SCOTUS Strikes Down Trump Tariffs; President Retaliates with 10% Global Levy

The Supreme Court’s decision to dismantle the administration’s unilateral tariff framework marks a watershed moment for the American retail and e-commerce sectors. By a 6-3 margin, the court ruled that the executive branch exceeded its constitutional and statutory authority in imposing broad global tariffs without specific Congressional approval. This ruling effectively invalidates the primary tool the administration has used to pressure trading partners over the past year, creating an immediate crisis for trade envoys who had leveraged these duties to extract concessions in ongoing negotiations. For retailers, the most immediate consequence is the legal ambiguity surrounding $175 billion in tariffs already collected, which the court suggested may have been gathered under an incorrect reading of the law.

The administration’s response was swift and combative. Within hours of the ruling, President Trump signed a proclamation invoking a separate statutory authority that allows for a temporary 10% levy on imports for up to 150 days. While this move provides a short-term workaround for the White House, it introduces a new layer of volatility for global supply chains. Unlike the previous tariffs, which were often targeted at specific sectors or nations, this new 10% duty is a near-blanket imposition on most goods, with narrow exemptions for critical minerals, metals, and energy products. This emergency measure is likely to face its own set of legal challenges, as critics argue it is a transparent attempt to circumvent the Supreme Court’s restriction on executive overreach.

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Retailers who had already adjusted their margins to accommodate the previous tariff regime must now decide whether to price in the new 10% duty or wait for potential refunds from the $175 billion pool of invalidated collections.

For the e-commerce industry, which relies heavily on predictable cross-border logistics and pricing, the ruling and the subsequent 10% levy create a planning nightmare. Retailers who had already adjusted their margins to accommodate the previous tariff regime must now decide whether to price in the new 10% duty or wait for potential refunds from the $175 billion pool of invalidated collections. The 150-day sunset clause on the new levy further complicates matters, as it prevents businesses from making long-term sourcing shifts. If the 10% duty is allowed to expire or is struck down by lower courts in the interim, companies that raised prices may find themselves uncompetitive, while those that absorbed the costs could face significant liquidity strain.

The broader market reaction reflects this uncertainty. While U.S. stock indexes initially surged on the news of the SCOTUS ruling—interpreting it as a win for free trade—those gains were largely erased as the reality of the new 10% levy set in. Analysts suggest that the trade war has simply entered a more chaotic phase where judicial intervention and executive improvisation will clash repeatedly. The $175 billion in potential refunds represents a massive fiscal liability for the U.S. government, and the process for reclaiming those funds is expected to be mired in years of litigation and administrative red tape.

Looking ahead, the retail sector must prepare for a period of policy by proclamation. The administration’s willingness to immediately pivot to alternative legal justifications suggests that the trade-related disruptions are far from over. Industry groups are expected to ramp up lobbying efforts in Congress to clarify the limits of the Trade Act, seeking to prevent future 150-day surprises that bypass traditional legislative oversight. For now, the global trade landscape remains on edge, with the Supreme Court’s attempt to restore the balance of power resulting in a temporary vacuum that the White House is determined to fill with renewed protectionist measures.