President Donald Trump walks previous Supreme Courtroom Chief Justice John Roberts, Affiliate Justice Elena Kagan, Affiliate Justice Brent Kavanaugh and Affiliate Justice Amy Coney Barrett as he arrives for the State of the Union handle throughout a Joint Session of Congress on the U.S. Capitol on Feb. 24, 2026, in Washington, D.C.
Win Mcnamee | Getty Photographs Information | Getty Photographs
President Donald Trump defended his tariff agenda throughout his State of the Union handle Tuesday, whilst a Supreme Courtroom ruling placing down his emergency tariffs forged recent confusion over the raft of commerce offers negotiated with international companions.
The courtroom dominated final Friday that the president had exceeded his authority by imposing tariffs on items from almost each nation on the planet beneath the Worldwide Emergency Financial Powers Act (IEEPA). Trump has mentioned he deliberate to take action once more inside the bounds of the legislation.
Nearly instantly after, Trump changed it with a ten% tariff beneath Part 122 of the Commerce Act of 1974 that took impact on Tuesday. He had additionally threatened to extend it to fifteen% tariffs beneath Part 122, however it’s unclear after they would take impact.
The ruling has raised questions on bilateral commerce agreements structured round IEEPA tariff charges, prompting international governments to reassess their positions.
″[Trading partners] made concessions in alternate for particular tariff therapy that was grounded in IEEPA. That authorized foundation not exists,” mentioned Johannes Fritz, CEO of the St.Gallen Endowment for Prosperity via Commerce.
“Whether or not the administration can reconstruct these offers beneath Part 301 or different authorities, stays to be seen, however that may take time and new authorized processes,” Fritz added.
Part 301 of the Commerce Act of 1974 requires the U.S. Commerce Consultant to conduct a proper commerce investigation into unfair commerce practices earlier than imposing tariffs.
“These international locations that have been early in placing offers with america after the Liberation Day tariffs of final 12 months have been form of left holding the bag,” Sarang Shidore, director of the World South Program on the Quincy Institute, advised CNBC “Inside India” on Monday.
“Whereas these different international locations that resisted, like Brazil and others, in agreeing to any calls for from america could also be feeling a little bit extra vindicated,” he added.
Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, mentioned international locations that didn’t negotiate tariff reductions could now profit extra.
She cited Japan, which final 12 months secured a deal decreasing reciprocal tariffs to fifteen% in alternate for a $550 billion funding pledge.
After the courtroom ruling upended Trump’s tariff agenda, “they (Japan) at the moment are paying to obtain the identical therapy as others,” Herrero mentioned.
Japan’s commerce minister Ryosei Akazawa mentioned Tuesday that the ten% common tariffs may impose “further tariff burdens on some items,” urging Washington to not deal with Japan much less favorably than beneath final 12 months’s commerce deal.
Commerce offers in limbo
Throughout his State of the Union handle, Trump claimed that “nearly all international locations and firms need to maintain the deal that they already made … earlier than the Supreme Courtroom’s unlucky involvement.”
Nonetheless, the fact is wanting a little bit totally different.
India paused plans to finalize an interim commerce deal simply days earlier than a visit to Washington, D.C. As lately as Tuesday, Indian minister Piyush Goyal mentioned his nation would resume talks when there’s extra readability.
On Monday, the European Parliament postponed a vote for a second time on the commerce deal that may set a 15% U.S. tariff charge on most EU items whereas eliminating European tariffs on many American imports, together with industrial items.
Bernd Lange, who chairs the European Parliament’s worldwide commerce committee, advised CNBC on Tuesday that the U.S. had breached the phrases of its deal and the bloc was ready to retaliate if mandatory. European officers have expressed concern concerning the newest levy, suggesting it may threaten the commerce deal signed final summer season.
EU lawmakers are anticipated to reconvene on March 4 to evaluate if Washington has clarified its place and dedication to final 12 months’s deal.
Canada additionally welcomed the ruling, with regional leaders in British Columbia and Ontario calling it a constructive step. The Premier of Ontario, Canada’s most populous province, Doug Ford, mentioned on Monday that “the partitions are closing in” on Trump and that no deal is healthier than a foul deal.
Trump has warned international locations towards backing away from beforehand agreements, saying any nation that desires to “play video games” would face a lot larger duties beneath totally different commerce legal guidelines.
In a Reality Social put up Monday, Trump mentioned he may additionally impose license charges on buying and selling companions. U.S. Commerce Consultant Jamieson Greer additionally mentioned the Trump administration expects to open new Part 301 investigations into a number of international locations, a authorized step that would pave the way in which for brand new tariffs.
Most international leaders gave the impression to be in a cautious wait-and-see mode, reassessing their positions and timing for renegotiating a number of the phrases of their agreements, given the extra restricted tariff threats Trump can credibly make now.
Mexican President Claudia Sheinbaum mentioned her authorities would rigorously evaluation the courtroom’s determination to evaluate its scope and influence.
A Chinese language Ministry of Commerce spokesperson mentioned Tuesday it’ll interact in an “trustworthy negotiation” within the subsequent spherical of bilateral talks throughout Trump’s deliberate go to on the finish of subsequent month.
Beijing mentioned it could “comprehensively assess” any growth from Washington and determine whether or not to regulate its countermeasures towards the reciprocal and fentanyl-related tariffs imposed by the U.S.
Potential ‘Plan B’
Whereas international governments weigh their responses, consideration is popping to the choices remaining for the White Home.
With tariffs beneath the IEEPA struck down, the administration is exploring different authorized pathways to protect its commerce agenda.
However assembling an alternate plan will take time, which means the tariff-fueled confusion weighing on the worldwide economic system may persist.
To this point, the Trump administration has negotiated varied agreements, frameworks, and joint understandings regarding commerce and tariffs with eighteen international locations, in keeping with Jennifer Hillman, senior fellow for commerce and worldwide political economic system on the Council on International Relations.
“The tariff panorama, and subsequently bargaining positions, stay in flux,” Hillman mentioned.
The Trump administration has indicated its plans to make use of Part 301 investigations and Part 232 of the Commerce Enlargement Act of 1962, which permits tariffs on imports deemed a nationwide safety risk, to impose new duties towards buying and selling companions.
It’s doubtless that any modifications to present agreements will unfold regularly, Hillman mentioned, noting that none are absolutely full or binding and haven’t acquired congressional approval.
— CNBC’s Lim Hui Jie contributed to this report.
