New era of trade volatility: what the court’s decision and Trump’s tariff change mean for commodities

The recent U.S. Supreme Court ruling striking down President Donald Trump’s broad tariff measures has reshaped the global trade landscape, bringing both clarity and new uncertainty. The US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not give the president the authority to impose sweeping import tariffs, effectively blocking one of Trump’s most important trade tools. However, within a day of the ruling, Trump signaled that he would continue to pursue new tariffs. He invoked a temporary global tariff – initially 10%, then increased to 15%, the maximum allowed under US trade law.

Global response

The Supreme Court’s decision to strike down Trump’s previous tariff framework sparked varying global reactions. The European Commission immediately rejected any rate increase and said existing agreements must be respected. India has postponed a planned trade visit to Washington to reassess the implications of the ruling, reflecting broader uncertainty among US trading partners. This changing tariff landscape could cause instability in global trade flows as companies and governments reassess supply chains and tariff exposure. Existing trade agreements are coming under renewed pressure, with some partners likely to reconsider deals involving higher tariffs, while others may question the legality or longevity of the new duties.

Impact on the US dollar

The US dollar reacted mixed to the Supreme Court ruling against Trump’s previous tariffs. Initially, the price rose, reflecting a brief boost in confidence, but later fell as investors reassessed the ruling’s implications and shifted to safe havens such as gold and silver. Trump’s swift introduction of a 15% global tariff created new uncertainty, putting further pressure on the dollar as markets factored in potential trade disruptions and weaker economic sentiment.

Renewed interest in precious metals

Gold and silver rose sharply after the US Supreme Court ruling, as investors looked to safe-haven assets amid the sudden policy uncertainty. Gold futures soared past $5,200, while silver rose nearly 9% on the day of the ruling. When Trump quickly responded with a new 15% global tariff, demand for safe havens was further strengthened, supported by a weaker dollar and renewed trade concerns. Overall, both metals rose sharply as uncertainty about U.S. trade policy drove investors toward bullion.

Against this backdrop, precious metals are likely to remain supported in the coming days. Periods of policy instability and fluctuating trading frameworks often weaken sentiment towards the US dollar, prompting investors to switch to assets perceived as more stable.

Impact on energy raw materials

For energy commodities, the impact is likely to be felt through two main channels: currency volatility and uncertainty about trade flows. Any pressure on the US dollar – caused by legal ambiguity, changing tariff frameworks or perceived political risks – tends to affect the price of crude oil, as oil is priced in dollars globally. A weaker dollar generally supports higher energy prices, while a stronger dollar can exert downward pressure. However, the changing tariff landscape could indirectly influence global purchasing behavior. If uncertainty about tariffs disrupts trade flows or prompts buyers to diversify away from sources with higher tariffs, Russian exporters could see changes in market dynamics. Against this backdrop, countries like India – already a major buyer of competitively priced Russian crude – could further gravitate towards Russian supplies as a cost-effective alternative, especially if US tariff actions make other import routes more expensive or less predictable.

Renewed volatility in base metals

For base metals such as copper and aluminum, the near-term outlook is likely to be driven by dynamics such as policy instability, currency fluctuations and shifting supply chain expectations. Copper, which is closely tied to global manufacturing and investment sentiment, tends to react sharply to trade policy uncertainty. If rate-driven instability puts pressure on the U.S. dollar or clouds the outlook for industrial demand, copper could experience renewed volatility as markets reassess consumption prospects.

Aluminum, meanwhile, remains very sensitive to trade flows and cost structures. Any tariff-related disruption to cross-border metal movement, or shifts in demand from sectors such as automotive and construction, could dampen price increases and keep volatility high. Overall, with rate paths still uncertain and markets awaiting clarity, base metals are primed for cautious, choppy trading in the coming days.

This changing trade landscape has already created “tremendous uncertainty” for businesses and U.S. trading partners, heightening concerns about rising costs, supply chain realignments and the resilience of existing trade agreements. Ultimately, the Supreme Court’s ruling did not conclude the debate over U.S. tariff policy; it has opened a new and unpredictable chapter. As the administration pursues alternative legal avenues, such as the newly imposed 15% global tariff, the long-term direction of U.S. trade strategy remains unclear. Until greater clarity emerges, commodity markets are likely to remain on an uneven footing, shaped by caution, exchange rate movements and evolving global policy risks.

(The author Hareesh V is Head of Commodity Research, Geojit Investments)

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