In a rapid-fire response to judicial opposition, President Donald Trump has announced a hike in nationwide import tariffs from 10% to 15%. The move came less than 24 hours after the U.S. Supreme Court struck down his previous trade policy, ruling that the President had exceeded his executive authority. The high court’s 6-3 decision emphasized that major trade shifts require Congressional approval, a hurdle Trump bypassed by citing the International Emergency Economic Powers Act (IEEPA).
Infuriated by the ruling, Trump characterized the justices as a “disgrace to the nation.” Rather than backing down, he pivoted to Section 122 of the Trade Act of 1974. This specific provision, which has historically remained dormant, grants the executive branch the power to impose a temporary levy of up to 15% for a duration of 150 days. The President maintains that this mechanism is “legally tested” and will serve as a bridge while his administration drafts new, permanent trade barriers.
International leaders have reacted with swift concern. German Chancellor Friedrich Merz, who plans to visit Washington soon, warned that “constant uncertainty” acts as a poison to the global economy. Merz expressed disappointment, as many European firms expected a reprieve following the Supreme Court’s Friday ruling. Meanwhile, French President Emmanuel Macron praised the American “rule of law” for providing a counterweight to executive power, though he signaled that France would seek reciprocity rather than submit to unilateral taxes.
The economic impact of these tariffs remains a point of heavy contention. While Trump argues that the levies are essential to revitalize American manufacturing and punish countries “ripping off” the U.S., data suggests a different story. Previous collections under the IEEPA totaled $130 billion, but studies indicate that 90% of those costs were ultimately borne by American businesses and consumers. Despite this, the President has signaled he will fight any attempts by business associations to claim refunds.
As the Tuesday deadline for the new 15% rate approaches, certain sectors remain shielded. Exemptions have been carved out for critical minerals, pharmaceuticals, and goods compliant with the USMCA from Canada and Mexico. However, for the rest of the world, including the UK, the sudden hike represents a breach of previous stability. The global markets now wait to see if this 150-day “temporary” measure will face its own set of debilitating legal challenges.