Donald Trump’s trade policies face challenges from US Supreme Court

 
Inflation data from US regulators shows tariffs have started to gradually raise some prices, particularly for goods that are almost exclusively imported, such as shoes and furniture. The US Supreme Court could undo Trump’s signature economic policy.

Many Americans worried about high prices might expect some relief if a deeply skeptical Supreme Court reins in President Donald Trump’s tariffs. If you’re among them, don’t get your hopes up.

The Supreme Court could also provide a narrower ruling, authorizing targeted tariffs but not global measures. In a consequential Supreme Court case on Wednesday, a majority of the justices expressed concern that Trump may have overstepped his authority in levying tariffs with practically zero limits. Trump has imposed enormous import taxes in a number of unprecedented ways: He placed tariffs high enough to effectively serve as a temporary embargo on all Chinese goods, retaliated against Brazil’s conviction of its former president and Trump ally Jair Bolsanaro, and pressured India to ditch Russian oil.

Those tariffs have begun to raise prices for Americans, who ranked the cost of living as the most important issue facing the country in a new CNN poll conducted by SSRS. Nearly three quarters (72%) of Americans say the US economy is in bad shape, and 61% say Trump’s policies have made economic conditions worse.

The Supreme Court may ultimately rule the bulk of Trump’s tariffs – his signature economic policy – to be illegal. But that wouldn’t give Americans much of a breather: Tariffs haven’t raised prices as much as you may think. And Trump has other tools to raise tariffs even if the Supreme Court rules against him. The US government’s inflation data shows tariffs have started to gradually raise some prices, particularly for goods that are almost exclusively imported, such as shoes and furniture. Still, the overall pace of price hikes has been far from dramatic. Annual inflation rose to 3% in September, the highest rate since January but far from the 9% rate during the post-pandemic inflation crisis.

Businesses have chosen to pay roughly 80% of the tariffs’ cost – for now – according to a recent JP Morgan analysis. And what you’re not feeling in your pocket, you may be feeling in your job prospects: That hit to companies’ profit has contributed to America’s slowing job market, JPMorgan economist Michael Hanson says.

The US has benefited from size and leverage asymmetries, but as trade partners adapt to new realities these advantages will fade. Without clear strategy and disciplined implementation, Washington risks squandering long-term advantage – not for lack of tools at its disposal, but for want of credibility and durable partnerships.