WASHINGTON — President Donald Trump moved swiftly Monday to reimpose broad trade barriers, announcing a 15% blanket tariff on all imports after the Supreme Court struck down the sweeping reciprocal tariffs he had enacted over the past year. The 6-3 ruling, issued Friday, determined that the International Emergency Economic Powers Act does not grant the executive branch authority to levy tariffs unilaterally, delivering a significant blow to the administration's signature economic policy.
Trump invoked Section 122 of the Trade Act of 1974 to apply a new 10% global tariff immediately following the court's decision, then escalated further over the weekend, raising the rate to 15% via executive order. In a post on Truth Social, the president declared he would impose additional, higher duties on any country that chose to "play games" with the ruling. "BUYER BEWARE!!!" he wrote, signaling readiness to punish trading partners who attempt to renegotiate terms.
The reaction from key trading partners was swift and pointed. The European Commission issued a formal statement requesting "full clarity" on the steps the United States intends to take, noting that the current environment was "not conducive" to delivering the "fair, balanced, and mutually beneficial" transatlantic trade the two sides had previously agreed to pursue. Several major trading partners suspended implementation of trade deals struck under the original tariff regime, raising questions about the durability of months of negotiations.
Markets opened in the red Monday morning, with the Dow Jones Industrial Average falling as much as 807 points, or approximately 1.6%, while the S&P 500 shed 1.2% and the Nasdaq Composite declined 1.4%. American Express dropped nearly 5%, and JPMorgan Chase fell more than 2%, with financial sector stocks broadly under pressure. Nike slid more than 4% given its heavy reliance on Asian manufacturing and imports.
Federal Reserve Governor Christopher Waller, speaking at the National Association for Business Economics in Washington, said he did not expect the tariffs to have a lasting inflationary impact and that Friday's Supreme Court ruling may actually prove positive for business investment over the medium term by reducing policy uncertainty. Still, Waller acknowledged the need for additional labor market data before the Fed could adjust its policy stance.
Legal experts note that Section 122 tariffs carry a significant limitation: they expire after 150 days without explicit congressional approval, raising doubts about whether Trump's latest trade strategy can be sustained. With a deeply divided Congress unlikely to codify the measures, markets face the prospect of continued uncertainty well into the second half of 2026. The dollar weakened against the euro, the yen, and the Swiss franc as investors rotated away from U.S. assets.