Highlights

• Trump announces a 10% global tariff under Section 122 and pledges new Section 301 investigations after the Supreme Court limits emergency tariff authority.
• China's 85–90% control of rare earth processing puts supply chains in the blast radius as tariff escalation threatens oxides, magnets, and EV components.
• Trade policy volatility rises while U.S. dependency persists—unless expanded tariffs pair with accelerated domestic processing capacity and capital deployment.

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President Donald Trump moved swiftly after the Supreme Court ruled he lacked authority to impose sweeping tariffs under emergency economic powers. Within hours, he announced a 10% global tariff under Section 122 of the Trade Act of 1974 and pledged to initiate new Section 301 investigations.

In his remarks, Trump said he had been a “good boy,” exercising restraint so as not to influence the Court. He argued the ruling frees him to use even stronger statutory tools — including Sections 232 (national security) and 301 (unfair trade practices). He also alleged foreign interests were influencing the majority, though no evidence has been presented publicly to support that claim.

For markets, the message is simple: trade friction is not receding. It is recalibrating.

What the Court Did — and What It Didn’t

The Court rejected the use of emergency economic authority for broad tariff deployment. It did not invalidate Section 232 tariffs, nor existing Section 301 actions. Those remain fully intact. Section 122 allows temporary tariffs for up to 150 days without congressional approval. Section 301 can justify longer-term trade actions after an investigation.

The president’s core legal argument — that alternative statutes provide broad authority — is grounded in existing trade law. However, legal authority does not equal economic insulation.

Investors should distinguish between courtroom limits and executive maneuverability.

The Rare Earth Fault Line

Rare earth supply chains sit directly in the blast radius.

China controls roughly 85–90% of global rare earth processing and dominates magnet production. The United States remains heavily dependent on imported oxides and permanent magnets.

Tariff escalation — particularly under Sections 232 or 301 — directly affects:

• Rare earth oxides
• NdFeB magnet assemblies
• EV drivetrain components
• Defense procurement supply chains
• Midstream separation economics

Yet tariffs alone do not create separation capacity. They increase price signals faster than they build refineries.

The Missing Data

The president highlighted record stock indices and tariff revenue. He did not address softer macro signals, including uneven job growth (in fact, there is increasing chatter about a troubled job market) or stress in commercial and residential real estate.  Markets operate on full balance sheets, not selective metrics.

Tariffs can strengthen negotiating leverage. They can also compress margins in downstream industries reliant on imported inputs.

Industrial strategy must match trade policy.

REEx Analysis: Power Is Processing

As Rare Earth Exchanges™ has chronicled, we are in Great Powers Era 2.0, where trade statutes are instruments of strategic competition. But strength is measured in magnet tonnage and separation throughput — not press conferences.

If expanded tariffs are paired with accelerated permitting, capital deployment, and demand guarantees for domestic rare earth processing, the U.S. midstream could gain ground.

If not, volatility rises while dependency persists.

Trade is now a permanent variable.

And rare earth markets will register the tremors first.