The week the tariff map got redrawn - again.
The Supreme Court's IEEPA ruling finally landed, and the signal it sends is this: the legal basis for most of Trump's sweeping tariff authority just got vacated. That doesn't mean tariffs are going away - it means the mechanism is shifting, and the window for duty refunds may be opening. Meanwhile, the Strait of Hormuz is a ghost waterway with 3-4 ships transiting per day where 130+ used to pass. Freight rates are falling on paper. Total costs are up 30%. And China is quietly cementing itself as the supplier to the suppliers - even the ones you thought you diversified into.
A lot moved this week. Here's what matters for your business.
The Supreme Court Just Struck Down the Legal Basis for IEEPA Tariffs
In Learning Resources, Inc. v. Trump, the Supreme Court ruled that IEEPA - the International Emergency Economic Powers Act - does not authorize the president to unilaterally impose tariffs. This is the same legal tool used to justify the broad tariff structure that hit China imports hardest. The Court vacated those tariffs. The Court of International Trade has now ordered Customs and Border Protection to begin liquidating affected entries - meaning refund calculations may be coming.
Why it matters for importers: Don't pop the champagne yet. The ruling removed one mechanism, not the policy goals behind it. The administration is already pivoting to Section 301, Section 232, and Section 122 - all of which have their own legal foundations. If you paid IEEPA-based duties in 2025, get your trade counsel on the phone now. Refund windows may be narrow and move fast.
The Strait of Hormuz Is Running at 3% Capacity
Iran's de facto blockade of the Strait of Hormuz - now entering its fourth week - has throttled one of the world's most critical shipping chokepoints to a trickle. Visible traffic has collapsed from more than 130 vessels per day to an average of 3-4 daily, according to NYT analysis of AIS data. Most major carriers have rerouted around the Cape of Good Hope. Maersk confirmed it's using the Suez Canal as its primary alternative - adding 10-14 days per voyage.
Why it matters for importers: If you're sourcing anything that touches Middle East manufacturing, Indian Ocean lanes, or Europe-Asia trade, you're already feeling this. Freight rates on the surface have been falling, but add war risk surcharges, fuel surcharges, and longer routing, and total shipping costs on Europe-Asia lanes are up 30% according to Cosmo Freight data. Budget accordingly for Q2.
China Isn't Losing the Supply Chain War - It's Winning the Upstream Game
A Fortune analysis reveals what's actually happening inside the "China diversification" story: China is becoming the supplier to the suppliers. As brands shift final assembly to Vietnam, Indonesia, Thailand, and India to sidestep US tariffs, Chinese manufacturers are capturing the components and intermediate goods business feeding those factories. The US government replaced roughly two-thirds of its direct China sourcing - but ASEAN factories are running on Chinese inputs.
Why it matters for importers: If your diversification strategy is "we moved production to Vietnam," your supply chain may still be China-dependent at the component level - you just can't see it as easily. That matters for tariff compliance (country-of-origin rules are getting stricter), for risk concentration, and for negotiating leverage.
Freight Costs Are "Down" - Until You Look at the Full Bill
Container spot rates posted their sixth straight week of declines. On paper, that's a win for shippers. In practice, war-related surcharges - fuel, security, and risk premiums - are now appearing on both ocean and air shipments. Domestic truckload line haul rates have also been volatile, hit by weather disruptions against a backdrop of shrinking carrier capacity. Tighter CDL licensing rules going into effect this month are expected to further pressure trucking capacity through Q2.
Why it matters for importers: Watch the full landed cost, not the spot rate headline. If you're using ocean spot rates as your primary freight benchmark right now, you're missing surcharges that could be 20-30% on top. Get your 3PL or freight forwarder to break out your full cost structure - surcharge by surcharge - before you commit to Q2 pricing with retail partners.
That's the week.
Supply Signal goes out every week with the signals that actually move the needle for importers and brands. If your supply chain is under pressure — from tariff shifts, freight volatility, or sourcing changes you didn't see coming — book a free intro call with our team at 330 Trading Co. No pitch, just a look at where you're exposed.
Supply Signal is published weekly. Follow @SupplySignalAI for daily intel between issues.