US Supreme Court Ruling Strips Trump of Tariff Authority as Iran Ceasefire Nears Collapse

The US Supreme Court has ruled against Donald Trump's 'liberation day' tariff announcements for overstepping his authority, stripping the president of a key tool he used to pressure other countries. Another US court last week compounded the setback by striking down the 10% global tariffs Trump announced in February to replace the duties thrown out by the Supreme Court.

"The president has lost something important to him, which is the ability to threaten tariffs on a Friday and impose them on a Monday," said Michael Smart, managing director at Rock Creek Global Advisors, an advisory firm in Washington. The rulings leave Trump with diminished room for maneuver as he heads to China today to meet Chinese President Xi Jinping.

Trump said the US ceasefire with Iran is on "massive life support" after rejecting Tehran's latest counterproposal as "unacceptable" and "stupid." The president told reporters in the Oval Office on Monday that he "didn't even finish reading it." The ceasefire, which both sides have repeatedly violated in clashes over ship traffic in the Strait of Hormuz, is close to collapsing.

The war is costing the US economy hundreds of billions of dollars in lost output, with inflation jumping to 3.8% in April, its highest level in three years, driven by a sharp rise in fuel prices. More than half of US voters disapprove of Trump's handling of the economy, according to a new FT poll.

Economists predict the price tag of the Iran war to US taxpayers will far exceed the $25bn estimated by the Trump administration. "It might not be felt immediately — you can patch something up for a while. But the scale of this financially is such that you can't cover it up forever," said Linda Bilmes, a Harvard professor and expert on the cost of US conflicts.