Trump Announces 10% Global Tariff After Supreme Court Limits Emergency Powers
Former U.S. President Donald Trump announced a new 10% global tariff to take immediate effect after the U.S. Supreme Court ruled that he could not use emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose tariffs during peacetime. The court held that IEEPA had not historically been used to levy tariffs and emphasized that Congress holds exclusive taxing and tariff authority. In response, Trump said he will retain existing national security (Section 232) and Section 301 tariffs and sign an order to add a 10% tariff under Section 122 of the Trade Act, citing alternative legal authorities including the Trade Expansion Act of 1962 and the Trade Act of 1974. The announcement follows prior tariffs imposed under IEEPA—25% on many Canadian and Mexican imports and 10% on Chinese imports—meant to address alleged national security and public health threats. Markets sensitive to policy uncertainty, including equities and cryptocurrencies, have historically reacted negatively to similar tariff escalations due to increased economic uncertainty and investor risk-off behavior.
Bearish
A sudden, broad 10% global tariff increases macroeconomic uncertainty and raises the risk of slower growth and higher input costs—factors that typically trigger risk-off moves in financial markets. Cryptocurrencies are particularly sensitive to spikes in geopolitical and policy uncertainty; past tariff escalations and trade wars (e.g., US-China tensions) coincided with sharp drawdowns in crypto and equity markets as investors reduced exposure to high-beta assets. Although Trump signals use of alternative legal authorities (Sections 122, 232, 301) which may reassure markets about enforceability, the Supreme Court ruling introduces legal uncertainty over executive tariff powers—compounding volatility. Short-term impact: elevated volatility and likely price declines in crypto as traders de-risk and liquidity tightens. Longer-term: if tariffs persist, they could dampen global growth and institutional risk appetite, reducing inflows into speculative assets and keeping downward pressure on valuations. Conversely, any clear legal path and market confidence in enforcement might partially offset the negative sentiment, but overall the immediate outlook is bearish for crypto markets.