Liberation Day Tariffs
2025 Apr 2The Biggest Tariff Shock Since Smoot-Hawley
On April 2, 2025, President Trump announced tariffs under IEEPA emergency powers — 10% baseline, escalating to 46% on Vietnam, 34% on China, and 20% on the EU. The S&P 500 fell 19% within days.
On April 9, Trump announced a 90-day pause on all tariffs except China, reversing the selloff. On May 28, the U.S. Court of International Trade ruled the tariffs exceeded IEEPA authority. The Federal Circuit upheld the ruling in August. The Supreme Court affirmed in early 2026.
This was the first time since the 1970s courts struck down presidential trade authority on constitutional grounds. But market damage persisted — uncertainty itself restructured corporate supply chains and investment decisions.
The tariffs exposed a tension: executive trade powers, designed for Cold War emergencies, were being repurposed for peacetime policy. Does judicial pushback establish lasting precedent, or merely delay the next unilateral trade attempt?