Tariffs used to be surgical tools, to be used with the utmost care. Under Trump, however, they’re becoming the fangs you show when you roar.
By :Pablo Rodas-Martini
The threat of tariffs is back. Trump is brandishing his favourite economic weapon once again. But two critical questions loom large this time:
A serious legal challenge
First, will he TACO again if the stock market nosedives, treasury yields spike and the dollar tumbles? Second: what will the Federal Circuit Court decide? Beneath the bluster a serious legal challenge that could kill Trump’s retaliatory tariffs.
TACO stands for ‘Trump Always Chickens Out’. The term was coined after the man who claimed that tariffs would make America rich again made a sudden U-turn after a few days of economic chaos.
‘Liberation Day’ tariffs illegal
In May 2025, the US Court of International Trade (CIT) dealt a severe blow to Trump’s tariff strategy. A panel of three judges unanimously ruled that Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) and declared the so-called ‘Liberation Day’ tariffs illegal. However, the following day, the Federal Circuit intervened by issuing a stay that left the tariffs in place pending appeal.
Despite claims that countries were ‘lining up’ to do deals with the US and Peter Navarro’s dramatic pledge that America would sign 180 trade deals in 180 days, the record is painfully thin. So far, there is a single finalised agreement with the UK. There is also an unpublished agreement with Vietnam. There is also a ‘mutual understanding’ with China that remains fragile and could collapse at any moment if Trump reverts to his anti-Chinese rhetoric.
The time bomb is ticking again
Now, the time bomb is ticking again. The oral hearing to decide on the CIT‘s ruling is scheduled for 31 July 2025. Whatever the decision, it won’t be the end of the matter. The losing party will appeal to the US Supreme Court. However, the Supreme Court is under no obligation to hear the case. In fact, it declines about 98% of cert petitions. I would bet that the Supreme Court will take the case, but who knows… They may simply decide to wash their hands of it.
Within constitutional boundaries
Even if the Supreme Court does take the case, though, don’t assume that it will side with Trump. Yes, the Court leans conservative. But conservative justices still have to decide within constitutional boundaries. Besides, a president who threatens to impose tariffs of 100%, 50% or 10% on any country he dislikes on any given day is clearly not using tariffs in the national interest, but rather as a nasty threat guided by his prejudices, mercurial temperament and capriciousness.
Foreign governments aren’t blind. They see the legal chaos. They hear the uncertainty. They’re in no hurry to sign trade deals with a country whose own courts could deem its tariffs illegal at any moment. Why commit to duties of 40%, 30% or even 20% when the entire framework could collapse based on a judicial decision? Why commit your country to something for many years when the retaliatory tariffs might turn out to be nothing more than scarecrows which Tariffs used to be surgical tools, to be used with the utmost care. Under Trump, however, they’re becoming the fangs you show when you roar
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