Tariffs: First 20%, then 50%, then 100%, then 150%, then 10%, then canceled, then 10%, then 15%.

The Supreme Court of the United States overturned a major part of Donald Trump’s tariff policy. The United States may have to return up to $175 billion to importers. And within less than 24 hours, Trump responded by imposing a new global tariff. First 10%. Then 15%.

We are talking about a reversal that could bring major changes to global trade.

THE DECISION

By a 6 to 3 vote, the Supreme Court ruled that Trump relied on the wrong legal basis to impose his tariffs. He had based them on the IEEPA, the International Emergency Economic Powers Act. This is a law that allows the President to regulate economic transactions during a national emergency. However, the law does not mention anywhere that it authorizes the imposition of tariffs.

The Court was clear: tariffs are a form of taxation. And under the U.S. Constitution, the power to impose taxes belongs to Congress. In simple terms, the President cannot impose taxes on his own. To do so, he needs clear authorization from the legislative branch.

The justices also emphasized that no President before Trump had ever used the IEEPA to impose tariffs on such a scale and with such breadth. That alone shows how far stretched that interpretation of executive authority was.

Why is this so important? Because tariffs were not a secondary policy tool. They were the core of Trump’s economic strategy. They were his main negotiating leverage against China, the European Union, Canada, and Mexico. They were the mechanism through which he pressured trade partners and sought to bring manufacturing back to the United States.

With a single decision, a very large part of that policy collapsed. It is estimated that around 60% of the tariffs in effect were based on the IEEPA. This means the average U.S. tariff rate dropped from about 9.5% to 5%. That is a massive shift in trade policy.

But the story does not end there.

THE REFUNDS

According to the Penn Wharton Budget Model, the United States may have to return up to $175 billion to importers who paid tariffs under the IEEPA. The Customs Service had already collected more than $133 billion by December, and since then, the amount has increased.

The Supreme Court did not explicitly order refunds. It did not say “return the money.” But it also did not say that the government can keep it. This ambiguity creates significant legal and fiscal uncertainty.

And here lies the real issue. Many companies that paid these tariffs had already passed the cost on to consumers through higher prices. If the government now refunds the money to importers, who refunds the consumers? No one.

THE RESPONSE

This is where the reaction came from the other side.

Trump did not wait even a day. Just hours after the Court’s decision, he announced a new global tariff of 10%, this time based on Section 122 of the Trade Act of 1974. This law allows the President to impose temporary tariffs for up to 150 days.

It is not a permanent tool, but a temporary measure replacing the tariffs that were struck down. The administration made it clear that we should not expect a reduction in total tariff revenue, as other legal pathways will be used.

And before the situation had time to settle, the very next day he announced an increase in the global tariff from 10% to 15%, effective immediately. There was no detailed plan and no clear implementation timeline, but the message was clear: tariffs remain a central policy instrument.

What does this mean? Continued uncertainty. Businesses do not know what the final tariff level will be in a few months. Investors do not know whether trade tensions will escalate or de escalate. And as a result, markets are likely to experience significant volatility.