Tariff Ruling Could Help Reduce Crisis-level Consumer Pessimism

Following the US Court of International Trade ruling on tariffs it is likely to have a positive impact on businesses, and could help to reduce crisis-level consumer pessimism especially in the US.

George Lagarias, Chief Economist at Forvis Mazars said:

We expect a positive market and business reaction to the news. At the very least, the ruling paves the way to dent some of the sharp economic impact of tariffs and give businesses further time to prepare. It could also help with retail sales, reducing crisis-level consumer pessimism especially in the US.

Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs – which can’t exceed 15% for the time being.

Still, we are very far from addressing the broader economic and business uncertainty. The White House can explore different legal avenues, including temporary measures. A 10% to 15% 150-day global tariff is still 4-6 times higher the previous average and can significantly slow down the global economy. The US administration can also broaden sector tariffs, agree with Congress to quickly build cases and approve tariffs just against America’s biggest trading partners, or it could simply win the appeals.

Tariff debate heats up as legal basis comes under fire

Lale Akoner, global market analyst at eToro says: “Using the International Emergency Economic Powers Act (IEEPA) as a basis for imposing tariffs is legally untested and is now coming under increased scrutiny.

“This does not necessarily mean tariffs are disappearing any time soon, as the federal appeals court is likely to take a more favourable view of them. What it does signal, is the beginning of a lengthy legal battle, one that could ultimately reach the Supreme Court, a development with significant market implications.

“That said, other options remain on the table. The US administration could pivot to the Balance of Payments Act (Section 122), the Tariff Act of 1930 (Section 338), or initiate Section 301 investigations to reintroduce tariffs under an alternative legal framework. So, while legal challenges are important, they are far from the final word.”