The U.S. Supreme Court on Feb. 20 struck down tariffs that President Donald Trump has imposed on imports from countries around the world, ruling that levies instated under the 1977 International Emergency Economic Powers Act (IEEPA) are unconstitutional. Trump called the ruling “deeply disappointing” and has vowed to impose a new 15 percent global tariff under Section 122 of the Trade Act of 1974. What does the Supreme Court’s ruling mean for tariffs that Trump has imposed on goods from countries in the Western Hemisphere, and which countries and sectors will be affected most? How feasibly can Trump impose new tariffs on countries in the hemisphere using other laws? What does the ruling mean for the Trump administration’s broader foreign policy goals in the Americas?
Kellie Meiman Hock, member of the Inter-American Dialogue’s Board of Directors, senior counselor at McLarty Associates and former U.S. diplomat and trade negotiator: “Friday’s Supreme Court determination was historic and removes the easiest mechanism for threatening ‘emergency’ tariffs linked to alleged geopolitical threats, illustrated most starkly with Greenland but at times with Canada, Brazil and Mexico. Taking IEEPA threats off the table might lead to less/different drama in the ongoing USMCA review, but the decision will have zero impact on President Trump’s longstanding commitment to tariffs as a policy tool. U.S. Trade Representative Jamieson Greer quickly stressed that his office considers negotiated Agreements on Reciprocal Trade (ARTs) to remain fully in force, meaning the ART texts for El Salvador, Guatemala, Argentina and likely Ecuador (which is close to being signed) should remain unchanged. They lock reciprocal tariff rates at 10 percent, so if President Trump moves the new Section 122 tariffs to 15 percent as threatened, ART partners could potentially benefit. But tariffs are only one component of ARTs, which reinforce World Trade Organization and CAFTA-DR disciplines and introduce new commitments around non-tariff barriers, digital trade, geographical indications, forced labor and other provisions. Importantly, the ARTs introduce obligations around ‘third countries’ (read: China) in the ‘Economic and National Security’ section, targeting not only Chinese imports, but inbound investment. The agreements obligate to varying degrees that countries ‘coordinate’ export control efforts and sanctions. These demands aren’t going anywhere and will be challenging given heavy Chinese involvement throughout the region. Preservation of the carve-out for USMCA-compliant goods and CAFTA-DR textiles/apparel in Friday’s tariff announcement was critical, but countries need to anticipate new Section 301 investigations by the U.S. Trade Representative. Brazil’s is ongoing, with a broad scope that is likely a harbinger of the depth of future investigations.”
Sol Azcune, political analyst at XP Investimentos: “The Supreme Court ruling represents a significant constitutional check on the president’s use of emergency powers. For countries across Latin America, the decision invalidates IEEPA-based measures, including the 10 percent reciprocal tariffs introduced in early 2025 and, where applicable, additional country-specific surcharges. In practical terms, the immediate impact for the region is meaningful but uneven. Exporters that were subject to elevated reciprocal or punitive tariffs may see relief, particularly in agricultural and commodity sectors. However, the ruling does not automatically trigger refunds for duties already paid, and those questions will likely be resolved through lower courts. Moreover, tariffs imposed under other statutory authorities—such as Section 232 on national security grounds or Section 301 in response to alleged unfair trade practices—remain in place. As a result, key regional exports including steel, aluminum and selected manufactured goods may continue to face U.S. duties. President Trump’s swift move to impose a temporary global tariff under Section 122 of the Trade Act of 1974 underscores the administration’s determination to preserve tariffs as a central policy tool. While Section 122 is time-limited and subject to congressional constraints, it demonstrates that alternative legal pathways remain available. Additional Section 301 investigations are also feasible, particularly in sectors tied to strategic supply chains. For U.S. foreign policy in the Americas, the ruling introduces greater legal clarity but not necessarily greater predictability. Tariffs are likely to remain intertwined with broader diplomatic and strategic objectives. For Latin America, this means that although one legal foundation has been removed, trade relations with Washington will continue to be shaped by shifting policy instruments and ongoing legal and political negotiations.”
Rodrigo Abud, managing director of Panorama in Monterrey, Mexico: “In hindsight, the November oral arguments had already foreshadowed what was coming, as there was widespread skepticism about the Trump administration’s legal authority to impose tariffs by invoking a national emergency. Refunds on an estimated $130 billion to $175 billion in collected tariffs are now possible, but only for those who act quickly through a technically demanding legal process. The administration pivoted immediately to Section 122 of the Trade Act of 1974, allowing a temporary tariff of up to 15 percent for 150 days. Not all goods are affected equally. Products qualifying under USMCA or CAFTA-DR remain exempt, as do critical minerals, energy products and natural resources the United States cannot produce domestically. Countries heavily reliant on commodity exports face the greatest uncertainty, as do manufacturing sectors in Mexico operating outside USMCA protections. Looking ahead, Section 301, which targets unfair trade practices, and Section 232, which authorizes tariffs on national security grounds, represent additional tools the administration has signaled it intends to pursue. The ruling has been framed as a restoration of institutional checks and balances, but it offers only a partial constraint. Congress will shape how far these tools can be extended, but the administration retains a broad legal arsenal that keeps its trade agenda very much alive. Trade is only one dimension of U.S. leverage in the hemisphere. Migration policy and security cooperation represent equally powerful mechanisms. The ruling may have narrowed one avenue, but the United States retains considerable influence to shape the economic and political landscape of the Americas.”
Mark Langevin, adjunct professor of global commerce and policy at the Schar School of Policy and Government at George Mason University: “The Trump tariffs have not lessened trade with Latin America and the Caribbean (LAC) but have encouraged regional exporters and their governments to diversify. Indeed, the tariffs prompted the conclusion of negotiations over the protracted European Union-Mercosur trade deal in January, underscoring the search for trade stability. Nevertheless, LAC is responsible for 20 percent of total U.S. trade, with Mexico leading the way. Surprisingly, LAC’s trade with the U.S. grew by 6.4 percent in 2025 despite higher tariffs, surpassing pre-pandemic levels. In December, the United States enjoyed a $4.3 billion monthly trade surplus with Central and South America, in sharp contrast with its looming $14.5 billion deficit with Mexico, reaching a total of $196.9 billion for 2025. The U.S. deficit with Mexico has narrowed modestly in the past year but more can be done, including helping Mexico diversify its exports. Last week’s U.S. Supreme Court ruling on IEEPA tariffs and the Trump administration’s response—yet more historically high tariffs— encourage further diversification, except for Mexico, which remains locked into the North American market for now. LAC exporters who have lost U.S. market share, such as Brazilian steel producers, continue to seek relief through lobbying and bilateral deals with Washington. Meanwhile, rising U.S. demand for other regional exports, such as Chilean copper and Peruvian avocados, continues despite higher duties at the border. Generally, higher tariffs contribute to U.S. inflation, curbing purchasing power and making the region’s exports to the largest market in the hemisphere more expensive. For decades, policymakers turned to trade liberalization to contain inflation, but Washington has chosen another path, one that includes the expansion of Section 232 national security tariffs on steel and other semi-manufactured goods from Brazil and elsewhere. This roadmap undermines efficient trade, economic partnerships and geopolitical cooperation in the region. Perhaps the time has come for an Americas-wide trade negotiation.”
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