A recent ruling by a federal appeals court has cast doubt on the legality of most tariffs imposed by President Donald Trump, which may significantly disrupt his trade strategy.
Tariffs as a Tool in Trump’s Trade War
President Trump has long used tariffs not just as economic measures but as political leverage. For example, he imposed a 50% tariff on Indian imports to pressure New Delhi over Russian oil purchases. He did the same with Brazil, hoping to influence its handling of former president Jair Bolsonaro’s prosecution. However, without the emergency tariffs, his ability to negotiate will be weakened. Trade deals struck that locked in these tariffs could collapse if the court invalidates them.
Retail Industry Feels the Tariff Shock
While the legal fight unfolds, Trump’s decision to scrap the 'de minimis' exemption has already rattled the retail world. For nearly a decade, shipments under $800 entered the U.S. duty-free. That policy fueled e-commerce growth and allowed small businesses on platforms like Etsy, eBay, and Shopify to thrive. But with Trump’s executive order ending the exemption, every small parcel now faces tariffs and customs checks. Retailers such as Tapestry, owner of Coach and Kate Spade, now expect profits to fall by hundreds of millions of dollars.
Consumers Caught in the Crossfire
For shoppers, the fallout is clear: higher prices and fewer choices. Imported goods from clothing to specialty foods now carry added costs, hitting low-income families the hardest. A recent study estimated U.S. consumers could pay nearly $11 billion more annually, or about $136 per household, due to the policy shift.
The combination of court challenges and retail upheaval raises doubts about the sustainability of Trump’s trade policy. If the Supreme Court invalidates his emergency tariffs, his most powerful weapon in the trade war will vanish, while changes to small-business operations are negatively impacting consumers.
