Trump's Tariff Policy Enters Phase Two: Higher Rates and Legal Uncertainty Loom as International Partners Hesitate

6 predicted events · 20 source articles analyzed · Model: claude-sonnet-4-5-20250929

The Supreme Court Reshapes Trump's Trade War

The landscape of President Donald Trump's signature trade policy has fundamentally shifted following a Supreme Court ruling that struck down his sweeping "reciprocal" tariffs imposed under the International Emergency Economic Powers Act (IEEPA). According to Articles 12 and 19, the court determined that Trump exceeded his authority by invoking the 1977 emergency law to justify broad tariffs targeting America's trading partners, as well as separate levies on China, Canada, and Mexico. Rather than retreat, the Trump administration is rapidly pivoting to alternative legal mechanisms, signaling that the tariff war is far from over—it's simply entering a new, potentially more contentious phase.

The Administration's Immediate Response

Within hours of the Supreme Court decision, Trump announced plans to reimpose tariffs using Section 301 of the 1974 Trade Act, starting with a baseline 10% global tariff that took effect on February 24 (Articles 6 and 7). However, as Article 4 reveals, US Trade Representative Jamieson Greer quickly clarified that this is merely a starting point: "Right now, we have the 10 percent tariff. It'll go up to 15 percent for some and then it may go higher for others." Trump himself reinforced this escalatory posture in a warning posted on Truth Social (Articles 14 and 19), threatening that any country attempting to "play games" with the Supreme Court decision would face "a much higher Tariff, and worse, than that which they just recently agreed to."

International Partners Pull Back

The Supreme Court ruling has created a crisis of legal certainty that is causing America's trading partners to reconsider recent agreements. The European Union has taken the most decisive step, with Irish MEP Barry Andrews telling Euronews that "as long as there isn't legal certainty, it's impossible for us to do this" (Article 5). The EU has effectively paused ratification of its summer 2025 trade deal with the US, with Article 17 confirming the bloc is "waiting for clarity." Article 5 notes that this pattern extends beyond Europe: "many others are now slow-walking trade agreements with the US," including India, Japan, and Taiwan. India has specifically deferred previously scheduled talks to finalize a recent agreement (Article 19).

What Happens Next: Three Key Predictions

### 1. Escalating Tariff Rates Through Section 301 Investigations The Trump administration will aggressively use Section 301 of the 1974 Trade Act to impose higher tariffs than originally planned. According to Article 4, Greer outlined plans for "public investigations" where citizens can provide proof of unfair trade practices. This process gives the administration a legally defensible pathway to impose tariffs that "may go higher" than 15%. **The prediction:** Within the next 60-90 days, we'll see announcements of Section 301 investigations targeting specific countries—likely China, the EU, and other major trading partners. These will culminate in tariff rates of 20-25% or higher on selected goods, exceeding the original "reciprocal" tariff levels. The administration's acknowledgment that they're "preparing for foreign countries to 'sue' over the measure" (Article 4) indicates they expect legal challenges but are proceeding anyway. ### 2. Collapse of Recently Negotiated Trade Deals The legal uncertainty created by the Supreme Court ruling will cause a domino effect of collapsing trade agreements. As Article 5 notes, MEP Andrews pointed out that implementing deals under current circumstances would mean consumers and businesses "pay the cost" without guarantees of stability. **The prediction:** Within the next 30-60 days, at least three major economies will formally suspend or withdraw from trade agreements negotiated in response to Trump's initial tariff threats. The EU has already paused its deal; India, Japan, and potentially South Korea will follow. This will paradoxically result in *less* predictable trade relations than existed before the Supreme Court ruling, as countries revert to pre-negotiation positions while the US imposes unilateral tariffs through Section 301. ### 3. Market Volatility and Supply Chain Disruption The combination of rising tariff rates and collapsing trade certainty will create significant economic disruption. Article 1 already shows copper prices falling as investors "waited for demand from industrial users in top buyer China to rebound," while Article 8 noted metals gained on "the prospect of lower US levies"—volatility that will intensify. **The prediction:** Within the next 90 days, we'll see measurable increases in consumer prices for imported goods, particularly electronics, automobiles, and industrial equipment. The CEO who challenged Trump's tariffs (Article 11) represents countless businesses facing uncertainty. Companies will struggle to price goods without knowing whether tariffs will be 10%, 15%, 25%, or higher. This uncertainty premium will be passed to consumers.

The Political Dimension

Article 20 reveals that 55% of respondents in an NPR/PBS News/Marist poll believe Trump is moving the country in a negative direction, up from 51%. With midterm elections approaching in November (Articles 2 and 3), the economic impact of tariff chaos could become a decisive political issue. However, the administration shows no signs of moderating its approach. Justice Neil Gorsuch's separate opinion (Article 16) criticizing his colleagues' "inconsistent application" of legal doctrine suggests potential future Supreme Court volatility on executive power questions, adding another layer of uncertainty.

Conclusion: Instability as the New Normal

The Trump administration's response to the Supreme Court ruling indicates that rather than accepting constraints, it will pursue an even more aggressive tariff policy through alternative legal mechanisms. The collision between this determination and international partners' growing reluctance to engage under uncertain legal conditions points toward a period of heightened trade instability. For businesses and consumers, the message is clear: prepare for higher tariffs, collapsing trade agreements, and continued legal battles that could last well into 2027. The Supreme Court may have struck down Trump's first approach, but it has unleashed a more chaotic phase two of his trade war.