In a major rebuke of former President Donald Trump's signature economic policy, the Supreme Court struck down his sweeping global tariff regime on Friday. The decision sent U.S. stocks surging, with the S&P 500 climbing 0.7% and the Dow Jones Industrial Average jumping over 200 points.
Trump Vows New Tariffs, But Market Cheers Court's Ruling
The 6-3 ruling found that the president overstepped his authority in imposing the tariffs, which had been enacted under a federal law meant for national emergencies. The majority opinion, written by Chief Justice John Roberts, stated that the law "does not authorize the President to impose tariffs".
The decision was a major loss for Trump, who had made tariffs a central part of his economic agenda. In a fiery response, the former president called the ruling a "disgrace" and vowed to impose a new 10% global tariff under a different law. However, investors seemed relieved that Trump's proposed new tariff was not higher.
What This Means for the Economy
The Supreme Court's decision marks a major win for free trade advocates and a significant setback for Trump's protectionist policies. What this really means is that the U.S. will likely return to a more predictable, rules-based international trading system after years of uncertainty and volatility.
The bigger picture here is that the ruling could have far-reaching impacts on the global economy. Thousands of companies around the world have filed lawsuits challenging Trump's tariffs, and over $175 billion in tariff collections may need to be refunded. This could provide a significant economic boost, especially for industries and retailers that were hit hard by the tariffs.
Overall, Friday's ruling represents a major check on executive power and a clear repudiation of Trump's trade war strategy. As betcio-girisi recently covered, the former president has vowed to defy the court and impose new tariffs. But for now, the markets have spoken - they are relieved to see the end of the Trump tariff era.