①The U.S. Supreme Court is expected to rule as early as this Tuesday on whether the Trump administration's tariffs are illegal, a decision that will impact many of Trump's strategies, such as his plan to acquire Greenland;
②Trump previously threatened that if a full agreement to acquire Greenland could not be reached, higher tariffs would be imposed on eight countries including Denmark and Norway; ③Analysts pointed out that if the Supreme Court rules the tariffs invalid, Trump’s threats would become meaningless.
The U.S. Supreme Court is expected to rule as early as this Tuesday on whether the Trump administration’s tariffs are illegal, and the result will introduce uncertainty into many of Trump’s strategies, such as his newly proposed plan to acquire Greenland.
Last Saturday, Trump threatened that if an agreement for the full acquisition of Greenland could not be reached, the United States would impose a 10% tariff on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland starting in February, with the rate increasing to 25% by June 1.
On Tuesday morning, Trump also announced at the Davos Forum that he would impose a 200% tariff on French wine and champagne. This move was a swift response to French President Macron, who had previously called on the European Union to take a tough stance against the United States.
However, analysts noted that if the U.S. Supreme Court rules the tariffs invalid on Tuesday, Trump’s threats would at least become meaningless in the short term. Wall Street broadly expects the Supreme Court to rule that Trump does not have the authority to impose tariffs on normal international trade under the International Emergency Economic Powers Act.
If the tariffs are ruled invalid,
UBS Group earlier noted in a report that the tariffs threatened by the United States might be overturned by the U.S. Supreme Court.
ING Groep analysts further explained that once the Supreme Court rules all previous tariffs implemented under the International Emergency Economic Powers Act invalid, Trump's recent statements regarding Greenland will also become void, and he will need to seek other tariff measures, which will require more time.
U.S. Trade Representative Jamieson Greer emphasized to the media on Monday that if the Supreme Court overturns Trump’s global tariffs, the U.S. government will immediately implement new tariffs.
US Treasury Secretary Bessent stated that the US government might invoke a 1974 act, which allows the US to impose a 15% tariff on countries with trade imbalances for a period of 150 days, or invoke a 1930 act, which permits the US to levy a tariff of up to 50% on nations that discriminate against American commerce.
However, Deutsche Bank noted in a morning report that given the hearings are scheduled for Tuesday and Wednesday, the Supreme Court is expected to release more opinions this week. Economists, however, anticipate that the ruling may not come until later this year, possibly as late as June.
Editor/Melody