenue back to importers is unlikely without protracted litigation, which he indicated could take years to resolve.
