Even by Donald Trump’s standards, 2026 has been unusually frenetic.

From the ousting of Venezuela’s Nicolas Maduro, to his threats to annex Greenland, to his repeated vows to use military action against Iran, a lot has been happening. Amid all these geopolitical upheavals, there is one key tool that has pretty much defined both of Trump’s presidencies: tariffs.

Trump’s obsession with tariffs goes back a long way. Those who have observed the US president over the decades say it is tied to his view of the booming Japanese economy of the 1980s.

Trump formed the view that Japan’s economic success was based on what he felt were the unfair terms of its economic relationship with the US. He came to see tariffs as a magic bullet for balancing the terms of trade with countries — a view he has firmly held for more than 40 years, regardless of the country or the economic dynamics at play.

He often turns to tariffs when cornered. At the height of the Greenland crisis, when European leaders strongly rebuked his rhetoric, he threatened tariffs against those who opposed his plans. His resolute confidence in their effectiveness, regardless of the issue, seems unshakeable.

“I always say tariffs is the most beautiful word to me in the dictionary,” he said at his Inauguration Day parade in January 2025. “Tariffs are going to make us rich as hell, it’s going to bring our country’s businesses back.”

Trump’s preferred trade tool has been removed

That’s why Friday’s (February 20) US Supreme Court decision to rule his emergency tariffs illegal could be such a defining moment of his second term. Has the US top court’s decision removed the main leverage Trump had for his economic policy? Will it cause him to change course? Or will he simply double down?

Jacob Funk Kirkegaard, nonresident senior fellow with the Peterson Institute for International Economics, told DW that while the ruling doesn’t remove tariffs from the Trump playbook, it may blunt their Impact.

“No matter what happens going forward, this removes Donald Trump’s preferred avenue for making tariffs the issue with which he deals with any foreign policy or any policy issue overall by simply saying, you know, at very short notice, this country gets, you know, 20%, 30%, 50% tariffs,” Kirkegaard said. “That degree of unpredictability in US trade policy has now gone away.”

However, Trump’s decision, in the wake of the ruling, to install a 10% global tariff and then ramp it up the next day to 15%, was interpreted by some as a sign that he has no intention of softening his approach.

“So much for people who imagined a loss at the Supreme Court would lead to a more restrained trade policy,” Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, said on LinkedIn.

Not all of Trump’s tariffs have been invalidated either. Tariffs on steel, aluminum and cars — sectors of particular interest to China and the EU — remain in place. The Trump administration is also exploring ways to impose more tariffs under different statutes.

Yet so many of the so-called reciprocal tariffs Trump imposed on countries around the world have been taken off the table and replaced with the new global tariff. This new tariff already has an expiry date of 150 days due to legal restrictions and needs the US Congress’s approval to be extended.

What’s the future of Trump’s trade deals?

The most immediate question governments around the world now face relates to the trade agreements they struck with the US to reduce most of the “Liberation Day” tariffs. Will the Supreme Court decision tempt the likes of India or the EU to pull back from the deals they have done, in the hope of securing better terms?

Experts say countries are unlikely to allow existing deals to suddenly collapse, as they fear potential retaliation from the US further down the line, once the legal situation has become clearer.

“From our recent conversations with governments, we aren’t expecting to see any jurisdictions immediately walk away from the agreements that have been inked in recent months,” Andrew Wilson, deputy secretary-general of the International Chamber of Commerce, told the Financial Times.

They add that those countries that have already negotiated tariff rates of around 15% with Trump might be happy to leave things as they are.

However, initial reactions from EU leaders such as German Chancellor Friedrich Merz and French President Emmanuel Macronsuggest a belief that tariffs might be coming down for European exporters. The EU may yet pause the ratification process for the EU-US trade deal, with the European Parliament’s trade committee due to hold an emergency meeting on Monday.

Kirkegaard says that from an EU perspective, Trump’s new global tariff of 15% would likely already render the trade agreement broken, as that rate could be on top of the already agreed 15% rate.

“That would be unacceptable to the EU, and therefore we will have to see what the specific legal guidance with regard to transatlantic trade coming from the Trump administration will be,” he said.

Earlier this month, India and the US reached an interim trade agreement, which saw India agree to an 18% “reciprocal tariff.” Following Friday’s ruling, India has delayed plans to send a trade delegation to Washington for a meeting between the two sides to finalize the text of the deal, due to begin on February 23.

“Some deals — such as those with Switzerland or India — made explicit reference to the emergency tariffs, as the new tariff rates were framed as reductions from those emergency levels. As the legal reference tariff rate has now disappeared, these deals might have to be redrafted,” said Carsten Brzeski, Global Head of Macro for ING Research.

All eyes on Trump’s China visit

If Japan was the gateway drug for Trump on tariffs, China has become his most enduring fix.

The ruling has added a whole new dynamic to Trump’s planned visit to Beijing on March 31. When Trump launched his “reciprocal” tariff blitz last April, levies on China hit 145% at one stage. The two sides reached a fragile truce in May, significantly reducing the tariffs.

At first glance, Friday’s ruling seems to give Beijing a key advantage in any future trade talks, given that one of the main levers Trump has used against China appears to have been taken away.

However, analysts say that China will be careful to maintain calm ahead of the meeting next month.

“It will give China a moral boost in their negotiations with Trump’s team ahead of the summit, but they are prepared for the scenario that nothing actually changes in reality,” said Sun Yun, director of the China program at the Stimson Center, a Washington-based think tank.

Ali Wyne, an expert on US policy toward China at the International Crisis Group, says Chinese President Xi Jinping will not “flaunt or brandish” the Supreme Court ruling when the two sides meet and is instead likely to focus on maintaining positive relations with Trump.

Several analysts have pointed out that while Trump has lost his easiest method for issuing tariffs, he still has other ways — and this is unlikely to be lost on China or other countries, who may have an eye on more favorable terms, but who see maintaining positive relations with Trump as the best way to achieve it.

Will Trump take the off-ramp offered by the SC ruling?

Some have speculated that the ruling could provide Trump with a political off-ramp for his tariff policies, given that they have become unpopular with voters in an economy still grappling with persistent inflation.  A Washington Post-ABC News-Ipsos poll released on Friday found that 64% of voters disapproved of his handling of tariffs.

Then there’s the fact that many in Trump’s own Republican Party are critical of his tariff policy, particularly with the US mid-term elections due to take place in November. A few Republican members in both the US House of Representatives and Senate have at times voted to rebuke and curtail the tariffs on trade partners such as Canada.

“We don’t think that President Trump will use the ruling as a backdoor option to back down on his tariff agenda,” said Brzeski. “On the contrary, announcements since the Supreme Court’s ruling strongly confirm that Trump has no intention of removing his ‘most beautiful word’ from the English dictionary.”

Trump has very pointedly declined any off-ramp, for now.

“I have the right to do tariffs, and I’ve always had the right to do tariffs,” he said after Friday’s ruling.

That remains true, but clearly not in the way he previously thought. Precisely how that will impact the effectiveness of his go-to policy tool will become apparent in the months ahead.

Edited by: Ashutosh Pandey