Supreme Court decision on emergency tariffs: “Some tariffs are out — but uncertainty returns"
Julian Hinz, head of the Trade Policy Research Group at the Kiel Institute for the World Economy, comments on the Supreme Court of the United States decision striking down the Donald J. Trump administration’s emergency-tariff basis under IEEPA — and the immediate imposition of new 10% tariffs on US imports:
“The Supreme Court decision would have reduced the economic impact of the 2025 tariff shock in the short run. But within hours, the administration announced a new blanket tariff on all imports under a different legal route.
Economically, the key point remains: tariffs are paid at home. The burden falls primarily on U.S. importers and consumers, not on ‘foreign exporters’ in any mechanical way. When trade volumes fall, the welfare costs also show up largely in the U.S. economy through higher input costs, higher consumer prices, and disrupted supply chains.
The biggest problem now is uncertainty. The legal basis has shifted, the policy direction has not. A temporary across-the-board tariff — paired with signals that further investigations and sectoral measures may follow — puts firms back into wait-and-see mode: delaying investment, postponing sourcing decisions, and repricing contracts.
This also casts a shadow over recent bilateral ‘tariff deals’ negotiated in the presence of emergency-tariff leverage. If the legal foundations and tariff schedules change again, many of those understandings will have to be revisited. In short: tariff uncertainty is back — and that is bad for business."
