Trump's Tariff Policy Faces Judicial Resistance, Supreme Court May Become the Final Battlefield
The U.S. Federal Trade Court recently ruled that the global tariff policy implemented during the Trump administration is unconstitutional, a decision that has sparked strong reactions in the financial markets. Capital.com Senior Analyst Kyle Rodda pointed out that the core of this tariff dispute lies in the struggle between executive power and legislative power.
According to the U.S. Constitution, the power to impose tariffs is clearly assigned to Congress. The Trump administration previously implemented tariffs based on the "Emergency Powers" under the International Emergency Economic Powers Act, a practice that has been contentious. Rodda analyzes that this case is likely to be appealed to the Supreme Court, becoming an important case for testing the separation of powers in the United States.
Currently, the market faces dual risks: on one hand, if the government refuses to execute the court's decision, it may trigger a constitutional crisis; on the other hand, if the Supreme Court supports the original ruling, the global trade system will undergo significant adjustments. It is noteworthy that the hearing of this case coincides with a critical period in the U.S. elections, and political factors may further exacerbate market volatility.
From an investment perspective, if this ruling ultimately leads to the cancellation of tariffs, it will significantly benefit risk assets. However, Rodda warns that before the Supreme Court makes a final ruling, investors should be cautious of market fluctuations caused by policy reversals. Historical data shows that during similar significant constitutional disputes, the volatility index of U.S. stocks typically rises by an average of 15-20 percentage points.
