Trade policy has moved back into focus amid fresh court rulings and updated tariff guidance. Although tariffs remain a key policy lever, investors appear to be weighing these developments alongside several competing macro and geopolitical forces. Recent activity offers insight into how markets are digesting tariffs within a broader global context.
What’s the Latest With Tariffs?
- The Supreme Court struck down the administration’s use of the International Emergency Economic Powers Act to implement tariffs―a blow to one of the administration’s key goals.
- But tariffs aren’t going away. President Donald Trump said he would impose tariffs of up to 15% for 150 days on countries with persistent trade imbalances with the US. The move is permissible under different legal authorities, and additional country or sector tariffs may still be enacted. This would bring the effective tariff rate to roughly 14%, down from about 16%.
- Market response? On the day of the Supreme Court decision, US equities were up slightly, international and emerging‑market (EM) equities moved higher, rates rose modestly, the US dollar declined, and gold moved higher.
Market Response and Economic Implications
- The US market was almost unmoved by the tariff decision because it was widely expected. Markets have largely “been there, done that,” having seen tariff headlines before that often include carve‑outs, exceptions, and adaptation.
- Plus, tariffs have been drowned out by other news: possible AI spillover following the recent software sell-off, questions surrounding private credit, the possibility of a US strike on Iran, and more.
- Economic implications? On the plus side, the tariff announcement comes as a modest relief for consumers and small businesses. On the downside, this may increase the US deficit and elevate uncertainty.
