US President Donald Trump has seen his tariff regime deemed illegal by America’s highest court, which will do away with his 30% tariffs on South Africa.
After hhis return to the White House in 2025, the US President announced a range of tariffs as per his America First Strategy.
South Africa, which has been a prominent target of criticism from the president, was hit with a 30% “reciprocal tariff.”
The tariffs were under the authority of the International Emergency Economic Powers Act (IEEPA).
The US is one of South Africa’s largest trading partners, and the tariffs would supersede many of South Africa’s duty-free exports under AGOA, which itself was recently renewed by Trump.
However, the US President has been dealt a blow from the US Supreme Court, which determined that he overstepped his legal authority regarding the IEEPA tariffs.
The deVere Group noted that the president made the move without congressional approval, with the conservative-leaning Supreme Court deeming it illegal.
Devere said that the ruling is a major setback for the White House, as tariffs were a massive part of Trump’s economic and foreign policy.
Responses to the move have been broadly positive, with stocks rising on the decision. Investors previously feared that the tariffs would hurt economic growth and company earnings.
“The SCOTUS decision was widely anticipated by market participants and therefore it wasn’t surprising to see a limited response in US rates,” said Ian Lyngen, Head of US Rates Strategy at BMO Capital Markets Corp.
“Pretty mild reaction so far. Market is not really sure what to do. The big issue would have been any notion of refunds,” added James Athey, a Portfolio Manager at Marlborough Investment Management.
Jane Foley, Head of FX Strategy at Rabobank, said that although the White House is expected to push on with tariffs, there are concerns about refunds in the meantime.
This could put pressure on the US Treasury market, which could further unsettle the USD, given the world’s largest economy’s weak fiscal position.
With reporting from Bloomberg
