The Tariff Shell Game
On Friday, the Supreme Court struck down President Trump's emergency tariffs on global imports. Hours later, Trump announced a new 10 percent worldwide tariff on Truth Social, signed an executive order, and made it effective "almost immediately." The whiplash wasn't a policy reversal, it was a legal substitution that revealed how US trade policy now operates: presidents swap statutory justifications faster than trading partners can adapt, turning billion-dollar international agreements into bets on which legal authority comes next.
South Korea and India, which negotiated massive trade deals in recent months, now face a system where the rates matter less than the legal ground shifting beneath them. South Korea's $350 billion commitment, signed in November, lowered tariffs from 25 to 15 percent. India's $500 billion deal, finalized earlier this month, brought rates down to 18 percent on top exports like pharmaceuticals and textiles. Both agreements assumed legal stability. Both assumptions were wrong.
How the Legal Arbitrage Works
The Supreme Court ruling targeted Trump's use of emergency powers to impose tariffs. The decision didn't touch Section 232, the national security statute that still supports 50 percent duties on South Korean steel. When the Court blocked the emergency authority, Trump simply switched to Section 122, a different provision that allows broad tariff adjustments. The new 10 percent levy applies worldwide.
For South Korean companies in chemicals, pharmaceuticals, and semiconductors, the math initially looked favorable. Even with the new 10 percent rate under Section 122, they'd pay less than the 25 percent they faced before November's deal. But the legal foundation keeps moving. South Korean automobiles still carry a 25 percent tariff. Steel exports face 50 percent duties under Section 232, untouched by Friday's ruling. The negotiated 15 percent rate on other goods now sits alongside a 10 percent global levy, and no one's certain how the two interact.
India's tariff archaeology tells a similar story. The country started at 25 percent under Trump's emergency powers. Trump added another 25 percent on India's purchases of Russian oil, bringing the total to 50 percent. The trade deal negotiated this month dropped rates to 18 percent, but only after Prime Minister Modi agreed to stop buying Russian oil and committed to $500 billion in US imports over five years, covering defense, energy, and artificial intelligence. Now the 10 percent global tariff lands on top of the 18 percent baseline, and Indian officials are recalculating what they actually bought with half a trillion dollars in commitments.
What Countries Negotiated For
The South Korean Blue House released a statement Friday saying the government will "review the trade deal and make decisions in the national interest." South Korean officials warned that rapid changes could jeopardize major agreements, including a recent multibillion-dollar shipbuilding deal with the US. The concern isn't just about rates, it's about the impossibility of planning when the legal framework changes overnight.
Exports account for 85 percent of South Korea's gross domestic product. The US is the second-largest market. When South Korean executives negotiated the November deal, they weren't just seeking lower numbers. They wanted predictability: the ability to structure supply chains, price contracts, and make investment decisions based on stable rules. The Supreme Court ruling and Trump's immediate response demonstrated that stability doesn't exist.
India eliminated or reduced tariffs on all US industrial goods and a range of agricultural products as part of its deal. Indian textile manufacturers restructured operations around the 18 percent rate. Pharmaceutical companies adjusted pricing models. Those decisions assumed the 18 percent figure represented a floor, not a starting point for additional levies. Analysts now warn that uncertainty could persist until legal and trade frameworks are clarified, but the pattern suggests clarification isn't coming. The framework is the uncertainty.
The System's Design
This isn't a bug in US trade policy. Presidential discretion over tariffs is built into multiple statutes precisely to allow rapid adjustments. Section 232 covers national security. Section 122 permits broad modifications to existing trade agreements. Emergency powers authorize sweeping action during crises. The problem isn't that Trump switched from one authority to another, the problem is that the system offers enough legal cover for presidents to maintain tariffs indefinitely by rotating through justifications.
The Supreme Court can strike down past actions but can't prevent future ones. Countries that negotiated in good faith now understand they weren't negotiating with a country, they were negotiating with a moving target. Foreign leaders and executives assume that US tariffs are here to stay in one form or another, per reporting from multiple outlets covering Friday's developments. The assumption reflects a learned reality: the legal authority might change, but the tariffs won't disappear.
South Korea's multibillion-dollar shipbuilding deal hangs in limbo. Indian pharmaceutical exporters are recalculating margins. Both countries committed massive resources based on specific tariff rates and legal frameworks. Both now face a system where the rates are provisional and the frameworks are disposable. The shell game continues because the shells themselves, Section 232, Section 122, emergency powers, give presidents enough options to keep the ball moving.
Who's Left Holding the Bill
South Korean chemical and semiconductor companies celebrated briefly on Friday when the Supreme Court struck down the emergency tariffs. The celebration lasted hours. By evening, they faced a new 10 percent levy under different legal authority, layered onto existing Section 232 duties on steel and the negotiated 15 percent rate on other goods. The legal complexity creates operational chaos: companies must track multiple tariff regimes simultaneously, each justified by different statutes, each potentially subject to judicial review or presidential modification.
India's commitment to buy $500 billion in US goods over five years now looks less like a trade deal and more like a down payment on access to a market where the rules reset without notice. Modi agreed to stop buying Russian oil as part of the bargain. Indian officials reduced tariffs on US agricultural products. Those concessions were permanent. The 18 percent tariff rate they received in exchange turned out to be temporary, or at least subject to supplemental levies imposed under different legal theories.
The Supreme Court ruling exposed the mechanism, but it didn't change the outcome. Trump can't use emergency powers, so he uses Section 122. If Section 122 falls, another statute waits. Trading partners aren't negotiating stable agreements, they're buying time until the next legal shuffle. The shipbuilding deal South Korean officials worry about represents billions in contracts and thousands of jobs. Its survival depends not on the deal's terms but on which legal authority Trump invokes next, and whether that authority survives judicial review long enough to matter.