Trump Pivots to 1962 Trade Act After Supreme Court Blocks Global Tariffs

The US Supreme Court’s 6-3 decision to strike down the use of the International Emergency Economic Powers Act (IEEPA) for global tariffs represents a landmark constitutional check on executive trade authority. By ruling that the President cannot impose import taxes under the guise of an 'emergency' without explicit Congressional consent, the court briefly offered a reprieve to global logistics networks. However, the administration’s immediate pivot to the Trade Expansion Act of 1962 suggests that the respite for importers will be short-lived and replaced by a new era of legal and operational uncertainty. This 'legal whack-a-mole' strategy forces supply chain leaders to abandon hope for a return to predictable trade regimes, as the executive branch demonstrates a clear intent to maintain protectionist barriers through any available statutory means.

The core of the legal dispute centered on whether the IEEPA, a law intended for freezing assets and blocking transactions during national emergencies, could be stretched to include the levying of tariffs—a power the Constitution explicitly grants to Congress. The majority opinion, which saw a rare alignment of three liberal and three conservative justices, emphasized that Congress alone holds the power to levy tariffs during peacetime. By rejecting the administration's interpretation, the court effectively invalidated a significant portion of the current trade policy framework. Yet, the President’s response was swift and defiant, labeling the court a 'disgrace' and accusing justices of being swayed by foreign interests, signaling that the battle over trade authority has moved from the courtroom back to the docks.

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For logistics and procurement professionals, the most immediate concern is the proposed 10% global tariff to be implemented under the Trade Expansion Act of 1962.

For logistics and procurement professionals, the most immediate concern is the proposed 10% global tariff to be implemented under the Trade Expansion Act of 1962. This act, specifically Section 232, allows the president to impose tariffs if an investigation finds that imports threaten national security. By announcing a 150-day window for this new 10% levy, the administration is creating a high-pressure environment for 'front-loading.' We expect to see a massive surge in import volumes over the coming weeks as companies race to clear customs before the new duties take effect. This will likely lead to significant port congestion, equipment shortages, and a spike in ocean freight rates, mirroring the disruptions seen during the initial trade wars of 2018.

Furthermore, the President’s plan to use this 150-day period to conduct 'various investigations' into unfair trade practices indicates a strategic shift toward a more permanent and granular tariff structure. These investigations are likely to target specific sectors—such as automotive, semiconductors, and green energy—under the auspices of national security or reciprocal fairness. This means that even if the broad 10% tariff is eventually challenged in court, the administration will have a secondary layer of sector-specific duties ready to be deployed. Procurement teams must now account for a baseline 10% increase in landed costs for all global sourcing, while simultaneously preparing for even higher targeted duties on critical components.

The long-term implications for global supply chains are profound. The move toward 'tariffs, period'—as the President described it—suggests a decoupling from the rules-based international trading system. Companies that have spent decades optimizing for low-cost global sourcing are now facing a structural shift toward regionalization and 'friend-shoring.' The unpredictability of which law will be used next to justify trade barriers makes long-term capital investment in international logistics infrastructure increasingly risky. As the administration prepares to bypass the Supreme Court's ruling, the industry should watch for immediate executive orders and the formal initiation of Department of Commerce investigations, which will serve as the new legal foundation for the next phase of American protectionism.