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The Merchant · n°181 · February 26, 2026

Court ruling threatens to cause new tariff chaos

Figure of the week

$1300 Tariffs cost the average US household $1000 in 2025 and the figure will rise to $1300 this year if the policies stay in place. The figures came from an analysis by the Tax Foundation.

Quote of the week

“No one can make sense of it anymore. Do new tariffs not constitute a breach of the deal? Regardless, no one knows whether the US will adhere to it or even be able to.” Bernt Lange, Chair of the European Parliament Committee on International Trade, responded with outrage to President Trump’s latest tariff announcements.

Court ruling threatens to cause new tariff chaos

Some shippers may have still held out hope that a US Supreme Court ruling against a large part of the Trump administration’s tariffs would restore some predictability to US trade policy. But following the court’s ruling this weekend, the reverse seems to be the case. Trade deals with the EU, China and India could all be affected. For its part, t he EU has paused ratification of its trade deal with the US, citing concerns about Washington’s response to the ruling . The EU Parliament said it would seek further clarity from the US. Among the questions that needed to be answered were whether this was a breach of the deal, or whether the US would be able to stick to the terms of the agreement, lawmakers said. Most analysts had initially expressed confidence that the US’ trading partners would stick to previously negotiated deals. President Donald Trump made his position on this clear on Truth Social: “Any country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. Buyer beware.” The court’s ruling that Trump had wrongfully invoked emergency powers will only affect the so-called Liberation Day tariffs, leaving others in place. However, as expected, the Trump administration has vowed to forge ahead with its tariff policy by other means. This underlines the fact that shippers will not be getting the certainty and predictability they are seeking anytime soon. Trump responded to the decision with two new quick-fire tariff announcements. The first, a 10% tariff on general goods, was quickly superseded by threats of a new 15% tariff. However, he appears to have partially rolled back the latter threat - at least as far as the UK and EU are concerned. In any case, the Supreme Court’s ruling still leaves the White House with many weapons to wage its trade war. Justices did not rule on the repayment of existing tariffs, leaving that to lower courts. So what will change? BNP Paribas analyst William Bratton said the ruling could lead to an even more chaotic tariff strategy . This could feature ad hoc tariffs based on national security concerns, or allegations of restrictive trade practices. On the plus side for shippers, some of the likely measures the White House will turn to such as expanded export controls on strategically critical products will not affect them. Another question is how the ruling will affect the forthcoming US-China trade talks in April. In this case, the broad consensus is that Trump will have reduced negotiating leverage. “He has effectively had his wings clipped on his signature economic policy,” said Wendy Cutler, senior vice president at the Asia Society Policy Institute. There have also been reports that India will consider renegotiating some of the clauses in its trade agreement with the US. Overall, the roller-coaster tariff ride for shippers of the last 10 months is unlikely to stop, and may get bumpier before it gets better.

Shippers warned of heightened CBP scrutiny

With trade policy becoming a key focus of the Trump administration, shippers are facing increasing risk from heightened customs enforcement . Air Cargo Week this week warned shippers, “Compliance is no longer optional,” in the face of increased audits, even of small packages, and rising penalties. The publication warned that not only companies but individual employees can be held responsible for bringing goods into the United States. As a result, they could face potential civil penalties, criminal liability and whistleblower actions. “These are no longer distant threats. They’re very real risks shaping everyday business decisions,” it said. Attempts to evade tariffs by transshipment or other means could lead to further penalties. H1 figures of CBP audits in 2025 indicated it was on course to significantly exceed the recoveries. In H1 alone, totals recovered reached $192 million, well above the $117 million figure for all of 2024. AI-driven tools are helping customs officers spot patterns of noncompliance and making audits easier to carry out. Court cases are now showing that individual employees can face liability for noncompliance, even when not the importer of record. Meanwhile, t he DOJ is prioritizing customs fraud as a white-collar enforcement area. ” Accurate classification, valuation and origin reporting are essential. Internal audits, employee education and proactive ver ification of shipments are critical to reduce exposure ,” the article added.

Carriers intensify blankings amidst Red Sea fears

Carriers are planning to blank close to 40 Trans-Pacific services over the next fortnight as efforts to support falling spot rates intensify . A total of 37 blankings across the major networks are expected between weeks eight and nine. More are scheduled for March, with many shippers adopting a wait-and-see approach. Unsurprisingly then, January imports at Port of Los Angeles were down 13% year on year. However, Port of LA Executive Director Gene Seroka maintained an optimistic attitude. He said: “Purchase orders are not being canceled. This is something we’ve witnessed in other years that were far bumpier from an economic standpoint. This is a good sign.” Seroka expects volumes this year to decline by under 10% year on year. He also stressed that this figure should be compared against elevated 2025 volumes, which occurred due to extensive front-loading. However, Sea-Intelligence took a less upbeat tone. “Growth in Europe and US consumer spending on goods is trending downwards. And for container shipping, it is now noteworthy that furniture spending growth is negative,” it said. Events in the Middle East are likely to have a longer term influence on capacity and whether carriers need to take more radical steps to prop up rates. Any attack on Iran by US forces will likely lead carriers to postpone any plans to return to Red Sea routings. This will mean, for now at least, that they only need to deal with current levels of capacity oversupply. A return to Suez Canal routings would free up large amounts of extra capacity and cause carriers a serious headache over how to manage supply and demand. But that in turn would require the easing of tensions between the US and Israel and Iran. For now, weak rates are handing shippers negotiating long-term contracts leverage. Those sticking to spot rates are likely to see further declines, albeit accompanied by increased delays from high levels of blankings .

🤔 Did you know ?

Just as US freight operations were recovering from the last winter storm, another has struck, causing more than 5,700 flights to be canceled. The storm caused transport activities on the US Eastern Seaboard to become severely disrupted. While New York City has declared that the storm had ended, it is expected that, once again, transport hubs will take time to deal with the backlog in operations.

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👋 See you next week, The Merchant team

Sources

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