In a surprise move, former President Donald Trump has announced that he has signed an executive order imposing a new 10% global tariff, directly defying a recent Supreme Court ruling that struck down his previous sweeping tariff policies as unlawful.
What this really means is that Trump is doubling down on his protectionist trade agenda, even in the face of a major legal defeat. By invoking a different legal authority - the Trade Act of 1974 - the former president is clearly attempting an end-run around the Supreme Court's decision, which found that he had exceeded his powers under the International Emergency Economic Powers Act.
Escalating the Trade War
The bigger picture here is that Trump appears intent on reigniting the trade war, even as the economy and financial markets had begun to stabilize after years of uncertainty. This new tariff could drive up costs for consumers and businesses, and invite retaliation from trading partners, potentially derailing the fragile recovery.
As Reuters reports, the former president was "ashamed" of the Supreme Court justices who ruled against him, accusing them of being "unpatriotic and disloyal to our Constitution." This combative rhetoric suggests Trump has no intention of backing down, setting the stage for a renewed clash between the executive and judicial branches.
Only time will tell if this move by Trump will withstand legal scrutiny. But in the meantime, businesses and consumers should brace for the potential fallout, as the spectre of an intensified trade war once again looms over the US economy.