The immediate macroeconomic impact of the recent tariff ruling is negligible. However, a potential economic boost could occur in Q3 and Q4 if the temporary 150-day tariffs expire and investigations for new tariffs are delayed, leading to increased consumer demand and goods disinflation.
The temporary 15% tariffs under Section 122 expire near the midterm elections. Given the political unpopularity of high tariffs, it is unlikely the administration will raise them further in the medium term, effectively capping rates at this level to appeal to voters concerned about affordability.
Immediate tariff relief on consumer goods is minor (1-4%), but a significant opportunity exists after the 150-day temporary tariff period. If no new sector-specific tariffs are implemented, categories like apparel could experience a dramatic 16-17 percentage point tariff reduction, boosting purchasing power.
The recent tariff ruling does not affect all trading partners equally. Nations like Vietnam, with high exposure to the now-defunct IEPA tariffs, will see significant changes. In contrast, countries like South Korea, whose exports are mainly subject to other unaffected tariffs (e.g., Section 232), will see little impact.