US President Donald Trump has always been known for his harsh and abrupt decisions. His approach, especially when it comes to imposing tariffs on other countries, has always been extremely aggressive. However, a recent decision by the US Supreme Court has blunted the edge of this most powerful and dangerous weapon of his. Now, Trump will no longer be able to intimidate any country economically by imposing heavy tariffs overnight. The country's highest court has put a stop to the arbitrary powers granted under the International Emergency Economic Powers Act (IEEPA). Trump still possesses the "Brahmastra" of imposing tariffs, but now his path will be fraught with legal complications and lengthy paperwork. Let's understand Trump's new trade strategy after this major change and its impact on the world.
The sharpest "political weapon" has been taken away.
Trump has always used the IEEPA as a surefire weapon. Under this, he could impose heavy taxes ranging from 10 to 50 percent on any country without any lengthy process. The motive was not only economic, but often purely political. Whether it was to threaten European countries over the Greenland issue, to pressure the Brazilian government in support of former President Jair Bolsonaro, or to punish Canada for importing electric vehicles from China, Trump used this law everywhere.
The Supreme Court's decision has largely closed this avenue of "political blackmail." Michael Froman, President of the Council on Foreign Relations, has clarified that the US president will no longer be able to use tariffs for arbitrary retaliation or diplomatic intimidation.
'Section 122'... A New 150-Day Trick
Following the court's setback, the Trump administration immediately began working on "Plan B." As an immediate relief, he has invoked Section 122 of the 1974 Trade Act. Under this, Trump signed an executive order imposing a 10 percent global duty on imports from around the world. This rule allows the president to impose a maximum tariff of 15 percent for 150 days without any lengthy investigation.
US Treasury Secretary Scott Bessant says that despite the new rules, tariff revenues will remain the same in 2026, with the implementation process becoming more complex. However, this 150-day rule serves only as a bridgehead, maintaining pressure on trading partners until the government finds a definitive and legally sound solution.
Taxes will no longer be imposed overnight.
Trump's new trade strategy now centers on two laws: Section 232 and Section 301. Section 232 of the Trade Expansion Act of 1962 allows for taxation of specific sectors in the name of national security. Under this, import duties are being imposed on cars, car parts, heavy trucks, copper, and wood products (such as furniture). However, its biggest drawback is that this rule applies globally, preventing Trump from targeting any single country.
In this context, Section 301 has emerged as Trump's new weapon. Under this rule, the President can punish a specific country for its "unfair trade practices." Under this law, Trump imposed heavy tariffs on China during his first term, which the Biden administration has continued. US Trade Representative (USTR) Jamison Greer has clarified that his team is launching new investigations against several major trading partners worldwide. These investigations will cover serious issues such as pharmaceutical companies' drug prices, overproduction, forced labor, discrimination against American tech companies, and marine pollution. Investigations are already underway against China and Brazil, and Vietnam and Canada may soon be included.
'Section 301' will become Trump's super weapon.
The biggest problem with this new strategy is that taking action under Section 301 is not easy. It requires a lengthy, formal investigation process, gathering evidence, establishing legal grounds, and seeking public opinion. This entire process can take up to a year.
Trump will no longer be able to suddenly impose tariffs on Mexico or Canada for fentanyl trafficking, or on Brazil overnight for political reasons. Every decision will need to have a solid legal and commercial basis.
This change brings some relief to international companies and businesses. Instead of a sudden 'shock' to trade, there will now be a set process, bringing transparency and stability to the market. This means that the Supreme Court has not eliminated Trump's power to impose tariffs, but rather has limited it to legal limits. Now, Trump has weapons, but to use them, he will need more time, evidence, and legal discipline than ever before.
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