US President Donald Trump on Friday signed an order imposing 10% global tariffs on all countries, which will take effect “almost immediately”. Trump made the announcement on his social media platform Truth Social, in which he said, “It is my great honor to have just signed from the Oval Office a global 10% tariff on all countries, which will go into effect almost immediately.”
This new tariff is part of his protectionist trade agenda, which aims to correct balance-of-payments problems and unfair trade practices. A White House official said the new tariffs would remain in place until another authorization is put in place, and he hoped U.S. trading partners would abide by the trade deal.
This new tariff has been announced after an important legal decision, in which the US Supreme Court ruled against the Trump administration. The court said by a majority of 6-3 that Trump misused the International Emergency Economic Powers Act (IEEPA) of 1977, which imposed import tariffs.
Describing the court’s decision as “very bad”, Trump said that he will now sign an executive order to impose a 10% global tariff under Section 122 of the Trade Act of 1974. Under this Act, one gets the right to impose temporary import surcharge (up to 15%) on imports for 150 days.
Supreme Court rejects Trump’s emergency power
Trump’s decision invalidates billions of dollars of “reciprocal” and emergency tariffs, which may require the government to return approximately $130-175 billion of the revenue collected. The US Supreme Court held that the President did not have the authority to impose import duties under the IEEPA and that this power is given only to Congress.
Trump said after the decision, “The tariffs that the court wrongly rejected will now be replaced with other options. We have options and we will take the money… We have brought in hundreds of billions of dollars and will continue to do so.” Trump also alleged that the court was “influenced by foreign interests” and that the decision was against American interests.
The financial impact of this decision will be huge. The tariffs in question could impact trade worth trillions of dollars. The US government had collected approximately $134 billion in levies under these disputed tariffs as of December 14, which could now lead to a new legal battle.
With Trump’s new order, US stock indexes rose slightly as investors expected a reduction in inflationary pressures. However, this rally slowed down due to Trump’s promise to impose new tariffs.
Following this decision, the administration also launched a new investigation into “unfair trade practices” under Section 301, which could lead to more targeted duties.
Trump has clarified that the tariffs previously imposed under Section 232 (National Security) and Section 301 (Unfair Trade) remain “in full force and effect,” and will not be affected by the IEEPA decision. This means Trump’s trade policies and new tariffs could have long-term impacts on global trade and US domestic finances.
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