Higher Tariffs Not Dead

The Supreme Court’s decision to strike down many of the recent Trump tariffs removes some of the most controversial trade measures, but it does not mark an end to tariff-driven policy. Core tariffs on steel, aluminum, and China remain intact, and the administration is already pivoting to other legal tools to impose broad new duties, suggesting that tariff levels will evolve rather than decline. Near-term market reactions may prove premature as investors reassess growth, earnings margins, and supply-chain dynamics under a still-restrictive trade regime.

From a macro perspective, the authors argue that tariffs reshuffle spending rather than drive sustained inflation, which they see as primarily a monetary phenomenon in an environment of modest money supply growth. Longer term, tighter judicial limits on “emergency” powers could curb future expansions of executive authority even as political incentives across both parties point toward elevated tariffs as a durable source of revenue and leverage in geopolitics.