The majority of President Donald Trump’s tariffs have been struck down, but the UK and Prime Minister Keir Starmer are not out of the woods yet.Earlier today, the US Supreme Court declared the Trump administration’s sweeping tax on imports illegal, representing a major setback to the White House’s recalibration of the economy.In response, the President has imposed a new 10 per cent tariff on every country across the world on top of existing levies under different legislation.President Trump had invoked the tariffs under the International Emergency Economic Powers Act (IEEPA), which, under his reading, allowed him to levy “reciprocal” tariffs on allies and separate duties related to alleged drug trafficking.In a six-to-three ruling, the Court concluded that the Republican Party leader had exceeded his authority as the legislation only allows the President to “regulate…importation” after declaring a national emergency.Despite the White House arguing that the IEEPA’s language does award him those powers, the highest court in the land of the free ruled otherwise.Reaction from the stock market and Trump critics has been jubilant, with the House of Representatives’ top-ranking Democratic Rep. Brendan Boyle hailing the decision as a “victory for every American family”.Closer to home, Conservative leader Kemi Badenoch told journalists she was “thrilled” by the ruling as “tariffs are expensive for both sides” of the Atlantic, with the Government confirming it is “working with the American administration” to see how UK importers will be impacted.LATEST DEVELOPMENTSFtse 100, S&P 500 and Nasdaq SKYROCKET as stock market rallies after Donald Trump tariff decisionDonald Trump tariffs declared illegal by US Supreme CourtRachel Reeves rakes in billions more than expected on capital gains tax to hit record budget surplusSince last year, the US has brought in more than $133billion dollars (£98.4billion) since tariffs were invoked. However, the White House now faces refunding this “bigly” sum; a bill President Trump is expected to fight paying.Businesses expecting a tariff refund should prepare for a lengthy legal battle, as while the Supreme Court deemed the administration’s actions as unlawful, it did not stipulate compensation for importers.Similar to the year-long judicial journey of Donald Trump’s tariffs, lower courts in the US will be the initial battleground for any refunds handed to the business community.Before potential refunds are on the agenda, the Trump administration has confirmed it will pursue other legal avenues to make President Trump’s “favourite word”, tariff, an economic reality rather than economic history.Imports coming from the UK have been slapped with a 10 per cent levy under the “reciprocal tariff” regime, which no longer has a legal basis as per the Court’s IEEPA ruling.However, President Trump is now imposing a new 10 per cent tax under Section 122 of the Trade Act of 1974. However this levy can only last 150 days without congressional approval.As well as this, the White House is continuing all tariffs currently active under statutes known as Section 232 and Section 301 will continue to be “in full force and effect”.Under Section 232 of US law, import taxes remain levied on steel and aluminium products from the UK, as well as a 25 per cent tax charge on automobiles and auto parts. These tariffs apply regardless of the Supreme Court’s ruling on the emergency tariff authority.On top of this, the UK Government has been somewhat successful in reducing tariffs slapped on specific sectors, namely on pharmaceuticals. Ministers secured a trade deal guaranteeing zero per cent tariffs on British pharma exports for several years in exchange for policy commitments.How long this will last remains to be seen as Trump’s post-Supreme Court ruling press conference suggests he will do whatever it takes to makes to ensure tariffs are a success.Despite today’s roadblock, the President asserted the ruling does not stop him from cutting off all trade or business from a nation: “I can destroy the trade, I can destroy the country.”Based on this language, Mr Starmer and the Labour Government will have an uphill battle to achieve zero per cent tariff deals with the US administration in the future.
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