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The U.S. Supreme Court struck down President Donald Trump’s sweeping global tariffs on Thursday, ruling 6-3 that the administration exceeded its legal authority under the International Emergency Economic Powers Act (IEEPA). The landmark decision triggered an immediate surge in equity markets, with the technology-heavy Nasdaq 100 and Philadelphia Semiconductor Index erasing weekly losses to reach session highs as investors weighed the prospect of lower import costs and reduced trade uncertainty.
Key Points
- The Supreme Court ruled 6-3 that the executive branch cannot use IEEPA to bypass Congress and impose broad trade taxes, effectively voiding tariffs ranging from 10% to 50%.
- Equity markets rallied on the news, with major tech firms including Apple, Amazon, and Nvidia leading the gains.
- The Trump administration is reportedly preparing a "Plan B" to maintain trade pressure using alternative authorities, such as Section 232 and Section 301.
- In a separate legal development, the state of West Virginia filed a lawsuit against Apple, alleging the company failed to prevent the distribution of illegal material on its iCloud platform.
The SCOTUS Ruling and Immediate Market Reaction
The Supreme Court’s decision centers on the administration's use of IEEPA to enact a "paramount policy" of the Trump presidency. The court found that while the act provides the President with emergency powers, it does not grant the authority to unilaterally impose taxes in the form of broad-based tariffs. Writing for the majority, the court clarified that the authority to tax remains a congressional prerogative, despite the administration’s framing of trade imbalances as a national emergency.
Financial markets reacted swiftly to the ruling. The Nasdaq 100, which had been on track for its fourth consecutive weekly decline, reversed course to push into positive territory. Treasury yields moved higher, with the 10-year yield rising to 4.09%, while the U.S. dollar softened. Market analysts suggest the rally reflects a "tax cut" sentiment, as the average effective tariff rate for consumers is expected to drop from a projected 17% to roughly 9.1%.
"This is a tax cut. Tariffs are taxes and tariffs are going to be lower than they otherwise would have been. At the margin, this is a positive thing for U.S. growth and nominal GDP growth," said Scott Ladner, Chief Investment Officer at Horizon Investments.
The ruling specifically voids the "April Liberation Day" tariffs that targeted imports from Canada, Mexico, and China. However, the decision does not impact duties enacted under separate authorities, meaning existing tariffs on steel, aluminum, and certain automotive components remain in place for now.
Administration Response and "Plan B" Strategies
President Trump reportedly labeled the Supreme Court’s decision a "disgrace" and signaled that his economic team, including Treasury Secretary Peter Navarro and Trade Representative Jamieson Greer, would pivot to alternative legal avenues. Experts anticipate the administration will now lean heavily on Section 232 (national security), Section 301 (unfair trade practices), and Section 122 of the Trade Act of 1974.
While these alternative statutes allow for tariff imposition, they often require lengthy investigations and have lower caps on maximum rates compared to the "blunt tool" of IEEPA. This shift could create new hurdles for the administration's trade agenda, particularly as the President prepares for a high-stakes visit to China scheduled from March 31 through April 2.
The Role of "Trusted Technology"
Beyond traditional tariffs, some analysts argue the administration is shifting toward a diplomacy model based on "trusted innovation." During recent summits, U.S. officials have emphasized building tech-centric alliances with partners like India and Japan to counter Chinese influence.
"Revamping our trade relationships is taking place... We have tariffs as a tool and trusted innovation as a tool, and I think that will be the future of American diplomacy," stated Michelle Giuda, former Assistant Secretary of State.
Apple Faces Dual Pressures: Tariffs and Litigation
Apple finds itself at the center of two major news cycles. While the SCOTUS ruling provides a potential financial reprieve—the company has paid approximately $3 billion in tariffs over the last year—it is now facing a significant legal challenge from West Virginia. Attorney General J.B. McCuskey filed a lawsuit alleging that Apple knowingly allowed its iCloud platform to be
