Trump plans to double down on tariffs after court defeat. What’s ahead for investors

Subscribe to enjoy similar stories. Stocks rallied on Friday after the Supreme Court repudiated the signature pillar of President Donald Trump’s trade agenda, but the market’s relief is likely to be short-lived. Instead, investors should prepare for a new round of economic uncertainty.

In a 6-3 decision, the court said that Trump broke the law by using the International Emergency Economic Powers Act, or IEEPA, to place tariffs on most of America’s trading partners. While IEEPA allows the president to limit trade in many ways, the court said, it didn’t give the president tariff powers. Behind almost every public statement and Truth Social post in which he threatened to bludgeon a trading partner, IEEPA was the power that Trump relied on.

Now, that authority is gone. But rather than retreat, Trump is doubling down. After railing against the court, Trump announced on Friday afternoon that he would impose a new, 10% global tariff and foreshadowed more to come.

“Foreign countries that have been ripping us off for years are ecstatic," Trump said. “They’re so happy, and they’re dancing in the streets, but they won’t be dancing for long." The same could be said of investors. After a volatile day of trading, the S&P 500 index ended the session up 0.7%, to 6909.51.

Some tariff-sensitive stocks that initially soared when the decision was announced gave up some or all of their gains by the close. The 10-year Treasury yield rose by a modest 0.01 percentage point to 4.09%. No matter what Trump does, the tariff decision could have immediate implications for the economy and national debt.