The US Supreme Court has ruled six to three that President Donald Trump exceeded his authority by imposing special tariffs on imports from dozens of countries. The tariffs, based on a 1977 emergency provision, are invalid. Trump now announces a new general ten percent tariff.
On Friday, the Supreme Court published a 170-page ruling limiting Trump's tariff policy. The reciprocal special tariffs introduced from April 2025 against individual countries could not be imposed, as Trump bypassed Congress by relying on the 1977 emergency law. The court found that this law neither permits such actions nor allows circumventing Congress. The US government has collected about 130 billion dollars from them so far.
Trump reacted disappointedly: In an online post, he called the decision 'severely disappointing' and expressed shame for some judges. At a press conference, he announced an additional ten percent base tariff on all goods. The court left open whether the government can use other mechanisms in the future, which would require longer proceedings in Congress or courts.
Not all tariffs are affected: Base tariffs and product-specific duties on steel, aluminum, and automobiles remain in place. According to Yale University's Budget Lab, average tariffs fell from 17 to 9.1 percent. Refunds for importers are unclear; Congress could approve them, or lower courts would decide in individual cases, potentially leading to chaos.
For the German economy, export costs to the US initially decrease, but uncertainty persists. German imports declined last year. Ifo head Clemens Fuest praised the ruling as confirmation of checks and balances but warned of increased uncertainty from possible product-specific tariffs. The EU Commission is analyzing the decision and advocating for low tariffs. Economists like Yale's Penny Goldberg see limited direct impacts but highlight the costs of uncertainty. Morgan Stanley analysts forecast modest GDP growth from refunds, about 0.2 percent with 80 percent refunds.
