Trump administration's legal setback on tariff increases uncertainty and stalls investment.
US court ruling threatens protectionist strategy and delays Howard Lutnick's promise of a "powerful economy".
247 - A ruling by a U.S. appeals court has called into question the legality of most of the tariffs imposed by President Donald Trump. Although the measures have been provisionally upheld pending a Supreme Court ruling, the uncertainty is already paralyzing investments, delaying industrial expansion plans, and weakening the narrative that protectionism would bring immediate dividends to the American economy, according to Bloomberg.
In March, Commerce Secretary Howard Lutnick had projected that "starting in the third quarter, the effects of Donald Trump would begin to be felt, and in the fourth quarter, the power of Donald Trump's economy would be felt." However, this confidence has been replaced by skepticism, as the agreements signed with the European Union, Japan, and South Korea are nothing more than vague frameworks without guarantees of compliance.
Experts' analysis
According to Jennifer McKeown, chief global economist at Capital Economics, the scenario is one of prolonged uncertainty: “We know that these tariffs will remain in effect until at least mid-October, and then Trump will likely take the case to the Supreme Court. Therefore, there could still be a very long delay before we really know what will happen.”
The immediate impact, explains Carsten Brzeski, global director of macroeconomics at ING, is business paralysis. "For any company that does business with the United States, this means that no structural decisions will be made now," he said, adding that the court decision returns uncertainty to markets already accustomed to the improvisation of Trump's trade policy.
Jonathan Gold of the National Retail Federation reinforces the effects on consumers: "Continued instability threatens economic growth and will ultimately certainly result in higher prices for goods and services paid by American consumers."
The political and economic weight
The court decision is not only technical, but also political. Trump, who prioritized speed in trade negotiations to deliver immediate results, may face a strategic setback. Professor Simon Evenett of IMD Business School estimates that companies are only expected to resume major investments in the third quarter of 2026, widening the gap between the promise of an industrial renaissance and the reality of a manufacturing sector that has been in decline for six months.
Furthermore, fiscal pressure is mounting. The Committee on a Responsible Federal Budget calculates that, should the Supreme Court uphold the lower court's decision, 71% of projected tariff revenue will disappear—reducing the projected impact from $2,8 trillion to just $800 billion by 2034. This would undermine one of the cornerstones of Trump's discourse: the idea that tariffs would help address the budget deficit.
