The Supreme Court could soon curtail President Trump’s ability to swiftly impose tariffs on allies and adversaries around the globe.
But that hasn’t slowed down Mr. Trump, who has issued a series of new, belligerent threats against European countries in recent days that have threatened to start another trade war with some of America’s closest allies.
Speaking to reporters on Monday, Mr. Trump casually threatened a 200 percent tariff on French wine and champagne, unless Emmanuel Macron, the president of France, chose to join a “board of peace” Mr. Trump set up last year for Gaza.
“I’ll put a 200 percent tariff on his wines and champagnes, and he’ll join, but he doesn’t have to join,” Mr. Trump told reporters.
The threat came just days after Mr. Trump said that eight European countries would be hit with escalating tariffs unless they agreed to sell the Danish territory of Greenland to the United States. The regional bloc has staunchly resisted that demand, describing it as destabilizing for global peace, as some countries have started to explore retaliatory measures.
Legal experts said that Mr. Trump would most likely issue the new tariffs using the same emergency law that he has used to target imports from nearly every country during his second term. That law, the International Emergency Economic Powers Act, is under scrutiny at the Supreme Court, after small businesses and states sued on grounds that Mr. Trump had overstepped his authorities to tax imports from nearly every U.S. trading partner.
Jennifer Hillman, a professor at Georgetown University Law Center, said that Mr. Trump had abused the law to declare “anything he wants” — from Brazil’s prosecution of Jair Bolsonaro, a political ally of Mr. Trump’s, to the president’s desire to take over Greenland — “to somehow be an unusual and extraordinary threat to U.S. security.”
“He is attempting to turn a limited sanctions statute into a broad mandate to do anything,” Ms. Hillman said.
“I don’t know if the Supreme Court justices have already made up their minds in the IEEPA case, but I would hope that if they have not, that this further abuse of IEEPA would reinforce the need for the court to step in and declare that IEEPA cannot be used in this way,” she added.
By midday Tuesday, Mr. Trump’s newest ultimatum appeared to trouble financial markets around the world, as investors braced for the possibility of a trans-Atlantic, tit-for-tat dispute that could harm both sides. Yields on U.S. bonds spiked, the S&P 500 dropped over 1 percent and the Vix volatility index, known as Wall Street’s fear gauge, rose to its highest since November. The administration largely shrugged off the turbulence.
Scott Bessent, the Treasury secretary, attributed the market gyrations instead to hiccups in the Japanese bond market. Speaking at the World Economic Forum in Davos, Switzerland, Mr. Bessent told European leaders to “sit back, take a deep breath, do not retaliate” and await Mr. Trump’s arrival at Davos this week.
If Mr. Trump proceeds with his tariffs — and Europe responds — growth in U.S. economic output could fall by half a percentage point next year, according to a report released Monday by Oxford Economics. Some experts questioned whether the president’s threats might ever achieve their intended result, too.
“Tariffs are typically not a great tool for getting governments to do what you want, but they’re particularly ill-suited for something like this, where you already have tariffs in place,” said Scott Lincicome, the vice president of general economics at the Cato Institute.
He added: “It beggars belief that a 10 percent tax that’s mainly borne by Americans is going to somehow cause all of Europe to cave on something as serious as this.”
Other legal experts questioned how much the Supreme Court decision would actually curtail the president’s power. The nation’s justices have been weighing the president’s use of IEEPA, a 1977 law, to swiftly raise and lower tariffs on a variety of trading partners over the past year.
Some analysts described Mr. Trump’s threat of tariffs over Greenland as his most outlandish and unconventional use of the statute to date. But the president has relied on the emergency law to impose tariffs for a variety of reasons, including trying to reduce trade deficits, stopping inflows of illegal drugs and addressing other international situations.
The court could decide to revoke some or all of those tariffs — or it could decide to allow the president’s approach. Mr. Trump could then impose steep duties by other means — and his aides have indicated they are exploring options to do so — but none would allow the president to raise or lower tariffs so flexibly.
Ryan Majerus, a partner at King and Spalding, said he would be “surprised” if the Supreme Court held that the emergency law could never authorize tariffs.
“I think the administration believes it will retain the authority to use this law at least in some situations dovetailing with national security interests,” Mr. Majerus said.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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