China reviewing impact of US Supreme Court decision on tariffs, says commerce ministry

China reviewing impact of US Supreme Court decision on tariffs, says commerce ministry

China Reviews Impact of U.S. Supreme Court Tariff Ruling, Commerce Ministry Confirms

The U.S. Supreme Court's decision to strike down President Donald Trump's emergency tariffs under the International Emergency Economic Powers Act (IEEPA) has prompted China to reassess its trade strategies, according to the Chinese commerce ministry. The ruling, delivered on February 15, invalidated Trump's use of IEEPA to impose global tariffs, including a 15% rate on imports, but the administration has since announced plans to reimpose tariffs via Section 122 of the Trade Act of 1974, which allows for temporary 15% levies for 150 days.

The court's action temporarily reduced average U.S. tariff rates, with China, India, and Brazil seeing significant cuts—though rates remain elevated. For China, the weighted average tariff on goods dropped from 32% to 24%, offering short-term relief for exporters. However, analysts caution that the Trump administration is likely to pursue sector-specific or bilateral negotiations to rebuild its tariff framework, complicating long-term trade certainty.

In response, China has initiated a major revision of its foreign trade law, first updated since 2004, to strengthen legal countermeasures against trade conflicts. The draft law includes provisions for trade bans on foreign entities deemed threats to China's sovereignty and a "trade adjustment assistance" system to stabilize supply chains. The move signals Beijing's intent to bolster its ability to respond to U.S. trade pressures, even as it seeks to maintain a one-year truce on tariffs with Washington.

The ruling has also raised questions about the stability of bilateral trade agreements. Countries that secured lower tariff rates under Trump's reciprocal framework—such as the UK and Australia—may now seek renegotiation, while others, like Japan, face reduced competitive advantages. U.S. officials have urged allies to uphold prior commitments, but the path forward remains uncertain as Trump prepares for a planned visit to Beijing in April.

While the commerce ministry emphasized China's commitment to "reviewing the ruling's implications," the broader global economy faces renewed uncertainty. Economists note that Trump's ability to leverage tariffs as a negotiating tool—albeit through alternative legal channels—means trade tensions are unlikely to abate. For now, markets are bracing for a recalibration of U.S. trade policy, with China and other major exporters navigating a shifting landscape of tariffs and countermeasures.