In a decisive move following a Supreme Court ruling that challenged his authority, Donald Trump has announced a hike in tariffs on imports to the United States from 10% to 15%. This new rate will apply to all countries and is expected to take effect immediately, although the specifics of its implementation remain uncertain. The announcement comes as Trump faces backlash over the legality of his prior tariff policies and aims to assert control over trade practices amid ongoing legal and political challenges.
Tariff Increase Details
On Saturday, Trump revealed his decision to increase the temporary tariff rate during a post on Truth Social. He expressed frustration at the Supreme Court’s ruling from the previous day, which deemed his use of tariffs under the International Emergency Economic Powers Act (IEEPA) as overreaching and lacking Congressional approval. This ruling was characterised by Trump as a “disgrace to the nation.”
In his social media post, he 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.”
The revised tariff rate is based on 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. After this period, the administration must seek approval from Congress for any extensions or new tariffs. Trump’s administration has indicated that during these 150 days, it will formulate new tariffs that align with legal guidelines.
International Reactions
The announcement has sparked immediate responses from international leaders. German Chancellor Friedrich Merz is set to visit Washington to present a unified European stance in light of the Supreme Court’s ruling. He highlighted the detrimental effects of tariffs, 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 also weighed in, underscoring the importance of judicial oversight in a democratic society, suggesting that the rule of law serves as a necessary counterbalance to executive power. He expressed concerns about the implications of Trump’s new tariffs, advocating for a principle of reciprocity rather than unilateral measures.
The UK’s business community is similarly apprehensive. William Bain, from the British Chamber of Commerce, remarked that the tariff increase would adversely affect trade, consumers, and businesses, ultimately hindering global economic growth. He stressed the need for clarity and stability in trade relations, warning that escalating tariffs are counterproductive.
Exemptions and Continued Tariffs
Certain products will be exempt from the newly imposed tariffs, including critical minerals, metals, pharmaceuticals, and goods compliant with the United States-Mexico-Canada Agreement (USMCA). Meanwhile, the Supreme Court’s ruling does not alter industry-specific tariffs that remain in effect under different legislative frameworks, such as those on steel and aluminium.
Despite collecting over $130 billion in tariffs through the IEEPA, data indicates that a staggering 90% of this amount has been borne by American businesses and consumers. As the administration moves forward, many business associations are calling for refunds, although Trump has suggested that any reimbursements will entail a lengthy legal process.
Trump’s Critique of the Supreme Court
In the wake of the Supreme Court’s decision, Trump has been vociferous in his criticism of the justices, branding their ruling as “ridiculous, poorly written, and extraordinarily anti-American.” His contempt extended towards several justices, including two he appointed, Amy Coney Barrett and Neil Gorsuch, whom he labelled as “fools” and “lapdogs” for the so-called establishment.
During a press conference, Trump expressed his “shame” for certain court members, praising dissenting justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito. His remarks exemplify a broader pattern of combative rhetoric towards judicial authority as he navigates the complexities of trade policy amid legal scrutiny.
Why it Matters
The implications of Trump’s latest tariff increase are profound, affecting not only US domestic markets but also international trade dynamics. As businesses and consumers grapple with rising costs and uncertainty, the potential for retaliatory measures from affected nations looms large. The ongoing tug-of-war between executive action and judicial oversight raises critical questions about the future of trade policy in the United States, highlighting the delicate balance of power that governs economic relations both domestically and globally.