Last week, the US Supreme Court ruled in a 6-3 decision that President Donald Trump exceeded his powers when he implemented tariffs under the International Emergency Economic Powers Act (IEEPA). This landmark decision has significant implications for the administration's trade policy, as it limits the President's ability to unilaterally impose tariffs without congressional oversight. The court's ruling is seen as a setback for Trump's trade strategy, which has relied heavily on executive authority to impose tariffs on imports.

Shortly after the ruling, the US administration announced its intention to base future tariffs on Section 122 of the Trade Act of 1974, which allows the President to impose temporary import tariffs of up to 15 percent for a period not exceeding 150 days in response to significant payment balance problems. Initially, Trump had announced a broad 10 percent tariff, later raising it to the maximum of 15 percent. Although the 10 percent tariffs went into effect, the processes to increase tariffs further seem to have stalled due to the Supreme Court's decision.

This development raises questions about how the administration will navigate trade policy moving forward, especially in light of the limitations imposed by the Supreme Court's ruling. While the administration is attempting to adapt by shifting to a different legal basis for tariffs, the ruling may still impact the overall trajectory of US trade policy. The outcome could also signal to Congress and other stakeholders that presidential authority in trade matters is not as unchecked as previously believed, potentially leading to more legislative scrutiny of tariffs in the future.