The Donald Trump administration is preparing new trade investigations to maintain its tariff policy after a severe defeat before the Supreme Court. The ruling undermining tariffs imposed under emergency powers has caused chaos in stock markets and uncertainty in global supply chains. Investors are massively fleeing towards safe assets, which has driven gold prices to the highest levels in three weeks, while the European Union warns of a breach of international agreements.

Failure of Existing Tariffs

The Supreme Court ruled that tariffs imposed under IEEPA exceeded statutory authority, forcing their suspension.

New 10 Percent Tariff

Donald Trump instructed the administration to impose a new global fee based on Section 122 of the Trade Act.

Gold as a Safe Haven

Trade uncertainty caused gold prices to rise to the highest level in three weeks alongside a flight from stocks.

Risk of Billion-Dollar Refunds

The Democrats' bill proposes paying 175 billion dollars in refunds to companies harmed by illegal tariffs.

The U.S. Supreme Court's decision to undermine the legal basis of the existing tariff policy has led to an unprecedented paralysis in the American administration. Supreme Court ruled that the president exceeded his statutory authority by imposing restrictions without explicit consent from Congress. In response, the administration announced it will stop collecting tariffs deemed illegal by the end of this week. However, Donald Trump almost immediately announced the introduction of a new global tariff based on Section 122 of the Trade Act, whose rate was quickly raised to 15%, which experts interpret as an attempt to circumvent the ruling. This triggered a sharp sell-off in stock markets, hitting particularly hard the trade sector and companies dependent on foreign suppliers. The situation has deep financial and political implications. Democratic Party senators presented a bill intended to force the government to pay refunds to companies harmed by the invalidated tariffs. The estimated amount of refunds could reach up to 175 billion dollars, which would constitute a gigantic burden for the federal budget. Meanwhile, the Congressional Budget Office plans to revise fiscal estimates, incorporating the president's new plans for tariffs based on national security. CBO warns that prolonged uncertainty could permanently lower GDP growth dynamics. A historical precedent for the current dispute is 1935, when the U.S. Supreme Court struck down key elements of Franklin D. Roosevelt's New Deal program, leading to an open conflict between the executive and judicial branches and a controversial attempt to change the court's composition.Pessimism prevails in global markets. Indexes in London and New York recorded declines, and the European Central Bank signals the need for flexibility in interest rate policy in the face of the upcoming trade shock. ECB is monitoring the situation, fearing that new trade barriers will translate into higher inflation in Europe. The European Union has officially warned Washington that the planned tariffs violate existing trade agreements, which could result in painful retaliatory sanctions targeting U.S. exports. „ECB must be agile when setting interest rates.” — Christine Lagarde Financial Markets: Inflow to EM funds: 1.2, Planned tariff refunds: 175, New global tariff: 10 175 mld zł — potential refunds for illegal tariffs Tariff Crisis Timeline: 20 lutego — Supreme Court Ruling; 23 lutego — Market Reaction; 24 lutego — Trump's New Announcements

Mentioned People

  • Donald Trump — U.S. President seeking to impose new trade tariffs despite the court ruling.
  • Christine Lagarde — Head of the European Central Bank warning about the impact of tariffs on monetary policy.