US court rules against Trump's use of tariffs, lowering average rate but specific hikes remain

From Morningstar: 2025-05-29 07:47:00

The US Court of International Trade has ruled against the Trump administration’s use of the International Emergency Economic Powers Act to impose country-specific tariffs, lowering the average US tariff rate from 18% to 7%. However, product-specific tariff hikes on autos, steel, and aluminum remain in place under Section 232 statutory authority.

The Trump administration could still impose large tariff hikes on specific products using Section 232 or Section 301 authority, potentially raising the average US tariff rate back to 10%-15%. If the Court of International Trade’s ruling is overturned, all tariffs could be reinstated, leading to significant harm to the US economy.

Despite the potential for further tariff hikes, if average tariff rates remain at 7%, the negative impact on US GDP and inflation would be milder, reducing the risk of a recession. Stock prices have rebounded close to pre-tariff levels, reflecting market optimism for a favorable outcome in the ongoing trade disputes.



Read more at Morningstar: What the US Ruling on Tariffs Means for Trump’s…