On Saturday, President Donald Trump announced he would raise the worldwide tariffs, which he had imposed the previous day, from 10% to 15% in response to an unfavorable Supreme Court ruling.
The court on Friday determined that Trump had overstepped his authority by placing tariffs on trading partners utilizing the International Emergency Economic Powers Act (IEEPA), a 1977 law intended for domestic national emergencies.
Trump stated in a Truth Social post that “effective immediately,” he would be “raising the 10% global tariff for countries … to the fully authorized and legally verified level of 15%.” He further mentioned the administration would determine and implement new duties “in the coming short months.”
Following the 6-3 decision, Trump strongly criticized the Supreme Court, labeling the ruling “deeply disappointing” and expressing shame for the justices who voted against his tariffs, including those he himself had appointed.
On Friday, Trump had declared his intention to establish a 10% global tariff, leveraging presidential authority under Section 122 of trade legislation. These duties were slated to take effect at 12:01 AM Eastern Time on Tuesday.
The White House did not provide comment to CNN regarding whether the 15% tariff would go into effect on Tuesday.
According to Erica York, Senior Vice President for Federal Tax Policy at the Tax Foundation, these 15% duties will result in an effective tariff rate of 6% for the year. The Tax Foundation calculates this as an estimate of duties as a percentage of projected annual imports.
Presidents are authorized to impose duties up to 15% under Section 122, but such obligations are temporary and require Congressional approval within 150 days.
Trump Retains Ability to Impose New Duties
Trump enacted extensive tariffs last year, including so-called “reciprocal” duties that elevated import charges on key trading partners like India and Brazil to 50%, alongside duties on China which had previously reached 145%.
Trump retains the option to introduce further duties by employing other trade statutes. His administration has already utilized Section 232 investigations to implement broad tariffs on steel, aluminum, copper, lumber, furniture, automobiles, and auto components.
The administration could also resort to Section 301 to investigate nations potentially breaching trade agreements or engaging in practices deemed “unwarranted” and that “burden or restrict” US businesses.
Another avenue involves imposing duties up to 50% should the US deem that trading partners employ discriminatory trade practices that might violate World Trade Organization agreement terms.
Trump is anticipated to address global trade on Tuesday during his State of the Union address.
Winners and Losers in Trump’s Tariff Battle
For numerous nations, a 15% duty represents an improvement over the rates established by the IEEPA tariffs.
Countries such as Brazil, which faced duties as high as 50%, alongside Canada, China, India, Indonesia, Mexico, and South Africa, encountered lower rates, noted Joe Brusuelas, Chief Economist at RSM US.
Conversely, nations like Argentina, Australia, Saudi Arabia, and the United Kingdom will face elevated tariffs, he added.
Brazil, India, and several Asian countries that secured trade deals with Trump are considered “temporary winners,” according to Kyle Handley, an economics professor at the University of California, San Diego. The administration might still impose new, industry-specific tariffs using alternative powers, he suggested.
In the immediate term, retailers like Walmart, Target, Costco, and Amazon stand to benefit from the reduced tariff levels, Brusuelas observed. Household appliances were also heavily impacted by Trump’s tariffs, negatively affecting companies such as Home Depot, Lowe’s, and IKEA.
While steel and aluminum tariffs remain unchanged, auto parts saw a “reciprocal” adjustment, he added. This constitutes positive news for automakers like GM, Ford, and Toyota.
Consumers, who paid higher prices for numerous goods, may not see the advantage of lower duties, and there is a lack of certainty regarding refunds for individual importers.
“I have a feeling the American public is not going to see it,” Treasury Secretary Scott Bessent commented on refunds Friday at an event hosted by the Dallas Economics Club.
Handley speculated that in-store prices might decrease as existing imported stock sells off, “but the relief won’t be there.” Furthermore, uncertainty will persist for many businesses and trading partners.
“It’s unclear if the president has the same flexibility to negotiate very specific deals country by country, industry by industry. That era is over,” Handley concluded.
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