Trade Confusion Returns As Trump Shifts to Different Tariff Tools

Lori Wallach, director of the Rethink Trade program at American Economic Liberties Project, broke down the other legal authority President Trump can use to impart tariffs on America's trade partners after the Supreme Court struck down his former policy last week. Wallach also said that for companies and consumers who are looking for a refund from tariffs, questions remain around the 'how' of allocating billions of dollars of payments.

The Supreme Court’s nixing of US President Donald Trump’s “reciprocal” tariffs is throwing fresh confusion over the raft of trade deals negotiated by global partners as the inescapable reality of ongoing levies remains a threat.

The European Union on Monday froze the ratification process of its agreement with Washington. The move injected economic turbulence into an already strained transatlantic relationship.

Without mentioning the EU specifically, Trump warned nations against taking advantage of his legal setback.

“Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to,” he wrote in a post on Truth Social.

Meanwhile, Indian trade officials postponed a trip to the US that would have aimed at concluding their interim accord.

The Trump administration swiftly announced plans to replace the prior tariffs with a new, across-the-board 15% levy on US imports. While that creates temporary winners such as China and losers including the UK, it leaves the overall weighted tariff rate only marginally lower for the American businesses and consumers actually footing the bill. The court decision could have implications for the US deficit as tariff revenues come under threat, as well as on the country’s trade balance. The 15% tariff rolled out by the White House is meant to replace those the court invalidated, though it’s only permitted to last up to 150 days and in cases of fundamental international payments problems.

Read More: Global Trade Confusion Returns as Trump Overhauls Tariff Toolkit

Gold’s recent run of gains has helped the metal recover ground following a sudden rout at the turn of the month, which had dragged prices down a record. The advance has been underpinned by long-term factors aiding the commodity — including heightened geopolitical tensions and investor wariness of sovereign bonds and currencies.

“There are enough structural factors in favor of gold in the medium term,” said Vasu Menon, strategist at Oversea-Chinese Banking Corp. “In the short term, however, expect gold prices to be volatile after the sharp gains in recent months given still-unfolding developments with US trade policy, and the situation in Iran.”

The Supreme Court ruling also has cast doubt over deals the US negotiated with major trading partners. The European Union is poised to freeze the ratification process of an agreement with Washington until there’s more clarity, Indian officials will postpone a trip to the US, while a member of Japan’s ruling party called the situation “a real mess.”

What Bloomberg Strategists Say...

Gold’s strength amid a lower positioning from hedge funds shows that there’s further position upside. The Commodity Futures Trading Commission data shows that the net-long position for gold futures have fallen to the lowest level in nearly a year.

—Mark Cranfield, Markets Live strategist

In the Middle East, traders are watching a standoff between Washington and Tehran. While the two nations are in talks over a potential deal over Iran’s nuclear program, the US has amassed a vast military force in the region, prompting concernGold clos there could be limited strikes or a full-blown conflict.

Gold rose 2.0% to $5,212.02 an ounce as of  11:22 a.m. in New York. The Bloomberg Dollar Spot Index dropped 0.01%. Silver climbed 3.7% to $87.76. Platinum slipped while palladium traded higher.

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