The Big Story: SCOTUS considers legality of Trump tariffs
All eyes were on the Supreme Court this week as justices weighed the legality of President Donald Trump’s sweeping global tariffs. During oral arguments on Wednesday, justices appeared skeptical that Trump’s “reciprocal” and “drug trafficking” tariffs were justified under a 1977 national emergency authority that allows the president to regulate certain foreign economic activity. The worldwide tariff regime has set off new trade tensions, invited retaliatory measures, and injected uncertainty into global markets, which make it harder for startups to scale globally.
The case centers on whether the Trump Administration has the power to impose tariffs under the International Emergency Economic Powers Act (IEEPA), a national emergency statute. In April, Trump used IEEPA to create a baseline tariff on products from every country, with varying higher tariffs on imports from most nations. The decision—followed by months of fluctuating trade moves, delayed implementation, and announcements of framework “deals.” Those deals sometimes acknowledged and sometimes bypassed key digital trade issues like digital services taxes that raise costs for services startups and data localization rules that create infrastructure headaches for startups. Broad-based tariffs not tied to specific, achievable goals tend to harm startups directly through increased costs, and indirectly by triggering retaliation from partners. States, lawmakers, small businesses, economists and more filed briefs with the Court, arguing that escalating global trade tensions have put U.S. companies, including startups, squarely in the crosshairs. Startups have consistently warned that tariffs and retaliatory digital trade barriers hurt their ability to operate abroad. In testimony before Congress, Dr. Olivia Walch, founder and CEO of Arcascope, explained that startup success in global markets depends on balanced and stable trade policies, and proliferation of digital trade barriers—including data localization requirements and levies on products that are delivered digitally—would restrict startups ability to grow globally.
However the Court rules—which could come as early as December—the Trump administration remains committed to a tariff-heavy strategy and could use sector-specific tariffs that directly target high-tech industries. Constructively addressing trade barriers—through proactive engagement, narrow and targeted measures, and cooperation with multilateral partners—is far more likely to produce the long-term stability necessary for U.S. startups to expand abroad.
Policy Roundup:
Noncompetes restrict workforce mobility, hurting startups. Engine submitted comments to the Federal Trade Commission (FTC) this week in response to its request for information on employer noncompete agreements. Engine warned that a patchwork of state laws would harm startups by creating uncertainty and limiting talent mobility. The comments also emphasized that overly broad noncompetes can inhibit knowledge sharing and halt new business formation, particularly among underrepresented founders. Engine urged the FTC to maintain a clear national rule banning noncompetes.
USMCA should be continued, build on strong foundation. Engine submitted comments to the Office of the U.S. Trade Representative (USTR) as it prepares for the 2026 Joint Review of the U.S.-Mexico-Canada Agreement (USMCA). The comments urged the USTR to maintain USMCA’s high-standard digital trade provisions, which have supported the growth of U.S. startups and expanded their access to markets across North America. To support startups, U.S. trade policy should protect cross-border data flows, export intermediary liability frameworks, and harmonize regulations impacting emerging technologies, including AI.
Telecom agency plans to eliminate broadband “nutrition labels.” The Federal Communications Commission is considering scaling back the “broadband nutrition labels” that require Internet Service Providers (ISPs) to disclose clear pricing, speed, and fee information. The labels were designed to make Internet billing as straightforward as a food label, showing users the real cost after promotions end and helping them compare providers. Weakening these requirements could create additional burdens and exclude would-be founders, startup employees, and users from fully participating in the innovation ecosystem, and easier for ISPs to bury hidden costs.
France launches criminal investigation over kids’ mental health online. French law enforcement has opened a criminal investigation into TikTok for allegedly failing to protect the mental health of young users following pressure from lawmakers, who said the app failed to remove and used an algorithm to push harmful user content to young users. As global policymakers and enforcers increasingly scrutinize Internet platforms that host user content, any new obligations for Internet companies meant to protect young users online should recognize the increased costs and privacy and cybersecurity risks that come from age verification mandates.
Startup Roundup:
#StartupsEverywhere: Cary, North Carolina. Deliveri is a logistics platform that helps customers lower costs and manage their shipping needs. Founded by Jason Brown and based in Cary, North Carolina, the company offers a multi-carrier shipping solution for e-commerce businesses in the U.S., with plans to expand this service into Latin America. We sat down with Jason to discuss his business, how recent changes to trade policies are impacting small businesses, the importance of the Qualified Small Business Stock (QSBS) exemption, and his future goals for Deliveri.
