Brazil Set To Gain As Supreme Court Overturns Trump Tariffs
President Trump has announced sweeping new tariffs on imports, including those from Latin American countries, after the US Supreme Court dealt a significant setback to his trade policy.
In a 6–3 ruling on Friday, the Court upheld a lower federal court’s decision to strike down the President’s so-called “Liberty Day” tariffs. The justices concluded that Mr Trump had made unlawful use of the International Emergency Economic Powers Act (IEEPA) in imposing the measures. The President reacted angrily, describing the justices – including some of his own appointees – as “an embarrassment to their families” and denouncing the judgment as flawed, unfair and anti-American.
Undeterred, he swiftly invoked a separate legal authority to introduce a 10% global tariff, later confirming his intention to raise it to 15%. For now, however, the 10% levy has come into force this week. The surcharge is temporary and will apply for 150 days, with any extension requiring Congressional approval – something that may prove difficult given recent votes in the House of Representatives.
Not all existing trade measures are affected. Tariffs introduced under different statutes remain intact, including those placed on steel, aluminium and automotive imports.
Brazil looks set to benefit most from the ruling, as a 10% or 15% rate represents a substantial reduction to the 50% levy that has been in place for many Brazilian products since August. However, the Brazilian government remain cautious about how the ruling will be applied in practice and whether other laws will still be used to impose levies on exports from the country to the US.
Some products from Mexico are also likely to make gains, as while USMCA compliant goods are currently exempt, a 25% tariff has been in place for non compliant products.
It remains to be seen whether other Latin American countries will benefit, as this largely depends on whether the 10% or 15% rate is implemented. Nicaragua has been subject to an 18% tariff, while Bolivia, Costa Rica, and Ecuador have faced 15%. Products from all other Latin American countries have been receiving a 10% levy.
The Court did not rule on potential refunds – estimated at between $130 billion and $175 billion – leaving the prospect of prolonged legal disputes ahead.
