Weekly Buzz: Trump’s tariffs face a legal roadblock 🚧

President Trump’s trade war just hit a major legal speedbump. Last Friday, the US Court of Appeals for the Federal Circuit ruled that the president overstepped his authority by invoking emergency powers to impose sweeping global tariffs earlier this year. The tariffs remain in place until 14 October, pending a likely US Supreme Court review.

What’s going on here?

Back in April, Trump used the International Emergency Economic Powers Act (IEEPA) – a law designed for sanctions during national emergencies. The move pushed the average US tariff rate to about 19%, up from just 2.3% at the end of 2024, according to J.P. Morgan Global Research.

In a rare constitutional check on executive power, the court ruled that the IEEPA was never intended to allow such sweeping trade measures. However, with a conservative majority in the US Supreme Court, the final outcome remains unclear.

What does this mean for you?

The ruling might sound like relief for global trade, but the legal wrangling has only added to an already uncertain environment. Even if these tariffs are struck down, Trump’s administration has hinted at fallback options, including sector-specific tariffs or even the Smoot-Hawley Tariff Act from the 1930s.

Investors are understandably cautious: following the news, US markets pulled back and long-term Treasury yields edged higher as markets reassess the broader macro uncertainty. The concern isn't necessarily about the tariffs themselves, but about the unpredictability, which makes it harder for businesses to plan and investors to assess risks.

The legal process is likely to stretch over months, with the outcome far from guaranteed. It’s a reminder that the most resilient portfolios aren’t built around headlines. They’re diversified across regions and asset classes, and designed to stay the course through uncertainty.

(For a portfolio that’s designed with this all-weather approach in mind, check out General Investing.)

This article was written in collaboration with Finimize.

💡 Investor’s Corner: The smart way to invest in big ideas

Thematic investing sounds simple enough: find a trend you believe in and invest in a fund that tracks it. In practice, it’s not quite that straightforward. With hundreds of options on the market – and new ones launching all the time – it’s worth knowing how to separate genuine opportunities from the hype.

Start with clarity. The most effective thematic funds have a narrow, well-defined focus. A clean energy fund, for example, is easier to understand than a climate change fund, which might sprawl across hundreds of names in batteries, EVs, and agriculture. It's worth checking what's actually under the hood – look for funds holding "pure-play" companies that derive most of their revenue from your chosen theme.

Thematic investing works best as a complement to, not a replacement for, a diversified core portfolio. When you get your selection right, these focused plays can help capture specific growth opportunities that broader market exposure might overlook or dilute. The key is selecting the right vehicle, one that aligns with your conviction, offers clean exposure to the theme, and fits within your overall strategy.

(Looking for professionally researched thematic exposure? Check out Thematic Portfolios.)

📖 A Little Context: The Smoot-Hawley Tariff Act

Signed into law by President Herbert Hoover in 1930, the Smoot-Hawley Tariff Act raised US tariffs on over 20,000 imported goods, meant to protect American farmers and manufacturers during the early stages of the Great Depression. Instead, it triggered a wave of retaliation from trade partners, shrinking global trade by roughly 25% and worsening the downturn. Most economists now view it as a cautionary tale of protectionism, and how trade wars can spiral out of control.