Oil Prices Down as Supreme Court Outlaws Trump Tariffs


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- U.S. President Donald Trump's use of emergency laws to 
enact high import tariffs has been outlawed by the Supreme Court in a decision 
Friday (2/20) that could negatively impact oil prices if markets react to any 
hurt of the federal government's finances and its handling of the economy.

   "We hold that IEEPA does not authorize the President to impose tariffs," 
Justice John Roberts, writing for the court's majority, said in the ruling that 
referred to the International Emergency Economic Powers Act.

   Trump is the first U.S. president to attempt to use the IEEPA for import 
taxes in the near 50-year history of the law. His administration imposed 
universal 10% to 20% tariffs on all imported goods while targeting China with 
specific 60% duties to incentivize domestic production. The broad trade 
penalties covered every global trading partner of the U.S., with Canada, Mexico 
and the European Union also significantly impacted besides China.

   Crude prices remained in negative territory in Friday's mid-morning trading 
after the Supreme Court decision, with NYMEX WTI futures for March delivery 
down $0.39 at $66.04. The oil market had rallied extensively over the prior two 
days on supply risks associated with Iran.

   "It's hard to immediately tell what the longer-term impact of this ruling 
would be on energy markets, though the logic dictates that when the 
government's handling of finances or the economy is negatively impacted, it's 
never too good for oil demand," a hedge fund manager in oil told DTN.

   Trump did not immediately react to Friday's ruling, but said in a social 
media post earlier in the week that a negative court decision on the tariffs 
could have dire consequences for his administration, which has collected 
billions of dollars from importers and would potentially have to refund those 
monies if lawsuits were filed against it.

   "If the Supreme Court rules against the United States of America on this 
National Security bonanza, WE'RE SCREWED!" the president wrote in that post.




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