Economy News

Supreme Court strikes down Trump's emergency tariffs 6-3; stocks rise, refunds left unclear

The US Supreme Court ruled 6-3 on Friday 20 February that the 1977 International Emergency Economic Powers Act (IEEPA) does not allow the president to impose tariffs, striking down Donald Trump's sweeping global levies. GV Wire, carrying Reuters, notes the court did not say anything about refunds.

Markets rose. Reuters had the S&P 500 up 0.6% and the Nasdaq 1% at last check, with European car shares and US-listed shares from South Korea to India rallying; the dollar index slipped to 97.67. Malay Mail, carrying AFP, says the S&P 500 closed up 0.7% and that London's FTSE 100 and Paris's CAC 40 hit records. Trump said he was “absolutely ashamed” of some justices and vowed to impose a uniform 10% tariff under a different legal authority.

“The biggest uncertainty was whether the court would address refunds, which they did not.” — Tom Graff, Facet, via GV Wire

On NPR (via WUKY), KPMG chief economist Diane Swonk said the IEEPA tariffs are “over half of the tariffs that have been levied”, that refunds will be messy, and that many small and mid-size firms may get none.

How each outlet framed it

• GV Wire (Reuters) — the investor view: a modest rally, analysts expecting a backup plan, and the Cato Institute saying the government must refund “tens of billions of dollars”.
• Malay Mail (AFP) — the political fight: Trump's attack on the justices, his new 10% plan, and US growth of just 1.4% in the fourth quarter against a 2.5% forecast.
• NPR — the businesses: who can claim refunds, and Swonk's expectation of new tariffs “almost immediately” under other powers.

What we don't know yet: whether and how importers get their money back, and how quickly replacement tariffs arrive.