The United States Supreme Court ruled that Donald Trump lacked authority to impose broad tariffs without Congress, with Chief Justice John Roberts stating the law did not grant such power. Markets and officials in the European Union, Canada, and United Kingdom reacted cautiously, while investors in the United Arab Emirates watch economic conditions and the role of the Federal Reserve.
The United States Supreme Court has struck down a key part of Donald Trump’s global tariff policy, ruling that the president overstepped his authority by imposing broad import duties without approval from Congress. The decision blocks one of the main economic tools used by the administration and reinforces that the power to impose taxes and tariffs rests with lawmakers, not the executive branch.
The ruling stated that the International Emergency Economic Powers Act does not grant the president authority to introduce tariffs. Chief Justice John Roberts noted that if Congress intended to give such sweeping powers, it would have clearly stated so in the law. The court described the issue as a “major questions” case, emphasizing that policies with large economic consequences require explicit congressional authorization.
Earlier lower-court decisions had already found most of the broad tariffs unlawful, but enforcement had been paused during appeals. The Supreme Court’s ruling now finalizes the legal position, effectively ending the dispute over those measures.
Despite the setback, Trump quickly announced a new plan to impose a 15% tariff on global imports, up from the earlier 10%, calling the court’s decision “deeply disappointing.” Under existing trade rules, the new tariff would be temporary and limited to 150 days. The White House also confirmed that exemptions remain for certain sectors, including pharmaceuticals and goods covered under regional trade agreements, while existing sector-specific tariffs on steel and aluminium remain unchanged.
International reactions were cautious. Officials from the European Union said they are reviewing the implications of the decision, while Canada and the UK emphasized the need for stability in global trade relationships. Analysts warned that sudden tariff shifts can disrupt supply chains and investor confidence.
Financial markets reacted moderately. US stocks recovered after early losses, reflecting investor expectations that reduced trade restrictions could support corporate earnings. However, economic data showed slower growth and persistent inflation, factors that may limit policy flexibility for the Federal Reserve.
Experts say tariffs have effectively acted as a tax on importers, with businesses often passing costs to consumers. Although tariff collections have increased significantly in recent years, they still represent a small portion of total government revenue.
For investors in the United Arab Emirates, the development is seen less as a shock and more as a policy adjustment. Market participants are balancing the possibility of reduced trade tensions against ongoing economic uncertainty and geopolitical risks. Analysts note that clarity in trade policy, along with continued investment in emerging sectors such as advanced technology, could help stabilize markets despite political shifts.
source: Gulf News
image source: TV9 Bharathvarsh
