In the middle of a very busy news cycle, and as the United States appeared close to starting a war with Iran, the Supreme Court delivered its decision on tariffs on Friday afternoon. A ruling awaited for weeks; it actually invalidated the tariffs imposed by Donald Trump under the IEEPA.

The IEEPA (International Emergency Economic Powers Act) is a 1977 law that allows the president to take action to combat an "unusual and extraordinary" threat. It is the law that was used to impose the bulk of the tariffs decided in 2025:

- The reciprocal tariffs of April 2 (whose rates later changed).
- The fentanyl-related tariffs imposed in February 2025 on Canada (25%), Mexico (25%) and China (20%, then 10% since the Trump-Xi summit in late October in South Korea) in February.

According to Yale's Budget Lab, the average US tariff rate thus fell from 16% to 9.1% after the Supreme Court's decision, before rising again to 13.7% after Donald Trump's countermeasures.

The most important decision in 100 years

Those are the facts. Substantively, the Supreme Court's decision is a serious setback for Donald Trump. First, because it is a pillar of his economic strategy. Tariffs are presented as a way to rebalance trade, reindustrialise the United States, and make other countries pay for having looted American jobs and factories for so many years.

Second, because since the start of his second term, Donald Trump has continuously pushed the limits of presidential power, with the Supreme Court's goodwill. This is the first time it has truly stood up to the president. Amongst the justices who voted to invalidate the tariffs (6 to 3), two were appointed by Trump during his first term: Neil Gorsuch and Amy Coney Barrett.

The setback is even more significant because the Trump administration dramatised the Supreme Court's decision. In an interview on 60 Minutes in November, Donald Trump called it the "most important issue discussed by the Supreme Court in 100 years".

But why dramatise the Supreme Court's decision to this extent? For months, everyone knew it was possible, even likely, that the Supreme Court would strike down the tariffs (given the tone of the hearing in November). And everyone also understood that the White House would immediately launch a response, in effect skirting the Supreme Court and saving the tariffs. The Trump administration could very well have played down the significance of this decision and simply said that the tariffs would remain in place no matter what.

Good television?

The Supreme Court ruling also comes at a time when the White House is trying to address the issue of affordability (the cost of living), a central theme of the midterms campaign. Tomorrow, Donald Trump is due to deliver the traditional State of the Union address. He was expected to use the occasion to highlight his economic record.

From that standpoint, tariffs returning to centre stage is more likely to muddy the message. President Trump will have to explain tomorrow night everything he has done to fight inflation, at the very moment he is trying to reimpose tariffs on everyone.

Tariffs that are largely paid by Americans. Several studies have reached that conclusion. And recently, an analysis by the New York Fed estimated that US businesses and consumers bore more than 90% of the costs of tariffs in 2025.

A report that would probably have gone relatively unnoticed (in an already crowded news cycle) if Kevin Hassett had not publicly criticised it. On CNBC last Wednesday, the White House's economic adviser called it the "worst research paper in the history of the Fed" and demanded sanctions against its authors.

These comments sparked an outcry on all sides and put everyone's attention on the analysis. Kevin Hassett had long been seen as the favorite to succeed Jerome Powell as Fed chair. But Donald Trump ultimately wanted to keep him in his post, notably appreciating his defence of the administration's policies during his television appearances...