US President Trump stated on social media on the 21st that the ‘global import tariff’ he announced the previous day on goods entering the United States would increase from 10% to 15%, effective “immediately.” Trump indicated that, based on a review of the US Supreme Court’s ruling outcome, the tariff rate “on numerous countries globally” would be raised immediately from 10% to 15%. In the coming months, the US administration will determine and enact new “legal tariffs.”
On the 20th, the US Supreme Court issued a ruling, determining that the US International Emergency Economic Powers Actdid not authorize the President to impose broad-based tariffs. This signifies a major setback for the Trump administration’s tariff policy. Later that day, Trump signed an executive order confirming the termination of the tariff measures previously implemented under the authority of the International Emergency Economic Powers Act.
Also on the 20th, following the Supreme Court ruling, Trump announced, citing Section 122 of the Trade Act of 1974, the imposition of a ‘global import tariff’ at a rate of 10% for 150 days, intended to replace the tariffs deemed unlawful by the Supreme Court. US media reports note that this provision has never been used before; it allows the administration to impose tariffs of up to 15% for a maximum of 150 days in cases of trade imbalances with other countries, unless extended by Congress.
Trump further stated that all US tariffs imposed on ‘national security’ grounds, as well as those levied under Section 232 of the Trade Expansion Act of 1962and Section 301 of the Trade Act of 1974, would remain in effect.
US Trade Representative Jamieson Greer, in an interview with Fox News Channel on the 20th, stated that existing trade agreements the US has reached with other countries must be honored, even if the tariff rates stipulated in those agreements are higher. He cited the example that tariff rates on goods from Malaysia and Cambodia entering the US would remain at 19%.
International Response and Potential Impact
- Responses from Trade Partners
- European Union: France indicated it is consulting with member states and the European Commission, potentially utilizing anti-coercion instruments (such as export controls, service tariffs) or reactivating a retaliatory package valued at over €90 billion.
- Germany: Chancellor Merz plans to travel to the US for negotiations, emphasizing the damaging effects of tariffs on all parties, and to coordinate a unified EU stance.
- South Korea: Convened meetings to discuss response measures, closely monitoring US actions to ensure outcomes of the Korea-US agreement are not affected.
- Economic Costs and Legal Risks
- Corporate Burden: Hundreds of companies have filed lawsuits seeking refunds for payments made under previous Trump tariff policies, with estimated total claims potentially exceeding $175 billion.
- Impact on Consumers: Tariff costs are primarily borne by US businesses and consumers. It is difficult for ordinary consumers to prove their specific burden share, limiting their eligibility for refunds.
- Legal Battles: Trump acknowledged that litigation over whether the federal government must refund tariff payments could last for five years.
- Global Trade Order
- Challenge to Rules: The Trump administration’s frequent circumvention of multilateral trade rules and adoption of unilateral measures have exacerbated global trade tensions.
- Increased Uncertainty: The capricious nature of policies makes it difficult for businesses to plan supply chains and could trigger a contraction or restructuring of global trade.