Trump Overhauls Trade Strategy After “Liberation Day” Tariffs Fail
US President Donald Trump expressed anger after the Supreme Court rebuked his use of emergency powers to impose the largest import tariff hike since the 1930s. In a closed-door meeting with governors across party lines, Trump called the February 20 ruling a “disgrace,” according to a CNN report.
The ruling invalidated the 1977 law used as the basis for collecting import taxes, which is said to account for nearly two-thirds of the estimated $200 billion in tariff revenue collected through 2025. Ahead of the ruling, Trump had warned that limiting his powers would trigger an economic crisis similar to 1929 and eliminate “trillions of dollars” he said could be used to reduce the US public debt.
The 6-3 Supreme Court decision directly targeted Trump’s favorite tool: emergency powers to act quickly without the long legislative process. Consequently, Trump’s ability to threaten sudden tariffs—for example, against Europe over the Greenland issue, or against countries doing business with Iran—has become far less convincing in the eyes of the international community.
More broadly, this ruling sends a message that Trump's foreign and trade policy ambitions remain limited domestically. In other words, the pressure card he has used to force concessions from other countries can no longer be used as quickly and unilaterally.
However, this Supreme Court defeat also opens up political maneuvering for Trump. What may seem like a setback could actually be an opportunity to "repackage" tariffs, which have recently become unpopular with the public. A December NPR-PBS News-Marist poll found that only 36% of Americans approve of Trump's handling of the economy, while about two-thirds of respondents worry that tariffs will burden their finances.
However, tariffs are not completely gone. Government officials and trade experts believe the president still has other avenues of authority to reinstate tariffs within weeks—though none as broad and swift as the emergency tools now restricted. The "Liberation Day" tariffs, which used those emergency powers, are now considered constitutionally unconstitutional.
In fact, even before the court ruling, the Trump administration was said to have quietly begun relaxing some import taxes, responding to public outcry over rising prices of essential goods and lobbying by CEOs. The government is also reviewing the implementation of steel and aluminum import duties to minimize the impact on consumer goods, postponing tariffs on several categories, and preparing compensation schemes such as assistance for farmers and the idea of a "tariff dividend."
Government officials emphasized that the adjustments are not a sign of retreat, but rather part of a larger trade negotiation project. U.S. Trade Representative Jamieson Greer said there has been an internal view from the beginning that a "reset" would occur, while emphasizing that the government still wants to use tariffs to manage economic relations and reduce the trade deficit—with "other tools" still available.
Source: Newsmaker.id
