Weekly Update - United States: the return of trade uncertainty

The U.S. Supreme Court’s decision deeming so‑called “reciprocal” tariffs illegal has revived uncertainty surrounding U.S. trade policy. Overall, however, the increase in tariffs appears to have had a more limited macroeconomic impact than initially expected. The effective rate applied to total imports has remained below initial announcements, in a context marked by numerous exemptions. In this environment, we estimate that U.S. growth should remain dynamic despite this more uncertain outlook.

A court ruling that heightens trade uncertainty. The Supreme Court’s judgment on the illegality of the so‑called “reciprocal” tariffs highlights two sources of uncertainty. The first concerns the potential reimbursement of tariffs already paid by importers. These tariffs were the main instrument used by the government to raise trade barriers after Liberation Day in 2025. In total, the United States collected nearly USD 200 billion in additional tariffs compared with 2024. The court’s decision now opens the door for importers to request reimbursement of the duties paid, which could further widen the fiscal deficit. The second source of uncertainty relates to the response of the U.S. executive branch, which has already announced the introduction of a flat 10% tariff on imports from most countries and covering most goods. This measure already raises questions about its legal basis, with the government invoking a balance‑of‑payments crisis risk to justify it. Moreover, the introduction of this flat tariff could challenge certain existing trade agreements. The United Kingdom would face a tariff rate higher than the one set in its bilateral agreement with the United States, while China would, on the contrary, see its tariff rate decrease under the new framework.

Tariffs with overall moderate effects. Nearly one year after Liberation Day, the tightening of trade policy has indeed had effects on activity and inflation, but they have proved more limited than anticipated at the height of tensions. While growth remained robust throughout 2025, private investment excluding AI recorded a slight contraction. Job creation also slowed significantly, with a modest decline in manufacturing employment over the year. Durable goods inflation accelerated to 2%, helping keep headline inflation close to 3%—above the central bank’s target but well below the levels seen during the sharp inflationary episode of 2022. Finally, the trade deficit did not narrow and reached USD 1.2 trillion in 2025. These less‑negative‑than‑expected effects are mainly explained by an effective tariff rate far less disruptive than announced. While this rate did rise from around 2% before Liberation Day to 9% in December 2025, it remains far below the 25% rate announced in April. It especially reflects the existence of significant exemptions depending on the origin and nature of imported goods. Canada and Mexico, the United States’ main trading partners, face tariff rates below 5%. Similarly, Taiwan benefits from low tariffs, as semiconductor imports remain lightly taxed. Since the new flat tariff would not change the rates applied to the United States’ major trading partners nor those levied on the key imported goods categories, U.S. growth should remain dynamic.

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