How Trump’s New 10% Global Tariffs Will Work and What Comes Next
The recent U.S. Supreme Court ruling regarding tariffs marks a significant turning point for President Donald Trump’s trade policy. The court determined that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) with his global tariffs. As a result, Trump has initiated new 10% tariffs on almost all imports. Here’s what you need to know about how these tariffs will function and what implications they may have moving forward.
Supreme Court Ruling: What Tariffs Were Found Unlawful and Why?
– Decision Overview: On February 20, the Supreme Court ruled in a 6-3 decision that Trump couldn’t use IEEPA to impose tariffs.
– Emergency Claims: Trump had previously invoked this act in February 2025, asserting that fentanyl trafficking constituted an emergency. Later, he expanded the tariffs, stating that the U.S. trade deficit posed an “extraordinary and unusual threat.”
– Congress’s Authority: The court emphasized that only Congress has the power to create taxes. Therefore, the regulation under IEEPA failed to meet the requirements for raising revenue.
– Remaining Tariffs: Although his IEEPA tariffs are void, many others remain intact, especially those related to national security under Section 232 of the Trade Expansion Act of 1962.
The New 10% Global Tariff: Here’s What to Expect
– Legislation Background: Following the Supreme Court’s decision, Trump enacted a proclamation based on Section 122 of the Trade Act of 1974, allowing a temporary tariff of 10% on imports from all countries.
– Temporary Nature: This tariff will last for 150 days, after which Congress must intervene. It may be possible for Trump to allow the tariffs to lapse, then declare a new emergency to reimpose them.
– Trade Practices Investigations: Trump is also looking into tariffs under Section 301 of the Trade Act, which empowers the U.S. Trade Representative to investigate unfair trading practices.
Concerns Over Refunds: Will Consumers and Businesses Get Their Money Back?
– Financial Fallout: The Supreme Court ruling creates uncertainty around the $130 billion collected through the now-unlawful tariffs.
– Litigation Ahead: Treasury Secretary Scott Bessent noted that discussions regarding refunds could linger for years, as the court didn’t provide guidelines for returning collected taxes.
– Large vs. Small Businesses: Larger corporations may more easily navigate the refund process compared to smaller firms, which might lack the necessary resources.
Current Tariffs: What’s in Effect Now?
– Implementation Date: The new 10% tariffs will take effect on February 24 at 12:01 EST.
– Global Impact: Countries with existing trade deals, including the UK and EU, will also be subjected to these tariffs, undermining previous agreements.
– Exemptions: Some goods will be exempt due to their importance to the U.S. economy. Key exempt categories include:
– Critical minerals and metals
– Pharmaceuticals and food crops
– Electronics, cars, and aerospace products
– Informational materials like books and donations
– USMCA Protections: Goods covered under the US-Mexico-Canada Agreement will remain exempt from these tariffs.
Conclusion: What’s Next for Trump’s Tariffs?
Trump’s new 10% global tariffs signify another bold move in his trade policy, albeit a temporary one. As the administration navigates the complexities of both ongoing and newly imposed tariffs, the legal battles regarding refunds and exemptions will undoubtedly shape the landscape of U.S. trade in the coming months. Only time will reveal the full ramifications of these tariffs on consumers, businesses, and international relations.