The Supreme Court could soon limit President Trump’s ability to quickly impose tariffs on allies and adversaries around the world.
But that hasn’t slowed Mr. Trump, who in recent days has made a series of new, bellicose threats against European countries that risk sparking 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, decides to join a “peace panel” that Mr. Trump set up for Gaza last year.
“I’m going to put a 200 percent tariff on his wines and champagne, and he will join, but he doesn’t have to join,” Trump told reporters.
The threat came shortly after Mr Trump said eight European countries would face rising tariffs if they did not agree to sell the Danish territory of Greenland to the United States. The regional bloc has strongly opposed this demand, calling it destabilizing to global peace as some countries have begun to consider retaliatory measures.
Legal experts said Mr. Trump would most likely impose the new tariffs under the same emergency law he used to target imports from nearly every country in his second term. That law, the International Emergency Economic Powers Act, is being considered by the Supreme Court after small businesses and states sued, arguing that Mr. Trump overstepped his authority to tax imports from almost every U.S. trading partner.
But Mr. Trump appeared unfazed on Tuesday by the prospect of an adverse ruling that would undermine his trade strategy. At a wide-ranging news conference marking the first year of his second term, the president instead said he would simply “use something else” to try to punish other countries with tariffs.
“What we’re doing now is the best, the strongest, the fastest, the simplest, the most straightforward,” Trump said.
By midday Tuesday, Mr. Trump’s renewed ultimatums appeared to spook financial markets around the world as investors braced for the possibility of a transatlantic legal dispute that could hurt both sides.
U.S. bond yields soared, the S&P 500 fell more than 2 percent and the Vix volatility index, known as Wall Street’s fear gauge, rose to its highest level since November, even as Mr. Trump and his aides insisted markets remained resilient. The tumult was reminiscent of the early days of the president’s trade war, which also sparked global panic.
The government continued to largely shake off the turbulence.
Scott Bessent, the finance minister, attributed the market swings early Tuesday to hiccups in Japan’s bond market. Speaking at the World Economic Forum in Davos, Switzerland, Mr. Bessent urged European leaders to “sit back, take a deep breath, not retaliate” and wait for Mr. Trump’s arrival in Davos this week.
If Mr Trump continues with his tariffs – and Europe responds – U.S. economic output growth could fall by half a percentage point next year, according to a report published Monday by Oxford Economics. Some experts questioned whether the president’s threats would ever have their intended effect.
“Tariffs are not usually a good tool for getting governments to do what you want, but they are particularly bad for something like this where tariffs already exist,” said Scott Lincicome, vice president of general economics at the Cato Institute.
He added: “It’s hard to believe that a 10 percent tax borne primarily by Americans will somehow cause all of Europe to cave on something so serious.”
Some analysts called Trump’s threat of tariffs on Greenland his most outlandish and unconventional use of his emergency powers. But the president has relied on the law, known as IEEPA, to impose tariffs for a variety of reasons, with some of the goals outside the scope of trade, such as curbing the flow of illegal drugs and addressing other international problems.
Jennifer A. Hillman, a professor at Georgetown University Law Center, said that Mr. Trump had abused the law to declare that “everything he wants” — from the prosecution of Jair Bolsonaro, a political ally of Mr. Trump in Brazil, to the president’s desire to take over Greenland — “somehow represents an unusual and extraordinary threat to U.S. security.”
“He’s trying to turn a limited sanctions law into a broad mandate to do anything,” Ms. Hillman said.
She added that she didn’t know if or when the justices would have ruled on the legality of the president’s policies, but that she believed Mr. Trump’s recent actions would “increase the need for the court to step in and declare that IEEPA cannot be used in this way.”
On Tuesday, Mr. Trump described the tariffs he has imposed as a “perfect system” and expressed hope that the Supreme Court would do the “right thing for our country” by declaring his far-reaching duties legal. Otherwise, the president told reporters, exercising his remaining trade powers would be “more cumbersome.”
The court could decide to strike down some or all of those tariffs — or it could decide to uphold the president’s action. Mr. Trump could then impose high tariffs through other means — and his advisers have indicated they are exploring options for doing so — but none would allow the president to raise or lower tariffs as flexibly.
Ryan Majerus, a partner at King and Spalding, said he would be “surprised” if the Supreme Court ruled that the emergency law could never authorize tariffs.
“I think the government believes it will retain the authority to apply this law in at least some situations that are consistent with national security interests,” Mr. Majerus said.