Trump tariff court ruling does little to end uncertainty for global business

The US supreme court just declared Donald Trump’s boldest tariffs illegal, but international businesses and governments are still uncertain over what’s to come.After the court said the president cannot enact tariffs in peacetime using the International Emergency Economic Powers Act (IEEPA), the White House said it will quickly replace the levies by other – but potentially more cumbersome – means.William Bain, head of trade policy at the British Chambers of Commerce, said that while the decision “gives clarity on the president’s executive powers to raise tariffs, it does little to clear the murky waters for business”.The court ruling applies only to the IEEPA and not other trade policy tools at Trump’s disposal.“Different legislation has been used for other US tariffs, such as for steel and aluminium, and the president also has other options at his disposal to retain his current regime,” Bain said, noting that Trump could use the 1974 Trade Act to impose even higher tariffs than the additional 10% levies imposed on the UK.The decision also did not offer any clarity on whether US importers will receive refunds for levies that have been paid or whether foreign exports will be able to share any rebate based on trading terms, Bain added.The European Commission spokesman, Olof Gill, said: “We take note of the ruling by the US supreme court and are analysing it carefully. We remain in close contact with the US administration as we seek clarity on the steps they intend to take in response to this ruling. “Businesses on both sides of the Atlantic depend on stability and predictability in the trading relationship. We therefore continue to advocate for low tariffs and to work towards reducing them.”The Canadian Chamber of Commerce also cautioned against viewing the US court ruling as “a reset of US trade policy”.“Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,” the chamber’s president, Candace Laing, said in a statement.Dominic LeBlanc, Canada’s minister for international trade, said businesses still needed “support” and promised Canada would continue working with the US “to create growth and opportunities on both sides of the border”.The Germany industry group BDI said the ruling was a “strong signal for the rules-based trading system” adding that “the verdict is clear proof that the separation of powers in the USA still going strong”.For India, which recently struck a deal with Trump to bring down its tariffs from 50% to 18%, the court’s ruling will mean a majority of Indian exports to the US will no longer face the tariffs, according to Ajay Srivastava, a former trade official in the country.“The decision effectively renders recent trade deals initiated or concluded by the United States with the UK, Japan, the EU, Malaysia, Indonesia, Vietnam and India one-sided and useless,” Srivastava said in analysis for the Global Trade Research Initiative. “Partner countries may now find reasons to dump these deals.”US business groups celebrated the ruling and said it gave the White House opportunity to take a more careful approach to trade policy.Learning Resources, the US company that first sued the Trump administration over its reciprocal tariffs, said in a statement that the decision “is a powerful reaffirmation of the rule of law and constitutional separation of powers that our country is built upon”.“This ruling affirms what several lower courts have already concluded: the tariffs imposed under the International Emergency Economic Powers Act are unlawful,” the company said.The ruling “provides much-needed certainty for US businesses and manufacturers, enabling global supply chains to operate without ambiguity”, the US National Retail Federation said in a statement.The influential Business Roundtable, a group of over 200 executives of America’s largest companies, said that it “encourages the administration to recalibrate its approach to tariffs, focusing on targeted actions to address specific unfair trade practices and national security concerns” after this court decision, according to CEO Joshua Bolten.To effectively combat the most critical trade challenges from non-market economies, Bolten continued, “we encourage coordination between the United States and its allies. “The administration has made significant strides to strengthen America’s competitiveness by enacting pro-growth tax policies and reducing the regulatory burden,” Bolten said. “A stable trading system with more focused tariffs would help unleash America’s full economic potential.”