Supreme Court Decision Cripples Trump's Foreign Policy Toolkit: What Replaces Tariffs?

United States - Ekhbary News Agency

Supreme Court Decision Cripples Trump's Foreign Policy Toolkit: What Replaces Tariffs?

In a significant judicial development, the U.S. Supreme Court has declared a substantial portion of President Donald Trump's tariff impositions on various nations illegal. This ruling, which experts have characterized as "effectively neutralizing tariffs as a geoeconomic weapon," represents a major setback for one of the most prominent tools of foreign policy wielded by Trump during his presidency. The decision fundamentally alters the landscape of American economic statecraft and raises critical questions about the future trajectory of U.S. international relations.

President Trump's foreign policy has been notably characterized by a "speak loudly and carry a big stick" ethos. This 'stick' has frequently manifested as tariffs, a tool he employed assertively to threaten allies, isolate adversaries, and compel policy concessions from other countries, often on issues tangentially related to trade. From imposing duties on European nations for opposing his Greenland acquisition ambitions, to penalizing Brazil over the prosecution of an ally, and threatening India for purchasing Russian oil, tariffs became a versatile instrument in Trump's diplomatic arsenal. These actions often cited alleged failures to address issues like fentanyl flow, or to comply with deportation policies, underscoring the broad application of this economic leverage.

The legal justification for many of these tariffs was rooted in the International Emergency Economic Powers Act (IEEPA). However, the Supreme Court's recent 6-3 decision has invalidated numerous such actions, leaving the administration facing a strategic void. This judicial rebuff forces a critical re-evaluation of how the U.S. engages with the world when its preferred method of coercion is significantly curtailed.

In an effort to adapt, the administration has signaled its intent to rebuild its sanctions regime using alternative legal frameworks, primarily drawing upon the Trade Act of 1974. President Trump announced plans to impose a 10 percent "global tax" under Section 122 of the act and initiate new negotiations under Section 301. Skeptics, however, question whether these alternatives can provide the same degree of flexibility and impact as the previously unrestricted tariffs under IEEPA. The Trade Act provisions are generally designed to address unfair trade practices and involve lengthy review processes. Furthermore, Section 122 tariffs are capped at 15 percent and expire after 150 days without congressional approval – a far cry from the sweeping, often existential, trade threats Trump has historically made.

Edward Fishman, a former State Department and Treasury official and now director of the Center for Geoeconomic Studies at the Council on Foreign Relations, commented, "You can theoretically still use them as leverage in trade negotiations, but it just takes a lot longer. It’s not like a crisis can break out somewhere in the world, and Trump can threaten 30 percent tariffs to try to fix it." This highlights the diminished immediacy and scope of the new tools.

Despite this setback, the ruling does not signal an end to economic warfare as a foreign policy tool. Notably, the Supreme Court's decision did not address the President's authority to impose sanctions under IEEPA. Sanctions, which are legal measures to restrict economic transactions with specific countries or entities, have historically been used by administrations in contexts where Trump often opted for tariffs. While White House officials have sometimes appeared to conflate the two, sanctions represent a distinct and less controversial avenue for exerting economic pressure.

Although Trump has utilized sanctions, he has expressed a preference for tariffs, believing they bolster global confidence in the dollar and can achieve foreign policy goals while simultaneously benefiting the domestic economy – a view contested by many economists. Post-ruling, he may be compelled to embrace sanctions more readily, potentially reverting to the "sanctions-happy" practices of previous administrations.

As Trump himself ruefully noted, his IEEPA authority allowed him to "destroy the country" via a trade embargo, but not to "charge a dollar." This distinction underscores the shift in his available leverage.

The effectiveness of Trump's tariff-based coercion has yielded mixed results. It played a role in Mexico halting oil shipments to Cuba, contributing to the island's economic struggles. Similarly, the promise of tariff relief was instrumental in bringing Thailand and Cambodia to the negotiating table during a border dispute. However, against more resilient nations like China, such threats proved less effective, with Beijing pushing back through its own economic countermeasures.

With the legal dust settling and Trump's reaction still unfolding, major geopolitical shifts are unlikely in the immediate aftermath. However, the decision may embolden certain nations facing future confrontations with the U.S. For Trump, the era of waking up to international crises triggered by his impulsive tariff threats on social media may be drawing to a close. Deprived of one of his signature economic weapons, the critical question remains: will he pivot to more traditional forms of warfare, or adapt his economic statecraft to the new legal realities?

Ekhbary News Agency