Trump's Tariff Chaos Is Back—And Markets Are Spooked

Just days after the Supreme Court ruled that President Donald Trump lacked unilateral authority to impose his sweeping "Liberation Day" tariffs, Trump found a workaround. He's now imposing a 15% global tariff under different legal authority, while Europe has hit pause on their trade deal and Wall Street braces for the return of trade war volatility.

When One Door Closes, Trump Opens Another

The Supreme Court struck down Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA), calling them an overreach of executive authority. U.S. Customs and Border Protection announced it would stop collecting these tariffs at 12:01 a.m. Tuesday.

But Trump was ready with Plan B: a 15% global tariff imposed under Section 122 of the 1974 Trade Act. The legal basis may have changed, but the economic impact remains the same. Some $150 billion in already-collected tariff revenue now faces potential refunds, though the Supreme Court left that messy detail for others to sort out.

"Trump's tariffs are dead. Long live Trump's tariffs?" seems to be the new reality.

Europe Plays the Waiting Game

The European Union's response was swift and strategic: suspend ratification of their transatlantic trade deal until they know what Trump's tariff strategy actually is. The deal, negotiated last summer between Trump and European Commission President Ursula von der Leyen, would have imposed a 15% tariff rate on most E.U. exports to the U.S. while eliminating tariffs on American industrial goods entering Europe.

European lawmakers had been aiming for March ratification. Now they're essentially saying: "We need to know the rules of the game before we agree to play."

It's a calculated move that reflects Europe's growing frustration with policy whiplash from Washington. Why sign a deal when the legal foundation keeps shifting?

Markets Smell Fear

Wall Street's reaction was immediate and telling. S&P 500 and Dow futures dropped about 0.5%, while the Nasdaq fell 0.6%. The VIX—Wall Street's fear gauge—spiked nearly 8%.

Investors remember the 2018-2019 trade war playbook: tariff announcements followed by market volatility, supply chain disruptions, and retaliatory measures. The pattern feels eerily familiar, and markets are pricing in uncertainty.

For businesses trying to plan investments, hiring, and supply chains, this legal hopscotch creates a nightmare scenario. How do you budget for tariffs when the legal authority keeps changing?

The Bigger Economic Chess Game

Beyond the immediate market reaction lies a deeper question about economic governance. Trump's willingness to switch legal justifications suggests tariffs aren't just trade policy—they're a tool of executive power that will persist regardless of court rulings.

This creates a new kind of regulatory risk for global businesses. It's not just about what the tariffs are, but about the unpredictability of how they're implemented and justified.

Other Trump tariffs, including those on steel and aluminum imposed under Section 232, remain in place. The administration seems committed to maintaining trade barriers through whatever legal avenue remains available.