As Tariffs Shift Again, The Only Thing That's Certain Is Uncertainty

Key Takeaways

• The demise of President Donald Trump’s emergency tariffs and the imposition of a fresh set of import taxes fueled fresh uncertainty about trade policy.
• Uncertainty has been blamed for slowing down the U.S. economy and discouraging businesses from hiring and expanding, contributing to a job market slowdown last year.
• Among the unresolved questions is whether Trump’s new tariffs will withstand legal challenges.

The tariff chaos that rattled the U.S. economy in 2025 is back with a vengeance.

On Saturday, President Donald Trump announced a 15% worldwide tariff, replacing the 10% global tariff he had announced less than 24 hours before in the wake of the Supreme Court’s decision overturning many of the import taxes Trump imposed last year using emergency powers. For economists and business leaders, the details of the new tariff were murky, but the message was clear: it’s impossible to know who will have to pay tariffs, and how much, from one day to the next.

“I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level,” Trump posted on social media Saturday morning. “During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinarily successful process of Making America Great Again - GREATER THAN EVER BEFORE!!!”

Trump’s announcement set off speculation about what other tariffs he will impose to replace the ones the Supreme Court struck down, whether they will be higher or lower than the old ones, whether his new tariffs will end up in court, and whether the government will have to refund companies for the import taxes they already paid. It deepened a sense of uncertainty that has already had a significant impact on the economy: economists and business leaders say uncertainty is a major reason employers have curtailed hiring, making 2025 the worst year for the job market outside of a recession in more than two decades.

What This Means For The Economy

Uncertainty about the future tends to suppress job growth and economic activity, as it makes long-term planning difficult for any business.

“The key issue for markets is not just the tariff level itself, but the unpredictability surrounding what comes next,” Daniela Hathorn, senior market analyst at Capital.com, wrote in a commentary.

Analysts blamed the fresh dose of uncertainty for Monday’s slide in stock prices.

The Supreme Court ruling and Trump’s initial response likely left tariffs at a lower overall level than they were before, at least for the time being. U.S. importers are now paying an effective tariff rate of 13.7% between all the various tariffs still in effect after the ruling, down from 16% before the ruling, according to an analysis by the Yale Budget Lab.

However, Trump said his administration is pursuing additional tariffs under authorities that were unaffected by the ruling. One of those other powers, Section 301 of the Trade Expansion Act, requires the administration to complete an investigation into unfair trade practices before levying a tariff. On Friday, Trade Representative Jameison Greer said the administration was launching Section 301 investigations and carrying them out on an “accelerated timeframe.”

The durability of the new 15% tariff was also up in the air on Monday. Trump said the action was based on the authority given to him by Section 122 of the Trade Expansion Act, which allows the president to temporarily impose tariffs for 150 days. Whether he would attempt to extend the tariffs beyond the 150-day mark was unclear. In addition, the new trade measure could be open to legal challenges: several legal experts said Section 122 applies tariffs only to “balance of payment” deficits, not general trade deficits, and that the 15% global tariff is on shaky legal ground. Trade experts say it’s not possible for the U.S. to have a balance of payment deficit since the end of the Bretton Woods system in the 1970s.

Related Education

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“It won’t be easy to argue that the U.S. currently has a balance of payment crisis as, by definition, the balance of payments is always in balance,” Carsten Brzeski, global head of macro, and James Knightley, chief international economist at ING, wrote in a commentary.

The latest developments also brought into question trade agreements Trump signed with other countries, which imposed tariffs based on the basis the Supreme Court ruled illegal. In particular, Trump’s deal with the European Union has a new cloud of uncertainty hanging over it.

“It now remains unclear whether the Parliament will push for a full renegotiation of the deal,” Knightley and Brzeski wrote. “Uncertainty is back, and given the latest muscle-flexing by European leaders, the risk of escalation is now higher than it was a year ago.”

In a separate social media post Monday, Trump threatened U.S. trading partners with “much higher” tariffs if they were to “play games” with trade deals in the wake of the ruling.

Rather than resolving the case, the Supreme Court’s ruling and its aftermath have raised more questions than answers for anyone wondering what import taxes they’ll have to pay in the coming months.

“Trade uncertainty is not fading,” Bob Schwartz, senior economist at Oxford Economics, wrote in a commentary. “It is merely shifting form.”

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