In a dramatic escalation of trade tensions, former President Donald Trump announced on Saturday that he will increase tariffs on imports from all nations from 10% to 15%. This decision comes less than 24 hours after the US Supreme Court ruled against the legality of his previous tariff measures, which were enacted under the International Emergency Economic Powers Act (IEEPA). The ruling, which found that Trump overstepped his authority by failing to secure congressional approval, has prompted a fierce reaction from the former president, who labelled the justices as a “disgrace to the nation” and vowed to implement the new tariffs under a different legislative framework.
Tariff Increase Under Controversial Legal Authority
In a post on Truth Social, Trump stated: “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.” This increase will be enforced under Section 122 of the Trade Act of 1974, a rarely invoked provision that permits the president to impose a temporary tariff of up to 15% for a duration of 150 days. However, this measure is subject to congressional approval after the initial period, raising the potential for further legal challenges.
Despite Trump’s assertion that the new tariffs are effective immediately, the White House has yet to confirm the official implementation date. A previous fact sheet indicated that the original 10% tariffs were scheduled to commence at 12.01 am ET on Tuesday, 24 February.
International Repercussions and Responses
World leaders have expressed concern regarding the ramifications of Trump’s tariff hike. German Chancellor Friedrich Merz announced plans to visit Washington to present a unified European stance on the issue, warning of the “poison” of ongoing uncertainty in trade relations. He emphasised that tariffs ultimately harm economies on both sides of the Atlantic, stating: “The biggest poison for the economies of Europe and the US is this constant uncertainty about tariffs. And this uncertainty must end.”
French President Emmanuel Macron echoed these sentiments, asserting the importance of judicial checks on executive power. He remarked, “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 signalled that France would be closely monitoring the effects of Trump’s new tariffs, advocating for reciprocity in trade relations rather than unilateral decisions.
For the UK, the 15% tariff presents new challenges, particularly as it had previously agreed to a 10% rate with the US. William Bain, the head of trade policy at the British Chamber of Commerce, condemned the hike, stating, “This will be bad for trade, bad for US consumers and businesses, and weaken global economic growth. Businesses on both sides of the Atlantic need a period of clarity and certainty. Higher tariffs are not the way to achieve that.”
Exemptions and Ongoing Tariff Structures
Certain products will be exempt from the temporary tariff increase, including essential minerals, metals, and pharmaceuticals, with specific provisions for USMCA-compliant goods from Canada and Mexico. Notably, the Supreme Court ruling does not affect industry-specific tariffs imposed on steel, aluminium, lumber, and automobiles, which remain in force.
Trump’s aggressive tariff policies have been a cornerstone of his administration’s economic strategy, aimed at revitalising US manufacturing. According to recent government data, the US has accrued approximately $130 billion in tariffs through the IEEPA. However, studies reveal that a staggering 90% of this financial burden has fallen on American businesses and consumers. As a result, numerous industry associations are now clamouring for refunds, although Trump has signalled that any reimbursements would likely lead to protracted legal disputes.
The Political Landscape and Trump’s Critique of the Judiciary
Following the Supreme Court’s ruling, Trump did not hold back in his criticisms of the justices, branding their decision as “ridiculous, poorly written, and extraordinarily anti-American.” His remarks included pointed criticisms of some justices, including two of his own appointees. He expressed disappointment in Amy Coney Barrett and Neil Gorsuch, stating, “They’re just being fools and lapdogs for the Rinos [‘Republicans in name only’] and the radical-left Democrats.”
Trump’s vitriolic rhetoric reflects a broader political strategy aimed at galvanising his base by portraying himself as a champion of a strong executive against judicial overreach. He lauded the dissenting justices, positioning their views as more aligned with his administration’s pro-business agenda.
Why it Matters
The decision to raise tariffs amidst a backdrop of judicial pushback signals a potentially volatile period in US trade policy, with far-reaching implications for both domestic and international economic landscapes. As uncertainty looms over global trade dynamics and bilateral relations, businesses will be compelled to navigate a complex and often unpredictable regulatory environment. This escalation not only risks further alienation of key trading partners but may also hinder economic recovery efforts in a post-pandemic world, raising critical questions about the sustainability of Trump’s tariff-centric approach in a global economy increasingly reliant on cooperation and stability.