Global Trade in Flux: What’s Next After Tariff Ruling

The Supreme Court’s ruling against the use of the International Emergency Economic Powers Act (IEEPA) for broad-based tariffs triggers a shift in U.S. trade strategy, lowering the headline effective tariff rate from 13% to approximately 11%. To maintain policy continuity, the administration is transitioning to temporary Section 122 tariffs of 15% while launching new Section 301 investigations. This shift offers significant relief to the consumer goods sector, where apparel and accessories could see tariff drops of 16 to 17 percentage points. While Southeast Asian nations like Vietnam benefit from reduced exposure compared to previous IEEPA levels, countries like South Korea remain impacted by unchanged Section 232 duties. These adjustments create upside risks for macroeconomic demand and goods disinflation toward the end of the year, though full implementation of a replacement trade framework is unlikely to materialize before early 2027.