In a bold move that has further inflamed tensions in international trade, former President Donald Trump announced on Saturday an increase in tariffs on all imports to the United States from 10% to 15%. This decision comes just a day after the Supreme Court ruled against his previous tariff policies, asserting that he had overstepped his authority and failed to secure congressional approval for the tariffs he imposed under the International Emergency Economic Powers Act (IEEPA).
A Defiant Response to Judicial Rulings
Following the Supreme Court’s 6-3 decision on Friday, which deemed his tariffs illegal, Trump did not hold back in expressing his frustration. He described the ruling as a “disgrace to the nation” and promptly announced the new tariff rate via a post on Truth Social. “I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level,” he stated.
The legal basis for this increase stems from Section 122 of the Trade Act of 1974, which permits the President to impose tariffs of up to 15% for a duration of 150 days. However, this has raised questions about potential legal challenges, given that the law has never previously been invoked.
International Reactions and Concerns
The ramifications of Trump’s tariff hike are being felt well beyond American shores. German Chancellor Friedrich Merz has indicated plans to travel to Washington to present a unified European response to Trump’s actions, cautioning that the unpredictability surrounding tariffs is detrimental to both European and American economies. “The biggest poison for the economies of Europe and the US is this constant uncertainty about tariffs,” Merz remarked, stressing the need for clarity.
French President Emmanuel Macron echoed these sentiments, highlighting the importance of judicial oversight in democratic governance. He stated, “It is not bad to have a supreme court and, therefore, the rule of law. It is good to have power and counterweights to power in democracies.” Macron noted that France would carefully consider the implications of Trump’s new global tariff policy, advocating for reciprocity rather than unilateral decisions.
William Bain, head of trade policy at the British Chamber of Commerce, expressed concern about the impact of the increased tariffs on transatlantic trade. He warned that such moves would be detrimental to trade, negatively affect US consumers and businesses, and ultimately weaken global economic growth.
Exemptions and Ongoing Tariffs
While the new tariffs will apply broadly, certain categories of goods will be exempted, including critical minerals, metals, and pharmaceuticals, as well as products compliant with the United States-Mexico-Canada Agreement (USMCA). Notably, the Supreme Court’s decision does not affect separate industry-specific tariffs that Trump had previously imposed on steel, aluminium, lumber, and automobiles, which remain intact.
Despite the administration’s intent to rejuvenate American manufacturing through these tariffs, data indicates that the burden of these tariffs has largely fallen on US businesses and consumers, with approximately 90% of the revenue collected from tariffs coming from within the country. As Trump’s administration prepares to navigate the next steps, calls for refunds from US businesses have already begun, although the former president indicated that such reimbursements would likely involve protracted legal disputes.
A Lingering Judicial Frustration
Trump’s disdain for the Supreme Court’s ruling was palpable in his subsequent remarks. He described the decision as “ridiculous, poorly written, and extraordinarily anti-American,” and he did not shy away from personal attacks on the justices. During a press briefing on Friday, Trump expressed his disappointment, stating, “I’m ashamed of certain members of the court. Absolutely ashamed for not having the courage to do what’s right for our country.” He reserved particular criticism for Justices Amy Coney Barrett and Neil Gorsuch, whom he accused of being disloyal to their constitutional duties.
Why it Matters
This latest development highlights the precarious balance between executive power and judicial oversight in the realm of trade policy. Trump’s escalation of tariffs not only risks exacerbating trade tensions with key allies but also raises significant questions about the long-term implications for US economic policy and international relations. As businesses grapple with the uncertainty surrounding these tariffs, the potential for retaliatory measures from other nations looms large, threatening to disrupt global trade networks and economic stability. The unfolding situation will require astute navigation by lawmakers and business leaders alike as they confront the complexities of modern trade.
