LIBERATION Day tariffs are history. Brace yourselves for what comes next.

The immediate economic impact will be more uncertainty, a slow and messy process to extract billions of dollars in refunds, and more tariffs.

The US Supreme Court’s ruling on Friday struck down a large portion of Trump’s global tariffs — his biggest legal defeat since returning to the White House.

The fallout from the battle of Scotus vs Potus will have lasting political, legal and economic implications, both domestically and globally. But in the short term the shipping sector should prepare for more immediate turbulence.

Having dismissed the decision “a disgrace” and called the justices “fools and lapdogs”, Trump got back to work and said he was imposing an additional 10% global tariff under Section 122. By Saturday that was 15%.

That’s the next 150 days covered, possibly, but what happens after that is not clear. 

The president has promised to reconstruct his tariff barriers, pledging “methods, practices, statutes and authorities that are even stronger than the IEEPA tariffs”. The reality is that the options open to him will take time and rein in some of his more freewheeling tendencies. 

The experts seem to broadly agree that this landmark decision will constrain the president’s ability to use tariffs for geopolitical events quickly. But that does not mean they won’t eventually happen, and so shipping is back to the uncertainty factor ruling its immediate future.

Could container lines see a sudden frontloading demand surge in the next weeks and months as importers race to get ahead of what comes next? Quite possibly, but with the Chinese New Year holidays still underway there will be no immediate surge of activity at that end.

As for the tantalising prospect of importers looking for reimbursements in excess of $150bn, well that’s not going to be a quick or easy process if it happens at all. 

Refunds are not automatic, they are procedural and while the legal community will be breathlessly calculating the fees they stand to earn off this process, everyone is in unchartered territory here.

As Supreme Court Justice Brett Kavanaugh warned in his dissenting opinion: “The refund process is likely going to be a mess.”

In short — buckle up. Shipping has another period of chaos heading its way.

Richard Meade,
Editor-in-chief, Lloyd’s List

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