The ruling gives the administration 10 days to halt tariff collection (but not return the money already collected). This affects tariffs on Canada, Mexico, China and the 10% global tariff. It does not affect sectoral tariffs (autos, steel, aluminium). The White House may appeal all the way up to the Supreme Court, but in the interim, it will have to comply within 10 days.
Going forward, the US administration will probably use temporary legislation to maintain tariffs (up to 15% for 150 days), but it needs Congressional approval to extend them. For this to happen, it will need to build a case against separate nations within the next few months. Sectoral tariffs, meanwhile, remain and may be broadened.
The most likely outcome is:
- An appeal to the US Court of Appeal and then, if needed, the Supreme Court
- A 150-day extension of the baseline 10% tariff (up to 15%)
- A broadening of sector tariffs
- Longer-term trade cases focused on the US's largest trading partners, like Mexico, Canada, the EU and China, while smaller nations could drop below the radar
What does it mean for clients and markets?
We would expect a positive market and business reaction to the news. At the very least, the ruling paves the way to dent some of the sharp economic impact of tariffs and give businesses further time to prepare. It could also help with retail sales, reducing crisis-level consumer pessimism, especially in the US.
Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs, which can’t exceed 15% for the time being.
Still, we are very far from addressing the broader economic and business uncertainty. The White House can explore different legal avenues, including temporary measures. A 10% to 15% 150-day global tariff is still 4-6 times higher than the previous average and can significantly slow down the global economy. The US administration can also broaden sector tariffs, agree with Congress to quickly build cases and approve tariffs just against America’s biggest trading partners, or it could simply win the appeals.
