The wait continues for the Supreme Court’s judgement on the legality of President Trump’s IEEPA-invoked tariffs. If those tariffs are ruled to be illegal, we think Trump will be able to replace a lot of the lost revenues by broadening the scope of his product-specific tariffs, but he will no longer have the freedom that the IEEPA gave him to raise and lower tariffs at will. For example, he would no longer be able to threaten a 25% tariff on countries that trade with Iran, as he did earlier this week. Some of the “deals” he has already agreed may fall apart and it would leave him with a weaker hand for the upcoming USMCA negotiations.
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