The US Supreme Court’s decision to strike down the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) for tariffs has removed one of the White House’s fastest trade weapons — but not the tariffs themselves.

In his latest Trade War Update, “Supreme Court Cancels IEEPA – Analysis and Implications,” Judah Levine, Head of Research at Freightos, argues that the immediate policy shift may be less dramatic than headlines suggest. The longer-term implications for freight markets, however, could be significant.

“For air cargo, these tariff changes could likewise be reflected in some increase in US bound volumes in the coming months. But with de minimis still suspended, we’re unlikely to see a big or sudden volume surge for air cargo either.”

The ruling invalidates the administration’s reliance on IEEPA for most of last year’s country-specific tariffs, including fentanyl-related duties imposed on China, Mexico and Canada. Within hours, the White House responded by introducing a global tariff under Section 122 of the Trade Act, initially at 10% and reportedly set to rise to 15%, effective until late July.

On the surface, the move looks like escalation. In practice, Levine notes, it largely preserves existing trade barriers.

Tariffs shift, barriers remain

Country-level impacts vary. China and Vietnam see a five-percentage-point reduction compared to prior IEEPA levels. The EU baseline remains unchanged. The UK faces a five-point increase. Brazil experiences the sharpest drop, from 40% down to 15%. Section 232 sectoral tariffs and Section 301 duties remain intact, as does the suspension of de minimis. According to Yale’s Budget Lab estimates cited in Levine’s analysis, the overall effective US tariff rate declines by only around two percentage points.

In other words, while the legal basis has shifted, the cost environment for importers remains largely intact. The administration has signalled that it intends to restore tariffs through alternative mechanisms before Section 122 expires. However, unlike IEEPA, tools such as Sections 232 and 301 require federal investigations, often taking months before duties can be implemented. Several probes are already underway.

For freight markets, this procedural shift may matter more than the headline rate changes.

The end of instant tariffs?

Levine highlights that IEEPA’s defining feature was speed. It enabled immediate tariff action across a wide array of issues, many not directly trade-related. That rapid-response capability allowed the administration to credibly threaten tariffs on short notice, frequently unsettling freight markets.

Without IEEPA, the pace of policy shifts may slow.

The threat of tariffs remains. But if new duties must pass through formal investigation channels, sudden overnight disruptions to supply chains could become less frequent. For ocean carriers and air cargo operators, that may mean fewer abrupt booking surges tied purely to political announcements — though structural uncertainty remains.

Rates still following seasonality

Freight rates currently reflect seasonal dynamics rather than trade war shock. Transpacific ocean rates eased last week, with Asia–US West Coast prices down 3% and East Coast rates slipping 1%. Asia–North Europe declined 1%, while Asia–Mediterranean edged up 2%. Carriers have increased blank sailings to manage capacity, with flexibility to restore space if demand materialises.

Air cargo shows similar patterns. With de minimis still suspended, a sudden tariff-driven surge is unlikely. China–US air rates fell 15% last week, while China–Europe prices dropped nearly 10%, reflecting the Lunar New Year lull.

Even if US-bound volumes rise, distinguishing tariff-driven increases from the typical post-holiday rebound may prove difficult in the near term.

For many shippers, the relatively modest tariff reduction for most countries – and the high levels of uncertainty – may not be enough to spur a frontloading surge, especially if they suspect the White House may ultimately soften its stance due to political concerns.  “So, we’ll probably see somewhat stronger US import volumes in the coming months, and possibly an earlier start to peak season, than we otherwise would have, but we may not see the levels of frontloading that tariff threats spurred last year as most shippers remain cautious.”

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