Trump Tariffs Ruled Unlawful: New 15% Levy Sparks Trade Uncertainty

WASHINGTON – President Donald Trump signed an executive order Saturday raising tariffs on all U.S. Imports to 15 percent, just one day after the Supreme Court struck down his previous sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The move injects further uncertainty into global trade as nations grapple with the implications of the court’s ruling and the president’s swift response.

Friday’s 6-3 Supreme Court decision determined that Trump exceeded his authority when utilizing IEEPA to impose tariffs, a law intended for responding to specific national emergencies. The court asserted that tariffs constitute taxation, a power exclusively reserved for Congress under Article I of the Constitution.

The ruling does not affect tariffs on steel, aluminum, lumber, and automobiles, which were enacted under Section 232 of the Trade Expansion Act of 1962, a separate legal authority.

Trump reacted to the court’s decision with sharp criticism, labeling the justices in the majority “fools and lapdogs” and accusing them of being “very unpatriotic and disloyal to our Constitution.” He immediately invoked Section 122 of the Trade Act of 1974, initially setting a blanket 10 percent tariff on all imports, which was then raised to 15 percent on Saturday.

Section 122 of the Trade Act of 1974 allows the president to impose tariffs of up to 15 percent to address “large and serious balance-of-payments deficits.” These tariffs are authorized for a 150-day period unless Congress votes to extend them. Trump is the first president to utilize this provision to impose broad tariffs.

The White House stated that certain goods, including specific agricultural products like beef, tomatoes, natural resources, fertilizers, and aerospace products, will be exempt from the temporary levy.

The implications for existing trade deals are now under scrutiny. Several countries, including the United Kingdom, India, and the European Union, had previously negotiated agreements to lower tariffs on their exports to the U.S. The question now is whether those countries will be subject to the new 15 percent tariff or the rates agreed upon in their respective trade deals.

Speaking to reporters Friday, Trump indicated that some trade agreements would remain in effect. However, the incentive for negotiating trade deals with the U.S. Administration to secure lower tariff rates has diminished following the Supreme Court’s ruling.

The UK signed a trade deal with the U.S. Last May following the imposition of tariffs on steel and aluminum exports. The agreement established zero tariffs on those products and a 10 percent tariff on other goods. A British Chamber of Commerce representative stated the new 15 percent global tariff “will be bad for trade, bad for US consumers and businesses and weaken global economic growth.” The UK government is currently seeking clarification from the U.S. On how the court’s ruling will affect their agreement.

China, which had been engaged in a trade war with the U.S., agreed to a one-year truce with a 10 percent baseline tariff on some goods following a summit between Trump and President Xi Jinping in October. The Supreme Court ruling will lift tariffs imposed on chemicals used in fentanyl production, but tariffs on other Chinese exports, such as electric vehicles, aluminum, and steel, will remain in place. A Chinese Embassy spokesperson called for cooperation between Beijing and Washington to provide stability for the global economy.

Several Southeast Asian nations, including Indonesia, Malaysia, Vietnam, and Cambodia, entered into trade agreements with the U.S. Last year to reduce tariffs. The U.S. Trade Representative, Jamieson Greer, stated that imports from these countries would continue to be taxed at their negotiated rates, despite the new 15 percent global tariff.

India, which faced a 50 percent tariff, recently reached a framework trade deal with the U.S. Under the agreement, Prime Minister Narendra Modi reportedly agreed to halt purchases of Russian oil, and U.S. Tariffs on top Indian exports were to be lowered to 18 percent. A planned Indian trade delegation to finalize the agreement has been postponed.

The European Union and the U.S. Reached a deal last July to avert a transatlantic trade war, establishing a 15 percent tariff on EU exports to the U.S. However, the deal has not yet been ratified by EU lawmakers. An EU commission spokesperson stated the bloc is in “close contact” with the U.S. Administration seeking clarity.

Mexico, subject to tariffs on some pharmaceuticals and a “fentanyl tariff,” is largely exempt from tariffs due to the US-Mexico-Canada Agreement (USMCA). However, the USMCA is scheduled for review later this year, raising uncertainty about the future of those exemptions.

Canada, facing tariffs on steel, aluminum, softwood lumber, and automobiles, as well has significant portions of its exports protected under the USMCA. Canadian leaders have expressed concern about potential future actions by Trump as the agreement comes up for review.

The U.S. Trade Representative will likely use the 150-day period of the Section 122 tariffs to conduct investigations under Section 301 of the Trade Act of 1974, seeking to reinstate reciprocal tariff rates invalidated by the Supreme Court’s ruling, according to international trade lawyer Shantanu Singh.