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More turbulence ahead after Supreme Court's tariff slap down

By Li Yang | chinadaily.com.cn | Updated: 2026-02-23 17:25
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Photo taken on July 1, 2024 shows the US Supreme Court in Washington, DC, the United States. [Photo/Xinhua]

The Supreme Court of the United States has once again reminded Washington that even a government that insists on doing things its own way must occasionally read from the Constitution. In a 6–3 decision, the Court ruled that the executive branch exceeded its authority by using emergency powers to impose sweeping tariffs, a rebuke that landed with a soft judicial thud and a loud global exhale.

Within days of the ruling, the US administration signaled it would pursue a 10 percent global tariff under alternative statutory authority, underscoring that the legal setback had not prompted a change in its broader trade posture. The Supreme Court may have blocked one pathway, but the executive quickly indicated it was prepared to test another. The result is a peculiar form of governance by workaround, where legality becomes a moving target and the global economy a reluctant participant in the US' constitutional stress test.

Across the Pacific, China responded in measured terms. The Ministry of Commerce reaffirmed that China opposes unilateral tariffs, which violate international trade rules and US domestic laws, harm all parties and lead nowhere. But alongside the reiteration that cooperation benefits both sides while confrontation harms both, the statement added that Washington's search for alternative tariff tools will be closely monitored.

The founders vested the power to tax and levy tariffs in Congress because it is the branch closest to the people — the one meant to feel the heat when prices rise and supply chains buckle. Yet over decades, Congress has treated this authority like an heirloom: admired, rarely used and frequently delegated. When elected officials prioritize preserving their positions or party advantage over maintaining constitutional balance, the result is predictable. Oversight weakens, accountability diffuses, and the public's role in governance erodes. The danger is not individual ambition but institutional incentives that reward avoidance over responsibility.

Research offers a sobering lens. Studies show that when systems permit small ethical compromises without immediate consequence, those compromises accumulate. People rarely leap into misconduct; they slide into it, rationalization by rationalization. Institutions behave the same way. A tariff justified as an "emergency" today becomes precedent tomorrow. A "temporary" surcharge evolves into a revenue stream beyond normal legislative scrutiny. Eventually, the exception becomes routine.

In the US, the tariffs are sold as patriotic tolls paid by foreigners. In reality, findings consistently show that the overwhelming share of costs is borne domestically by importers, businesses and consumers. US households pay more at the register, small businesses absorb higher input costs and supply chains contort to avoid shifting duties. Globally, the consequences are measurable: the World Bank has estimated that trade tensions have shaved as much as 0.7 percentage points off global growth, while the International Monetary Fund warns that escalating tariffs could erase hundreds of billions of dollars in output over time. The United Nations has documented declines in cross-border investment during the tariff escalations, with developing economies hit hardest. Protectionism, it turns out, is the economic equivalent of everyone leaving the group chat at once.

Markets briefly rallied after the ruling — a sugar high of constitutional reassurance — but businesses remain wary. More than $130 billion in duties collected under invalidated tariffs may be subject to refund claims, threatening years of litigation and fiscal uncertainty. Major US ports have endured cargo surges followed by droughts as firms scrambled to beat tariff deadlines or reroute supply chains. Small businesses, supposedly shielded by protectionist walls, found themselves financing them instead.

The world's response has been pragmatic rather than ideological. Canada, the European Union and business groups from the United Kingdom to South Africa have called for clarity and predictability in US trade policy. Even US companies, those tireless evangelists of quarterly earnings, are pleading for a system that does not change with the morning news cycle. When policy becomes performance art — announced with flourish, suspended with fanfare, resurrected with encore enthusiasm — allies hedge, consumers delay purchases and companies postpone investment. Volatility, not strength, becomes the defining export.

A deeper constitutional unease has also been exposed. When major revenue streams operate outside the normal legislative process, the reaction is not merely economic but civic. People want decisions to flow from stable, accountable institutions. When volatility emanates from the top of the system, people and markets alike enter a holding pattern, waiting for the next legitimate institutional moment to reset the course. They do not collapse into helplessness; they pause, conserve, and wait for governance that has set a clear course rather than trying to find its way.

The Court's decision is a reminder — not a resolution. The US administration retains tools to reimpose tariffs through other statutes, and the temptation to do so remains strong. The global economy, meanwhile, has learned to read Washington's trade policy the way sailors read clouds: for signs of sudden storms.

But the ruling still affirms a constitutional principle that should never have required reaffirmation: taxation belongs to Congress, the branch designed to keep power closest to the people. The greater question is whether Congress will reclaim that role or continue its long retreat into the comfortable fog of delegation. The "democratic" stability of the US will not collapse in a single dramatic moment; but it will erode if institutions step back from shouldering the responsibilities that give them meaning.

For now, the gavel has fallen, the tariffs have stumbled, and the world is watching — not for who wins the next legal skirmish, but for the US administration's next improvisational demonstration that it is not to be denied. But in a global economy built on predictability and the rule of law, the US administration may find there are indeed limits on what it can do.

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