Tariff push fuels market risk
Market analysts say the cumulative U.S. tariff program now looks like the largest American tax increase since 1993—about $1,500 per household—and its legal basis is shaky after the Supreme Court struck down earlier emergency authority. (investing.com) The administration responded by invoking Section 122 to impose a new 10% global tariff, provoking lawsuits from 24 states and adding to investor uncertainty. (investing.com) Analysts also warn that any U.S. move to blockade the Strait of Hormuz could magnify those trade shocks into a broader global disruption. (indiatoday.in)
President Donald Trump’s new 10% tariff on most imports has opened a second legal fight over trade policy just weeks after the Supreme Court struck down his first one. (justia.com) The Court ruled on February 20, 2026, in *Learning Resources, Inc. v. Trump* that the International Emergency Economic Powers Act does not let a president impose tariffs. Congress’s research service said the decision wiped out both the earlier drug-related tariffs and the broader “reciprocal” tariffs tied to trade deficits. (justia.com) (congress.gov) Trump answered four days later, on February 24, by invoking Section 122 of the Trade Act of 1974 for a 10% global surcharge on most imports. Bloomberg reported that the administration says Section 122 supports the move and that Trump has said he may raise the levy to 15%. (bloomberg.com) Section 122 is a narrow statute written for balance-of-payments problems, which are countrywide external financing gaps, not the ordinary trade deficit politicians usually cite. Congress’s research service said Article I gives Congress the tariff power, and Section 122 lets a president impose duties of up to 15% for 150 days in limited circumstances. (congress.gov) (supplychaindive.com) That distinction is now at the center of a lawsuit from 24 states and a group of small businesses in the U.S. Court of International Trade in New York. At an April 10 hearing, lawyers for the states argued that Trump was treating a trade deficit as if it were a balance-of-payments deficit under a law they said Congress wrote for a different monetary system. (bloomberg.com) The states also argue that Section 122 had never been used for tariffs before this year and that some exemptions cut against the law’s requirement for broad and uniform application. Supply Chain Dive reported that the complaint specifically challenged carveouts for goods that comply with the United States-Mexico-Canada Agreement. (supplychaindive.com) Markets are also weighing a second risk far from the trade court: the Strait of Hormuz, the shipping lane at the mouth of the Persian Gulf that carries a large share of the world’s oil traffic. On April 13, The Associated Press reported that the U.S. military was preparing a blockade of Iranian ports and coastal areas, while President Trump said the pressure campaign would extend to the strait. (apnews.com) (cnn.com) The administration says the maritime move is aimed at Iran, but any interruption around Hormuz reaches far beyond Iran because tankers for Asia and Europe pass through the same corridor. The Associated Press reported that the Pentagon described the operation as a blockade of Iranian ports rather than a full closure of the entire strait, while CBS News said vessels avoiding Iranian ports would still be allowed to transit. (apnews.com) (cbsnews.com) The next test is no longer whether tariffs can move markets; it is whether the White House can keep this tariff in place long enough for importers, courts, and investors to price it in. The judges in New York have not ruled yet, and any decision is likely to head back toward the Supreme Court. (bloomberg.com)
