US stocks slide as Trump vows new 10% global tariff
President pledges to use alternative legal authority after Supreme Court strikes down original tariff plan
US equities retreated on Friday after President Donald Trump pledged to impose a 10% global tariff using alternative legal authority, just hours after the Supreme Court struck down his original tariff plan.
The S&P 500, which had climbed as much as 0.6% following the Court's morning decision, erased gains and turned negative in afternoon trading. The Dow Jones Industrial Average slipped from a 0.3% advance, while the technology-heavy Nasdaq composite surrendered most of its earlier 1.1% rally.
The Supreme Court ruled 6-3 on Friday that the president lacked authority to unilaterally impose sweeping global tariffs under the International Emergency Economic Powers Act (IEEPA), marking a significant rebuke to the administration's trade policy. Chief Justice John Roberts, writing for the majority, emphasized that tariff imposition is a core power of Congress, rejecting the argument that the president could treat trade measures as emergency actions.
"The power to impose taxes on Americans, which includes tariffs, is a core power of Congress," the majority opinion stated. The decision specifically invalidated the administration's "Liberation Day" tariffs, which had imposed a baseline levy of 10% or more on goods from nearly every country globally since April 2025.
However, the market relief proved short-lived. Trump immediately announced plans to pursue the same 10% global tariff through alternative legal pathways, including Section 122 of the Trade Act and investigations under Section 301, which allows the president to address unfair trading practices. According to live coverage from the Wall Street Journal, Trump stated that "other alternatives" would replace the mechanism rejected by the Court.
Legal experts note that while the IEEPA route has been closed, other statutory authorities remain available. Section 232 of the 1962 Trade Expansion Act permits tariffs for national security reasons, while Section 301 allows duties to compel foreign governments to change policies deemed harmful to US commerce.
In a dissent joined by two other conservative justices, Brett Kavanaugh suggested the administration had merely "checked the wrong statutory box" and could achieve similar tariff goals through other legal avenues. The dissenting opinion outlined alternative authorities the president could invoke to implement trade restrictions.
The renewed tariff threat comes at a sensitive moment for US markets, which have been wrestling with inflation concerns and Federal Reserve policy uncertainty. Analysts warned that prolonged trade policy disputes could disrupt global supply chains and dampen corporate earnings, particularly for manufacturers and retailers reliant on international imports.
Emerging market stocks initially surged to record highs following the Supreme Court ruling, as investors hoped for reduced trade tensions. However, those gains moderated as Trump's announcement highlighted the persistent risk of US protectionism, even after the judicial setback.
The administration's commitment to pursuing tariffs through alternative means suggests trade policy will remain a source of volatility for US markets in the coming months. With billions of dollars in duties already collected under the invalidated tariffs now potentially subject to legal challenges from importers, the economic uncertainty surrounding trade relations appears far from resolved.