In a significant ruling on June 20, the U.S. Supreme Court decided, in a 6-3 vote, that President Donald Trump's extensive use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on trading partners exceeded his constitutional authority. Chief Justice John Roberts noted that the Constitution grants taxation and tariff powers exclusively to Congress, and the IEEPA does not clearly delegate tariff imposition to the President. This ruling has implications for tariffs imposed on countries including South Korea, although tariffs related to the Trade Expansion Act’s Section 232 remain unaffected.

In immediate response to the ruling, President Trump sought an alternate route by signing a measure utilizing Trade Act Section 122, allowing him to impose a 10% tariff on all imports based on serious international trade deficits. Remarkably, within a day, he escalated this tariff to 15%. Trump emphasized his commitment to increasing revenue from tariffs and directed the trade representative to investigate under Trade Act Section 301, which permits tariff increases if foreign policies are deemed harmful to U.S. commerce. Moreover, he indicated that new, legally permissible tariffs would be announced in the coming months in a bid to transition to a more structured and long-term tariff system.

This ruling significantly heightens uncertainty in the global trading environment, as a complete and immediate halt to tariffs based on the IEEPA was introduced while allowing for the application of Section 122 tariffs. Industry analysts and trading partners expressed concern over the inability to predict the trajectory of U.S. trade policy, especially concerning ongoing trade negotiations and foreign investment commitments. The complexities of current international trade relations, coupled with Trump's aggressive tariff strategies, suggest a continuing state of flux in the global economy and heightened tensions among trading nations.