In response,Trump reimposed tariffs under Section 122 of the 1974 Act, set to apply on Tuesday. This lets the President impose tariffs up to 15 per cent for up to 150 days. It would however require Congress's approval to extend beyond the deadline. The court's ruling applies to Trump's so-called "Liberation Day" tariffs, but not individual tariffs he imposed on specific countries or products. He also said that he would use Section 301 to open investigations to "protect our country from unfair trading practices of other countries and companies."

The new 15 per cent tax rate raises questions for countries such as the UK and Australia which had agreed a 10 per cent tariff with the US, creating additional uncertainty.

Stephen Dover, chief market strategist, head of , emphasised that IEEPA tariffs account for almost seven percentage points of the 11 per cent implemented US weighted average tariff rate. So, the immediate impact would be for tariffs to decline substantially. But the Trump administration sought to rebuild the tariff wall by expanding other US trade measures used to impose import duties which will lead to a period of heightened uncertainty as the policy adjusts.

“These measures have more constraints than IEEPA as used by President Trump. Section 232 and 301 measures are principally sectoral in nature, and require trade investigations prior to their application,” Galbraith said. “While legally durable, these tariffs could not be applied with the speed that has been typical of President Trump’s tariff policy to date. Section 122 allows the President to levy tariffs of up to 15 per cent to address balance of payments issues. Broad use of section 122 could well lead to further legal action, and given the 15 per cent cap on tariffs applied under this law, it again offers less flexibility than IEEPA. Long-term use of tariffs under this measure also requires Congressional authorisation."

“Other questions remain. Tariffs had become a meaningful source of revenue for the US government, and the loss of IEEPA will not only affect future revenue generating potential, but raises questions of whether these funds need to be repaid,” she continued. “Crucially, the court ruling did not address this issue, so legal action will continue. This will act as a source of uncertainty for affected businesses, and for the US fiscal outlook. Nonetheless, despite political and practical constraints, President Trump still views tariffs as a useful tool with which to gain leverage on trade and non-trade issues. Though the loss of IEEPA leaves tariff policy meaningfully more constrained, a policy pivot away from tariffs is unlikely.”

Wrapping up, Dover said the court's decision narrows the executive branch’s “emergency” tariff toolkit, without eliminating the tariff risk. “The Court left wiggle room for the Trump administration to reintroduce tariffs consistent with the law and constitution.” For investors, Dover believes that the removal of IEEPA tariffs is good news. “It is a form of fiscal easing, which will likely boost purchasing power and growth across many sectors of the economy,” he said. “It should lessen price pressures and therefore ease the Fed’s dual-mandate dilemma." While tariff uncertainty has returned through legal pathways, the scope of new tariffs in size and breadth has probably been curtailed by the ruling.