Supreme Court Rules Trump Tariffs Unconstitutional—A Day of Tech Stock Surges and Apple Lawsuits
The U.S. Supreme Court has ruled in a 6-3 decision that President Trump's comprehensive tariff policy is unconstitutional. The court determined that the imposition of tariffs under the IEEPA (International Emergency Economic Powers Act) exceeded the President's authority. As a result, the Nasdaq 100 avoided a fourth consecutive week of declines, and technology stocks across the board surged. On the same day, news of a lawsuit filed against Apple by the state of West Virginia added to the complexity, making it a hectic day for both markets and policy.
1. Content of the Supreme Court Ruling—What Has Been Invalidated?
1-1. Illegality of Tariffs under IEEPA
The Supreme Court ruled that "the authority to impose taxes by designating international trade as an emergency is not included in the IEEPA." Bloomberg economic reporter Mike McKee explains, "Tariffs are taxes, and the IEEPA does not grant the President the power to levy them."
The ruling invalidates the reciprocal tariffs (tax rates of 10-50%) imposed on what was called "Liberation Day," as well as tariffs on Canada, China, and Mexico justified by the fentanyl crisis. Meanwhile, tariffs based on Section 232 (national security) and Section 301 (unfair trade practices)—such as those on steel, aluminum, automobiles, and many goods from China—are based on different legal grounds and are therefore outside the scope of this ruling.
1-2. Impact on Effective Tariff Rates
According to data from the Yale Budget Lab, the consumer burden under the IEEPA tariffs was an average effective tax rate of approximately 17%. Following this ruling, that figure is expected to drop to about 9.1%. However, as McKee points out, "The final tax rate will depend on which alternative measures the President chooses to use, and it is not yet determined."
2. The Trump Administration's "Plan B"—Overview of Alternative Measures
2-1. Available Tariff Authorities
The administration reportedly anticipated this ruling to some extent and had prepared multiple alternative legal grounds. The main options include Section 122 (emergency tariffs, up to 15%), Section 232 (national security), Section 301 (intellectual property/unfair trade), and Section 338.
However, each of these measures has its own constraints. Some require prior investigative procedures, and there are caps on tax rates. White House correspondent Kate Sullivan stated, "The IEEPA was the administration's core tool because of its flexibility and immediate effect. It is unknown whether a combination of alternative measures can achieve the same results."
2-2. Relationship with the China Visit
The timing of the ruling also intersects with the diplomatic schedule. President Trump is scheduled to visit China from March 31 to April 2, and the premise of U.S.-China trade negotiations, which had centered on IEEPA tariffs, has now changed. Diplomatic sources commented, "We are aware that the administration will take equivalent measures through alternative legal means, so we do not see this as a major change."
3. Market Impact—Surge Centered on Tech Stocks
3-1. Movements in Nasdaq and Semiconductor Stocks
Following the news of the ruling, the Nasdaq 100 avoided a fourth consecutive week of declines. Amazon, Alphabet, and Nvidia were the top performers in the index, and the Philadelphia Semiconductor Index also continued to rise. Scott Ladner, CIO of Horizon, stated, "The market welcomed the increased predictability of the operating environment. However, it is unclear whether this rise will hold until the administration's next move is confirmed."
On the other hand, he also noted a point of caution: "If the market were taking this as a final conclusion, we would see more leadership from small-cap and cyclical stocks, and long-term interest rates would be moving more. The limited reaction in the bond market indicates that uncertainty about the future remains."
3-2. Apple's Tariff Burden and Manufacturing Strategy
Apple is said to have paid approximately $3 billion in tariffs over the past year, and CEO Tim Cook had mentioned that about $1.4 billion of that would impact future earnings. Apple stock rose following the ruling, but the company's challenges remain complex. It must continue to maintain a presence in both the Chinese market while simultaneously continuing manufacturing there and diversifying into India and Vietnam. Reporter Annmarie Hordern pointed out, "Cook must simultaneously advance his commitment to the Chinese market and the diversification of the supply chain. That dynamic remains unchanged even after this ruling."
3-3. The Issue of Tariff Refunds
The Supreme Court's ruling addressed the 'illegality of tariffs based on IEEPA' but did not specify procedures for refunding tariffs already paid. That decision was left to the lower courts. Many retailers and manufacturers have already filed lawsuits in the Court of International Trade for refunds, and Justice Brett Kavanaugh noted that 'the specific mechanism for refunds will likely lead to confusion.'
4. Warner Bros. Sale Negotiations—The Battle Between Netflix and Paramount
Today's Bloomberg report also highlighted the competition between Netflix and Paramount Skydance over the acquisition of Warner Bros. Discovery.
Netflix co-CEO Ted Sarandos asserted, 'Our deal is the form the Warner Bros. board wants, and the proposal of $27.75 plus the value of Discovery Global is simple.' Meanwhile, Paramount has proposed a full company acquisition ($30/share, all cash).
Media and technology analyst Rich Greenfield (LightShed Partners) pointed out, 'While a full company acquisition looks simple, what the Warner board originally wanted was the separation of the streaming/studio division and the linear TV business. There is too much discussion that ignores that strategic intent.'
Regarding Paramount, he stated, 'Because they are confident that regulatory risks will pass, there is no incentive to significantly raise their bid. In some cases, it is more rational to continue investing on one's own like Netflix,' indicating that with limited time until the shareholder vote (in about four weeks), Netflix is likely to maintain its current advantage.
5. West Virginia Sues Apple—Issues Surrounding Child Protection
5-1. Overview of the Lawsuit
West Virginia Attorney General JB McCuskey sued Apple, alleging that the company 'knowingly ignored' the storage and sharing of child sexual abuse material (CSAM) by users on iCloud.
The comparative data he presented is clear: 'In 2023, Meta and Google removed or reported a total of over 35 million illegal images from their clouds. During the same period, Apple removed only 236.'
5-2. Apple's Position and Challenges
Appleprovides end-to-end encryption on iCloud, which is said to make CSAM detection difficult. Apple developed its own detection technology in 2021, but abandoned its implementation the following year due to privacy concerns.
Attorney General McCuskey stated, 'I understand the consideration for privacy, but when serious criminal acts are being committed, that protection should not apply,' suggesting the possibility of expanding investigations to other platforms.
6. Implications for Investors and Business Professionals
This Supreme Court ruling does not immediately stabilize the trade environment. The administration has multiple alternative means, and the level of the final effective tax rate remains fluid. The rise in tech stocks is a reaction to the 'partial resolution of uncertainty,' and it will still take time for the full picture of policy to solidify.
On the other hand, regulatory risks like the Apple lawsuit have highlighted the structural challenges faced by platform companies as a whole. The trade-off between encryption and content safety, along with data management in the AI era, is a medium- to long-term risk factor for platform businesses that requires close attention.
