Tariff policy update

Trump warns that a court ruling against his emergency tariff powers could trigger a 1929 style crash.

Trump warns of another Great Depression if court strikes down tariffs

President Donald Trump used Truth Social to warn that a court ruling against his sweeping tariffs could unleash a 1929 style crash, arguing his emergency powers are essential to protect US wealth and influence. The legal fight centers on a May decision by the Court of International Trade that Trump exceeded his authority to impose tariffs. The United States Court of Appeals for the Federal Circuit heard the administration’s appeal last week and signaled skepticism about the breadth of power to impose tariffs, with a ruling expected to move up to the Supreme Court.

Trump frames tariffs as an emergency tool, while the judiciary questions the scope of executive power. This clash could shape how future presidents use emergency powers in economic policy. The stakes go beyond tariffs to trust in how government manages risk and markets react to policy shifts.

A second thread is the economics of tariffs. Economists say tariff revenue this year, roughly 70 to 80 billion dollars, is small next to federal spending that runs into trillions, and a change in tariff levels would not automatically derail growth. Some observers think removing or easing tariffs could be stimulative, while markets still face uncertainty about policy direction and implementation. The stock market’s highs are not driven by tariff revenue, and analysts warn that tariffs tend to slow growth and tilt costs onto consumers.

Highlights

The coming legal decisions will test how much economic policy can bend to political aims.