Trump's many tariff tools mean consumer prices won't go down, analysts say
#Trump tariffs #Supreme Court ruling #Price stickiness #Trade Act 1974 #Consumer prices #Tariff tools #Economic impact
📌 Key Takeaways
- Trump quickly shifted to alternative tariff tools after Supreme Court ruling
- Multiple legal authorities allow continued tariffs despite court decision
- Price stickiness prevents immediate consumer price reductions
- Companies have already passed most tariff costs to consumers
📖 Full Retelling
President Trump's tariff policies remain in effect despite a Supreme Court ruling against his use of the International Emergency Economic Powers Act for tariffs, as economists predict consumer prices won't decrease due to the administration's alternative tariff tools and the economic principle of 'price stickiness,' according to analysis on February 25, 2026. The Supreme Court struck down Trump's authority to impose tariffs under the 1977 International Emergency Economic Powers Act, which had been used for about half of all import taxes, but within hours of the ruling, Trump announced he would use Section 122 of the Trade Act of 1974 to implement worldwide tariffs at 15%. Economists from institutions like the Peterson Institute for International Economics and the University of Texas at Austin explain that while some specific tariffs might decrease, the overall level will remain high, and consumers won't see substantial price reductions at grocery stores or shopping malls. The concept of 'price stickiness' further explains why prices tend to adjust slowly to underlying factors, with businesses often waiting before changing prices even when costs fluctuate, and many companies still in the process of determining how much tariff cost to pass on to consumers.
🏷️ Themes
Trade Policy, Consumer Economics, Legal Authority
📚 Related People & Topics
Nominal rigidity
Inertia of prices in economics
In economics, nominal rigidity, also referred to as price stickiness or wage stickiness, describes a situation in which a nominal price is slow to adjust or resistant to change. Complete nominal rigidity occurs when a price remains fixed in nominal terms for a relevant period of time. For example, ...
Tariffs in the Trump administration
Topics referred to by the same term
Tariffs in the Trump administration could refer to:
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Original Source
Business Trump's many tariff tools mean consumer prices won't go down, analysts say February 25, 2026 5:00 AM ET By James Doubek A shopping cart with groceries at a Target store in New York City on April 10, 2025. President Trump has several ways to impose tariffs, despite a Supreme Court loss. Timothy A. Clary/AFP via Getty Images hide caption toggle caption Timothy A. Clary/AFP via Getty Images Consumers likely won't see cheaper prices at the grocery store or shopping mall, economists say, despite the Supreme Court striking down many of President Trump's tariffs. There are a couple reasons why: For one, the president has many tools to impose tariffs and the court decision last week only deemed one of them unconstitutional . Within hours of the ruling, Trump said he was using a different law to reimpose taxes on global imports. "The administration's made it very clear that they are not turning away from tariffs," says Mary Lovely, a senior fellow at the Peterson Institute for International Economics. Business These small-business owners are owed tariff refunds. Will they ever get them? The second reason is a little more complex, a concept known as "price stickiness." Here's what to know about why shoppers won't see price reductions anytime soon. Presidential tariff tools "The legal tool to implement it, that might change, but the policy hasn't changed," U.S. Trade Representative Jamieson Greer told ABC over the weekend. The Supreme Court struck down Trump's authority to impose tariffs under the 1977 International Emergency Economic Powers Act , which no president had used to implement tariffs before. But, it's worth noting that these tariffs only accounted for about half of all the import taxes the government had been collecting. Now that imposing tariffs under the law has been outlawed, the administration has quickly moved ahead with alternatives, even though they don't offer the sweeping power that Trump claimed to have under the IEEPA. Planet Money The Supreme C...
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