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In a dramatic turn of events following a Supreme Court ruling that struck down his previous tariff policy, former President Donald Trump has announced a hike in tariffs on all imports to the United States from 10% to 15%. This decision, made public on Saturday, comes less than 24 hours after the court deemed his earlier tariff measures unlawful, further complicating the already fraught landscape of international trade relations.
Tariff Increase Sparks Controversy
The former president’s announcement was delivered via a post on Truth Social, in which he expressed frustration over the high court’s ruling. Trump labelled the justices’ decision as a “disgrace to the nation,” asserting that the tariffs were a necessary measure to combat longstanding trade imbalances. “I will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades,” he wrote.
The legal backing for this new increase stems from Section 122 of the Trade Act of 1974, a clause that has never before been utilized. This provision permits the imposition of a temporary 15% tariff for a period of 150 days, after which the administration must seek Congressional approval to extend or modify the tariffs. However, this increase is likely to face significant legal challenges, particularly following the Supreme Court’s recent ruling questioning Trump’s authority to impose tariffs without legislative consent.
Global Reactions and Economic Implications
In response to Trump’s announcement, German Chancellor Friedrich Merz indicated plans to present a unified European stance during a visit to Washington, expressing concern over the uncertainty that tariffs bring to international trade. “The biggest poison for the economies of Europe and the US is this constant uncertainty about tariffs. And this uncertainty must end,” he stated.
French President Emmanuel Macron echoed similar sentiments, reinforcing the importance of the rule of law in democratic governance. He emphasised the necessity for reciprocity in trade relations, warning against unilateral decision-making that could further strain international partnerships.
The new tariff rate has raised questions for countries like the UK, which had previously negotiated terms based on the original 10% tariff. William Bain, from the British Chamber of Commerce, lamented the potential negative impact on trade, stating, “This will be bad for trade, bad for US consumers and businesses, and weaken global economic growth.”
Exemptions and Ongoing Trade Challenges
Despite the sweeping nature of the new tariffs, Trump has indicated that certain products will be exempt, including critical minerals, pharmaceuticals, and USMCA-compliant goods from Canada and Mexico. Nevertheless, the Supreme Court’s ruling does not affect other industry-specific tariffs that Trump had previously imposed under different legislative frameworks, such as those on steel and aluminium.
Trump’s aggressive tariff policies have aimed to revitalise American manufacturing, with the US Treasury reportedly collecting over $130 billion from tariffs under the International Emergency Economic Powers Act (IEEPA). However, studies reveal that a staggering 90% of this burden has fallen on US businesses and consumers, leading many industry representatives to call for refunds from the federal government.
As tensions rise, Trump has continued his attacks on the Supreme Court, characterising their ruling as “ridiculous” and “anti-American.” He expressed disappointment with certain justices, including two of his appointees, and praised the dissenting justices for their courage.
Why it Matters
Trump’s latest tariff hike is more than just a trade policy shift; it represents a broader struggle over executive power and the authority of the judiciary. As businesses brace for the impacts of increased tariffs, the uncertainty surrounding international trade relations is likely to stifle economic growth on both sides of the Atlantic. The ramifications of these decisions will not only affect markets but could also shape the political landscape as stakeholders from various sectors demand clarity and stability in trade policy. As the situation unfolds, it becomes increasingly clear that the intersection of law, trade, and politics remains a pivotal battleground in contemporary governance.
