Tariff Uncertainty Looms Over US Economy: Potential Impact on Gold and Silver Demand

US Supreme Court Ruling on Tariffs: Key Takeaways

Date: April 2025

The US Supreme Court has invalidated the 'Liberation Day' tariffs announced by President Donald Trump, marking a significant turning point in US trade policy and global trade governance.

Background:

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The court found that the President had overstepped his powers when he introduced sweeping global tariffs using the International Emergency Economic Powers Act (IEEPA) of 1977. The court held that the power to impose tariffs under the IEEPA vested in Congress, not the President.

Impact:

The White House has collected billions of dollars in tariffs, which could now face refund claims, creating fiscal pressure and adding near-term uncertainty to the global trade.

New Tariff Rates:

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President Trump replaced the invalidated tariffs with a 10% levy on all goods coming into the US under Section 122 of the Trade Act of 1974, later raised to 15%, the maximum allowed under the law.

Trade Agreements:

Many countries have finalized trade agreements with the US, including a reduction in tariffs on India to 18% from 50% by President Trump, citing efforts to reduce dependence on Russian oil.

Market Reaction:

The US Supreme Court ruling has led to a 1.4% rally in gold spot prices to $5,176 per troy ounce, while silver spot prices rose 4% to reach $87.83 per ounce.

Analyst Insights:

• JM Financial expects more appetite for safe-haven assets like gold, driven by concerns over debt and weakening growth in the US.
• Choice Wealth CEO Nikunj Saraf believes gold's recent jump was driven by policy-driven uncertainty around US tariffs, which weakened the dollar and pushed investors toward safe havens.
• Geojit Investments Head of Commodity Research Hareesh V said that gold prices have risen amid Trump's tariff turmoil and uncertainty surrounding their legality, and that ongoing trade tensions may still pressure the US dollar and support bullion.