US Supreme Court ruling offers little respite for global economy

Highlights:

• US Supreme Court ruling ushers in new uncertainties
• Global economy had broadly held up to Trump tariffs
• Bilateral US trade deals may now be reviewed

While the US Supreme Court's ruling on Friday against President Donald Trump's use of tariffs marks a clear setback for his use of trade levies as an economic weapon, analysts say it offers little immediate relief for the global economy.

Instead, they expect another bout of activity-crimping confusion combined with near-certainty that Trump will seek other means to replace the raft of global tariffs now struck down as unlawful.

In the meantime, a long list of uncertainties remains - including what new tariffs Trump will seek to impose, whether the funds from the annulled levies will have to be refunded, and whether territories that entered deals with the US to mitigate their impact will see those pacts reopened for review.

Responding to the ruling, Trump announced new global tariffs of 10% for an initial 150-day period and acknowledged it was not clear if or when there would be any refunds.

"In general, I think it will just bring in a new period of high uncertainty in world trade, as everybody tries to figure out what the US tariff policy will be going forward," said Varg Folkman, analyst at the European Policy Centre think tank.

"In the end it's going to look pretty much the same."

Economists at ING bank agreed: "The scaffolding has come down, but the building remains under construction. No matter how today's ruling reads, tariffs are here to stay."

Friday's ruling concerns only the tariffs launched by Trump on the basis of the International Emergency Economic Powers Act, or IEEPA, intended for national emergencies. So far, they are estimated to have brought in over $175 billion in funds.

By itself, the ruling chops the trade-weighted average US tariff almost in half from 15.4% to 8.3%, trade policy monitor Global Trade Alert estimated.

For those countries on higher US tariff levels, the change is more dramatic. For China, Brazil and India, it will mean double-digit percentage point cuts, albeit to still-high levels.

Bilateral deals with US could now 'unravel'

Yet no one expects this to remain the status quo: the Trump administration has served notice long before the ruling that it can and will use other legal vehicles to reimpose tariffs.

At the same time, the couple of dozen countries which entered bilateral deals with the US to set tariffs and in some cases invest in the United States - will now assess whether the Supreme Court ruling gives them leverage to renegotiate.

The lawmakers who must ratify the European Union's pact with the United States will do that as soon as Monday, said Bernd Lange, chair of the trade committee of the European Parliament.

"The era of unlimited, arbitrary tariffs ... might now be coming to an end," Lange said on X. "We must now carefully evaluate the ruling and its consequences."

Britain meanwhile expects its privileged trading position with the United States to continue, the government said on Friday of the baseline 10% tariff it agreed with Washington.

Indeed, many countries were learning to live with Trump's tariffs, the bulk of which were being shouldered by Americans, according to a Federal Reserve Bank of New York report released this month.

In the most recent update of its regular World Economic Outlook, the International Monetary Fund forecast global growth at a "resilient" 3.3% in 2026.

China even reported a record trade surplus of nearly $1.2 trillion in 2025, led by booming exports to non-US markets as its producers adapted to the Trump onslaught.

Thus, some countries may choose to stick with their existing bilateral deals with the US rather than "inviting the kind of uncertainty we saw in the spring in 2025," EPC's Folkman said of the chaos caused by Trump's so-called "reciprocal" tariffs.

Conversely, Niclas Poitiers, research fellow at the economic think tank Bruegel, noted there were a lot of political question marks over the EU-US trade deal, in which Europe was seen to have backed down and got the short end of the stick.

"There could be circumstances in which the deal unravels," he noted.