U.S. Scrambles to Salvage Trade Deals After Supreme Court Strikes Down Trump's Tariff Authority
The Trump administration is racing to reassure trading partners that bilateral deals negotiated over the past year remain intact, even as the legal foundation for its broader tariff strategy crumbles following last week's Supreme Court defeat.
U.S. Trade Representative Jamieson Greer spent the weekend conducting damage control with foreign counterparts, insisting that agreements with China, the European Union, Japan and South Korea will hold despite the court's rejection of Trump's use of emergency powers to impose sweeping tariffs. The message: these deals were negotiated in good faith and both sides should honor them, regardless of what happens to the administration's now-blocked 15% global tariff.
"We want them to understand these deals are going to be good deals," Greer said Sunday on CBS's Face the Nation. "We're going to stand by them. We expect our partners to stand by them."
The problem is that America's trading partners aren't buying it. Within hours of Greer's television appearances, cracks appeared. The European Parliament's trade chief announced plans to propose freezing the EU's ratification of its U.S. trade deal until the administration clarifies its policy direction. India postponed talks scheduled for this week that were meant to finalize an interim trade agreement, citing the same uncertainty.
For CFOs managing global supply chains and currency hedges, the weekend's developments crystallize a familiar challenge: how do you plan capital allocation when the rules keep changing? The bilateral deals Greer referenced were negotiated under the implicit threat of Trump's emergency tariff authority. Now that the Supreme Court has stripped away that leverage, trading partners are recalculating whether the terms they agreed to still make sense.
Greer attempted to project confidence that alternative legal mechanisms would preserve U.S. negotiating power. He pointed to existing tariffs on China averaging 40% that don't rely on the emergency law the court struck down, and suggested ongoing investigations into foreign trade practices would provide sufficient leverage. "We have tariffs like this already in place on China, we have open investigations already," he told CBS.
The timing complicates Trump's planned visit to China starting March 31, where he's expected to meet with President Xi Jinping. Greer described the relationship between the two leaders as "strong," but that personal rapport now must substitute for the legal authority Trump wielded when these deals were first negotiated.
The administration's core argument is that trading partners signed these agreements knowing the Supreme Court case was pending. "I've been telling them for a year — whether we won or lost, we were going to have tariffs, the president's policy was going to continue," Greer told CBS. "That's why they signed these deals even while the litigation was pending."
That's technically true, but it glosses over the strategic calculation foreign governments made: better to negotiate favorable terms under duress than face unilateral tariffs. With the emergency authority gone, those governments now face domestic political pressure to renegotiate terms they can credibly claim were extracted under false pretenses.
For finance leaders, the practical question is whether these bilateral deals provide enough stability to justify long-term commitments. The answer depends partly on what alternative tariff authorities the administration can deploy, and partly on whether trading partners decide the uncertainty itself is reason enough to walk away from agreements negotiated in a different legal environment.
Greer's weekend media blitz suggests the administration recognizes the fragility of its position. When you're spending Sunday morning reassuring foreign governments that deals are still good, you're acknowledging those governments are having second thoughts. The question now is whether words alone can hold together an architecture built on legal authority the Supreme Court just demolished.
Responses (0 )