US SC misses the point: Trump tariffs are obsolete, algorithms rule the economy

Last Friday, the US Supreme Court called out Trump tariffs being an infringement of a Congressional prerogative by the president. But the real story is not about tariffs. Tariffs, after all, are so delightfully analogue. They involve ships, containers, customs officers and occasionally men in fluorescent vests shouting into walkie-talkies. They belong to a world that the 1977 International Emergency Economic Powers Act (IEEPA) understood - a physical economy where value could be seen, counted and, when necessary, taxed with theatrical seriousness.

We are no longer in that world. Today's economic power is less about steel and soybeans, more about software quietly deciding what you see and buy, whom you date, and whether your loan application deserves mercy. Algorithms now shape markets faster than any tariff wall ever could. Platform architectures decide which businesses exist. AI systems make hiring, pricing and credit decisions at a scale that would make even the most energetic trade bureaucrat need a lie-down.

Consider this mildly alarming statistic: roughly 90% of market value of the largest firms now sits in 'intangible' assets - data, software, networks, brand capital, and other things that can't be loaded onto a truck, inspected at a port or dramatically seized for television.


The Supreme Court has essentially told Trump: 'If you want to reshape the physical economy, please show us the paperwork.' The awkward question is: who, exactly, is showing the paperwork for the intangible economy?

While Washington was busy arguing about tariffs - the economic equivalent of debating horse saddles in the age of jet engines - the real engines of economic power quietly migrated into server farms and ML models. These systems were not always debated in Congress. They were rarely voted on. In many cases, they were not even consciously designed by a single identifiable human. They emerged from optimisation loops that relentlessly pursued engagement, efficiency or profit until entire markets began behaving differently.

The physical economy had friction. Ships took time. Factories required permits. Labour unions asked inconvenient questions. Power accumulated slowly enough for institutions to notice and occasionally intervene.

The intangible economy has the subtlety of a viral meme and speed of financial panic. Network effects can crown monopolies before regulators have finished their Arabica. Data advantages compound invisibly. AI systems learn, iterate and scale while policymakers are still drafting consultation papers. In that context, the court's tariff ruling feels less like a finale, and more like a trailer for a much larger constitutional thriller.

The next decade will not be defined by fights over who can tax imported widgets. It will be defined by battles - in courts, legislatures and increasingly nervous boardrooms - over who authorises decisions of extraordinary economic consequence when those decisions are made by code rather than cabinet secretaries.

And this is where India should stop watching this judgment like it's merely another episode of US political drama. India, too, is sprinting headlong into the intangible economy. Its DPI, AI ambitions, fintech explosion and platform ecosystems are moving faster than its statutory imagination. What remains uneven is coordination between executive enthusiasm and judicial safeguards.

The US ruling is a reminder that institutional legitimacy cannot be reverse-engineered after power has already scaled. Executives everywhere possess an understandable temptation to move fast and regulate later. Courts, meanwhile, are forced into the uncomfortable role of constitutional traffic police, waving down policies that have already sped halfway down the highway. That is not healthy governance but institutional improvisation.

For India, the lesson is not that courts should become hyper-activist, or that executives should become timid. It is that both must evolve a shared doctrine for the intangible era. When economic power increasingly resides in algorithms, data monopolies and AI decision systems, the old playbook of waiting for visible harm may prove dangerously slow.

The judiciary must develop intellectual tools to interrogate invisible power. The executive must resist the seductive belief that technological urgency justifies procedural shortcuts. And parliament must rediscover the lost art of explicitly authorising economic revolutions it claims to welcome.

Because the hardest problem is no longer Trump tariffs. It is legitimacy in a world where the most consequential economic decisions may arrive without signatures, without meetings and sometimes without any human author at all. No court ruling, however elegantly written, will solve that for us.