After the U.S. Supreme Court's ruling voiding tariffs, American industry has plunged into unprecedented turmoil. In a single day, massive tariffs vanished only to be immediately replaced by substitute tariffs at even higher rates, leaving corporations in a severe emergency over calculating import unit costs.
As tariff imposition and nullification swung back and forth like hot and cold baths, the fatigue felt by market participants driving the real economy has already passed its limit. The unpredictable tariff policy uncertainty is directly adding to corporations' management burdens. Corporations that suddenly can't forecast costs are shunning new investment and sharply cutting hiring.
On the 22nd (local time), major outlets reported that renewed confusion over tariff barriers is casting a dark cloud of weakened investor sentiment and slower hiring across the U.S. economy. Corporations in the United States that rely on imports to make or sell products are in immediate crisis. After the Supreme Court's nullification on the 20th erased existing tariffs and raised hopes for expense savings, corporations received the opposite over the weekend: a claim for a 15% universal tariff. A prior notice that a different law would be used to levy a 10% tariff jumped to 15% with a single social media post. Some price-sensitive industries even complained that calculating import unit costs has become meaningless.
Manufacturers sourcing key parts from overseas and distributors with tightly structured margins can't even gauge how much to raise selling prices. Unable to lock in long-term cost structures, they have halted next year's business planning altogether. The BBC assessed that the highly volatile trade policy led by the Trump administration is throwing the global economy into confusion and imposing extreme uncertainty on both corporations and consumers.
A large number of corporations are scrambling to reclaim the massive tariffs they say they unfairly paid in the past, citing the latest ruling voiding tariffs. But practical barriers are exceedingly high. The government is unlikely to readily allow tariff refunds that would damage public finances. Fox Business, citing Heather Long, chief economist at Navy Federal Credit Union, said, "The government is likely to wage an all-out legal fight to block refunds," adding, "In particular, small and midsize corporations lacking capital and information will suffer immense pain trying to get their money back." Small importers now face long-term management pressure as they shoulder endless litigation expenses and time for refunds, on top of the newly imposed 15% tariff burden.
Not only importers but also other institutional sectors such as manufacturers are seeing their activities rapidly contract under wild policy uncertainty. Manufacturers, unable to reasonably forecast the business environment, are cutting external expenditure and fighting to secure internal cash. Large capital expenditure plans to build new plants or upgrade aging facilities have been indefinitely postponed one after another. In an unstable situation where tomorrow's tariff rate is unknown, few executives will rashly deploy massive capital. This weakened investment appetite naturally translates into a chill in the job market.
Some say that even if certain corporations win tariff refund suits and pocket a windfall thanks to the Supreme Court ruling, it will be hard for that money to immediately revitalize the broader economy. Fox Business, citing analysis by Michael Feroli, chief economist at JP Morgan, reported that total tariff refunds "could reach $150 billion (about 217 trillion won) to as much as $200 billion (about 289 trillion won)." Feroli said, "If this massive sum flows back to consumers through lower product prices, economic activity would be greatly boosted," but noted, "Given today's extremely unsettled market conditions, corporations are far more likely to stash the refunds as rainy-day funds." Even if the windfall flows into the real economy, if it doesn't go to investment or hiring and remains locked in vaults, the overall fiscal stimulus effect for the national economy is likely to be minimal. In other words, tariff policy confusion is drying up cash flows and delaying growth in a vicious cycle.
Policy turmoil sparked from within is also dealing a serious blow to the United States' negotiating power and policy credibility. Key U.S. allies, including Korea, Japan and the European Union (EU), are exhausting significant diplomatic bandwidth and voicing fatigue as they respond to tariff threats that change by the day. David Lubin, a senior research fellow at the U.K. think tank Chatham House, said, "America's unfathomable policy decision-making process is appearing disorderly on the world stage, ultimately creating conditions favorable to China." Amid an internal crisis where corporate investment sentiment is faltering and even the job market is wobbling, there are also concerns that unless tariff uncertainty is quickly contained, the U.S. economy will have to pay the price of a prolonged downturn.