Trump Vows New 10% Tariffs After Supreme Court Loss

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Alex Ossola (0:33)

New economic data show that growth slowed and inflation rose at the end of last year. Plus, the Supreme Court rules that President Trump's global tariffs are illegal. President Trump responds with more tariffs.

Donald Trump (0:45)

Other alternatives will now be used to replace the ones that the court incorrectly rejected. We have alternatives, great alternatives. Could be more money. We'll take in more money and we'll be a lot stronger for it.

Alex Ossola (0:59)

And meet the Republican Congresswoman pushing back on Trump's immigration policies. It's Friday, February 20th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today. The US. Supreme Court ruled today that President Trump's tariffs are illegal. In its six to three decision, the justices found that the president went too far in enacting his most sweeping tariffs without clear authorization from Congress, the first time the Supreme Court has definitively struck down one of Trump's second term policies. For more on the implications of the ruling, I'm joined now by WSJ Economic Policy reporter, Gavin Bade. Gavin, the case involved two categories of tariffs, one that Trump imposed on pretty much every country in the world, ostensibly to repair trade deficits, and the other on Mexico, Canada and China connected to fentanyl. Are there tariffs that aren't affected by this ruling?

Gavin Bade (1:54)

Yes. Notably, Trump's tariffs on individual industries. Those are like the tariffs on steel and aluminum, on cars and car parts, on trucks, on copper, on lumber. Those are under a different legal authority, completely unrelated to this case. Those remain in place.

Alex Ossola (2:12)

Did the ruling say what happens to the tariff that companies have already paid?

Gavin Bade (2:18)

No, it did not. And that is a big point of contention here. You have over a thousand companies that have already filed in court saying, we want refunds if these tariffs are struck down. The Supreme Court did not weigh in to say what happens. This means that it will probably be litigated in lower courts. And the president said at a press conference that you'll probably be in court for five years sorting this out. So whether or not that means that they're going to fight this tooth and nail for that long, I am not sure. But there's no easy resolution to the refunds issue at least in the short term.

Alex Ossola (2:51)

Speaking of that press conference, another thing that came out of it was that President Trump announced new tariffs, including a 10% global tariff with a different legal basis. Do we at this point expect those to stand?

Gavin Bade (3:03)

At this point, I think those tariffs, the new ones he announced, are more legally defensible than the ones that were struck down. So he announced there's two sets of tariffs that he's talking about. The first one, it's under what's called Section 122 And this allows the president to impose tariffs for up to 150 days. It's very time limited. He said we will impose a 10% tariff across the globe. So kind of reinstituting his global minimum tariff that he had done under IEPA, the International Emergency Economic Powers Act. So that tariff authority will act as a stopgap while they get other tariffs ready. And those other tariffs will come under what's called Section 301 of the Trade Act. That is also a very legally defensible option. There are many tariffs already on the books under Section 301 It's also what Trump used in his first term for tariffs on China. But the whole thing is you have to do an investigation. You have to gather evidence. You have to write a report. So that all takes time. Trump wants to do these things immediately. So he has this kind of one, two step. Okay, we've got our temporary tariffs, and then we will come back and have the longer lasting ones later.

Alex Ossola (4:15)

How does this really affect how companies will operate in this tariff environment?

Gavin Bade (4:20)

I don't think it will affect a lot in the short term, right? No one's going to make major investment decisions or maybe even shipping decisions based on this. There's still a lot of work to be done here and a lot of open questions as to how they will try to reconstitute this tariff regime. I think what he was trying to tell international markets and governments abroad is that even if it's not under this law, you can be sure of one thing and that's I'm going to have tariffs on you.