Trump Bypasses Supreme Court Tariff Ruling with New 10% Global Levy

The constitutional tug-of-war over trade policy reached a fever pitch this week as President Donald Trump moved to circumvent a definitive Supreme Court ruling that curtailed his executive authority. In a 6-3 decision, the high court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president the unilateral right to impose import taxes during peacetime without explicit Congressional consent. The ruling, supported by a cross-ideological coalition of three liberal and three conservative justices, emphasized that the power to levy tariffs remains a core legislative prerogative. However, the victory for free-trade advocates was short-lived, as the administration immediately pivoted to alternative legal frameworks to maintain its protectionist agenda.

During a defiant news conference following the ruling, President Trump denounced the Supreme Court as a 'disgrace' and accused the justices of being influenced by foreign interests. More importantly for the markets and the venture capital ecosystem, he announced a new 10% global tariff to be implemented under the Trade Expansion Act of 1962. By switching legal justifications, the administration is attempting to exploit Section 232 of the 1962 Act, which allows for trade restrictions based on national security concerns. This 150-day 'temporary' levy is designed to keep revenue flowing into the Treasury while the administration conducts a series of investigations into 'unfair trade practices' that could justify more permanent duties in the future.

“

More importantly for the markets and the venture capital ecosystem, he announced a new 10% global tariff to be implemented under the Trade Expansion Act of 1962.

For the startup and venture capital community, this development signals a period of prolonged volatility and margin compression, particularly for hardware and consumer electronics companies. Startups that rely on global supply chains for components now face a double-edged sword: the uncertainty of a legal battle between the executive and judicial branches, and the immediate reality of a 10% increase in landed costs. While the Supreme Court ruling initially offered hope for a return to more predictable trade norms, the administration's rapid pivot suggests that 'tariff-by-decree' remains the primary tool of U.S. economic policy. This environment makes long-term capital expenditure planning nearly impossible for growth-stage companies that operate on thin margins.

The broader market implications are equally concerning. By labeling conservative justices who voted against him as 'unpatriotic,' Trump has signaled a total breakdown in traditional institutional deference. This political instability often translates to a 'risk premium' on U.S.-based investments. Furthermore, the 150-day window for the new tariffs appears to be a tactical maneuver to bypass immediate legislative or judicial stay, forcing importers to pay the duties while the new legal basis is litigated. Analysts expect that international trade partners will not wait for the 150-day period to conclude before launching retaliatory measures, potentially targeting U.S. tech exports and agricultural products.

Looking ahead, the venture community should prepare for a 'rolling tariff' regime. Even if the Trade Expansion Act justification is eventually challenged in court, the administration has demonstrated a willingness to cycle through various statutes—ranging from the 1962 Act to Section 301 of the Trade Act of 1974—to keep trade barriers in place. For founders, the priority must shift toward supply chain diversification and 'friend-shoring' to mitigate the impact of what is effectively a permanent state of trade emergency. The era of low-cost, frictionless global sourcing is being replaced by a complex regulatory landscape where legal agility is as important as product innovation.