The U.S. Supreme Court has ruled that President Donald Trump does not have the authority to impose tariffs. While markets have taken this decision in stride, the impact on cryptocurrencies is likely to be modest — at least for now — as political factors could influence the industry’s policy trajectory in Washington.
While Trump’s aggressive and sometimes tumultuous pursuit of tariffs under the International Emergency Economic Powers Act has ceased, the president has many other options for replacing those tariffs with those imposed by other legal bodies that govern U.S. trade. He told a news conference on Friday that after the “deeply disappointing” ruling, “as the entire court recognized in this terrible ruling, there are methods, practices, regulations and powers … that are even more severe than the IEEPA tariffs that I have at my disposal as president of the United States.”
“Other alternatives will now be used to replace the alternatives that the court wrongly rejected,” Trump said.
In the short term, anything policymakers care about in the coming weeks could threaten the U.S. Senate’s already fraught timeline to achieve the crypto industry’s top goal: passing the Digital Asset Market Clarity Act that governs the structure of U.S. crypto markets.
Ohio Republican Sen. Bernie Moreno, a staunch supporter of Trump and a vocal advocate of cryptocurrency, posted on social media site
On the other side of the aisle, Sen. Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, welcomed the Supreme Court’s 6-3 ruling but said it would not cause the harm to consumers that has already been done. Earlier this month, the Tax Foundation reported that tariffs cost an estimated $1,000 per household last year and $1,300 this year.
“The courts have struck down these damaging tariffs, but consumers and many small businesses have no legal mechanism to recoup the money they have paid,” U.S. Senator Elizabeth Warren said in a statement. “Instead, large corporations with armies of lawyers and lobbyists can sue for a refund of the tariffs and then keep the money for themselves. This is yet another example of a rigged game.”
However, the Cato Institute wants “tens of billions” of the “tens of billions” collected under the tariffs to be refunded.
“The refund process may be simple, but it seems more likely to require more litigation and paperwork — an especially unfair burden on small importers who lack the resources to litigate duty refund lawsuits but have never done anything wrong,” economists at the libertarian think tank said in a statement Friday.
Impact of the Cryptocurrency Bill
Despite the legal settlement, the tariff dispute and its aftermath will likely take center stage in this year’s congressional midterm elections, and those races could have far-reaching consequences for the cryptocurrency industry.
If Congress has not passed a market structure bill by this summer, the industry’s policy efforts will depend on the outcome of these elections, especially if the elections change majorities in the House or both chambers of Congress. Even if the crypto industry already has the Clarity Act by then, there are many other legislative initiatives on tax and Bitcoin in play reserve.
The Supreme Court’s condemnation of Trump’s illegal tariff regime could give Democratic candidates some boost in an otherwise close race.
As Warren said, Democratic candidates will try to convince voters that tariffs are hurting them personally. If enough Democrats win the House majority, they could make the current crypto policy push more difficult without requiring major revisions, imposing more restrictions on the industry.
Read more: Bitcoin rises, then falls as Supreme Court overturns Trump tariffs
