On February 20th, the US Supreme Court declared that a significant portion of the tariffs introduced by President Donald Trump during his second term was illegal, effectively dismantling a core element of his economic agenda aimed at protecting American industries. This decision is critical in shaping the international trade landscape, as it undermines Trump's previous efforts to levy what were termed 'retaliatory' tariffs on practically all imported goods into the US. Notably, however, the ruling does not affect tariffs imposed on specific sectors, including automotive, steel, aluminum, and pharmaceuticals, which means that some protective measures will still be in place.

In response to this ruling and amid ongoing uncertainty, President Trump announced a new global tariff of 10%, set to be implemented on February 24th for a duration of 150 days. This new decree indicates the administration's intent to continue exerting influence over international trade, regardless of the Supreme Court's judgment. The move is likely to raise further concerns both domestically and internationally, as countries engaged in trade with the US may face disruptions and retaliation, complicating global economic relations and potentially leading to a chain reaction of tariff implementations or alterations.

The financial implications of these tariffs are also significant, particularly concerning compensations for businesses and industries affected by both the original and the newly imposed tariffs. According to Gregory Daco, Chief Economist at EY-Parthenon, the legal ruling has direct consequences which might instigate discussions surrounding compensations for businesses harmed by the now overturned tariffs. As the global market continues to react to these changes, stakeholders are left grappling with the broader impacts on trade agreements and economic stability, essential for fostering predictable and beneficial international commerce.