The U.S. Supreme Court's ruling on Friday that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful represents a clear curtailment of one legal avenue that the Trump administration used to raise import duties. But market watchers and policy analysts say the decision is unlikely to provide immediate calm for the global economy - instead ushering in renewed uncertainty as governments and companies try to assess what comes next.
The tariffs at issue, which were estimated to have generated in excess of $175 billion, were a significant component of the recent expansion in U.S. trade levies. Trade policy monitor Global Trade Alert calculated that the ruling would slice the trade-weighted average U.S. tariff nearly in half - from 15.4% down to 8.3% - although for some trading partners the reduction is steeper and for others still leaves tariffs at elevated levels.
Responding to the court's decision, President Trump announced a new set of global tariffs of 10% applied for an initial 150-day period. The administration has also said it is not clear whether refunding funds already collected will be required, leaving a major open question for exporters, importers and governments that counted on that revenue or took steps to accommodate the levies.
Analysts framed the ruling as a partial but not decisive change. "In general, I think it will just bring in a new period of high uncertainty in world trade, as everybody tries to figure out what the U.S. tariff policy will be going forward," said Varg Folkman, analyst at the European Policy Centre. "In the end it’s going to look pretty much the same."
Economists at ING put the point more visually: "The scaffolding has come down, but the building remains under construction. No matter how today’s ruling reads, tariffs are here to stay."
While the immediate legal limit applies only to tariffs taken under the IEEPA - the statute tied to emergency powers - observers note the administration had telegraphed it would seek other statutory authorities to reimpose duties. That means the practical effect of the decision could be to generate a succession of new measures that would need to be tracked closely by trade partners and market participants.
One consequence of the ruling is pressure on the dozens of bilateral arrangements negotiated with the United States to set tariff levels and in some cases to secure investment commitments. Those agreements now face scrutiny over whether the court's decision provides leverage to reopen or renegotiate terms. Some lawmakers and trade officials are moving quickly to respond; Bernd Lange, chair of the European Parliament's trade committee, said the body would vote to ratify the EU-U.S. pact as soon as Monday.
Lange framed the court decision as the possible end of an era of "unlimited, arbitrary tariffs," and urged a cautious evaluation of the judgment and its effects. Britain's government, for its part, said it expects the preferential 10% tariff it obtained with Washington to remain in place.
Countries and companies have already adjusted to the higher U.S. tariff environment in various ways, in part by shifting trade flows. A Federal Reserve Bank of New York report referenced in recent discussions noted that Americans bore much of the burden from the levies. And international data cited by officials show uneven impact across markets: the International Monetary Fund in its latest World Economic Outlook projected global growth at a resilient 3.3% in 2026, while China reported a record trade surplus of nearly $1.2 trillion in 2025, a performance driven by strong exports to markets outside the United States.
These dynamics mean some governments may elect to preserve existing bilateral deals rather than reopen negotiations and risk renewed market disruption like the disorder seen in the spring of 2025, when reciprocal tariffs produced sharp uncertainty. "Some countries may choose to stick with their existing bilateral deals with the U.S. rather than inviting the kind of uncertainty we saw in the spring in 2025," Varg Folkman said.
Still, other observers see political and commercial reasons why agreements could come under pressure. Niclas Poitiers, research fellow at Bruegel, pointed to the contested nature of the EU-U.S. deal, suggesting there are circumstances in which that pact could unravel given perceptions that Europe made concessions and received less favorable outcomes.
For markets and corporate planners, the net result is a renewed epoch of policy unpredictability. The court has removed one instrument, but it has not eliminated the broader policy objective that drove those duties. Companies that trade with the United States, investors who price sovereign and corporate risk, and governments that negotiated bilateral accords will need to monitor developments closely - particularly the scope of any refunds, the text and duration of new tariffs, and the fate of negotiated pacts.
Key takeaways
- The Supreme Court ruled that tariffs imposed under the IEEPA are unlawful, reducing the trade-weighted U.S. tariff average from 15.4% to 8.3% according to Global Trade Alert.
- The administration announced a temporary 10% global tariff for 150 days and has signaled it may use other legal authorities to reimpose duties, prolonging uncertainty for global trade.
- Existing bilateral agreements with the U.S. may be reexamined or renegotiated, raising political and economic questions for trading partners including the EU and the UK.
Risks and uncertainties
- Uncertainty over whether funds collected under the now-invalid tariffs must be refunded - affecting exporters, importers and government revenues.
- Potential for new tariffs under alternative legal authorities, which could sustain trade policy volatility and affect trade-dependent sectors.
- Possibility that bilateral deals with the U.S. could be renegotiated or unravel, with implications for investment commitments and market access.
Markets will be watching for the administration's next steps, legal clarifications, and the responses of trading partners - all of which will determine how lasting the ruling's practical effects will be.