Yes, it’s what we first associate with Trump’s policies: Tariffs. Now someone dared to question them and it was the US Court of International Trade (CIT). On 29 May, this court ruled that most of the global tariffs imposed by Trump were illegal because he had overstepped his authority. It said Trump had improperly invoked the International Emergency Economic Powers Act (IEEPA) and therefore the court claims that trade deficits are not an emergency that justifies the president’s unilateral actions. Naturally, the administration scoffed at this decision and stated that it will lodge an appeal. This means that the case may ultimately reach the Supreme Court.
However, it appears that the long-term impact of the CIT decision will be limited as the US government has the tools to continue its tariff policy. Trump can apply alternative legal bases and increase pressure on industry tariffs that are not subject to the above-mentioned regulation. Therefore, key tariffs on major trading partners such as the EU, China or Japan are likely to remain in place even if the Supreme Court does not overturn the CIT decision.
What is perhaps even more important in the US is a series of legal changes that have just come into force. It’s “One, Big Beautiful Bill,” a law aimed at cutting taxes, stopping immigration, securing borders, promoting energy policy and cutting spending on certain social programmes. Trump called it “perhaps the most significant legislation in the history of the country.” Not everyone has such a positive attitude towards it. Suffice it to say, this bill was passed by the House of Representatives by a mere one vote (215 to 214).
On the one hand, the US could save USD 1.6 trillion thanks to the law by cancelling a range of expenditure. Spending on the green transition or gender transition, for example, would no longer be sponsored. On the other hand, the law increases the federal debt ceiling, defence spending and requires other new spending. There are also numerous tax benefits, including the elimination of tip and overtime taxes, benefits for cars made in the US and a 15% tax cut for families earning less than $80,000 a year. It is calculated that the law will result in 80% of households paying lower taxes in 2026, which should be an incentive to stimulate the economy. Yes, it’s true, but the national debt of USD 36.2 trillion will increase by around USD 3.8 trillion over the next decade – according to the US Congressional Budget Office.
Elon Musk expressed his disappointment with the law, saying it undermines his efforts to reduce government spending. His ways with Trump parted, Musk had to go and Trump repeated the mistakes of his first term when he too often made “purges” in the staff around him.
