A new 10% flat global tariff will take effect early Tuesday, marking a significant departure in U.S. trade policy after a recent legal defeat for President Donald Trump’s administration. The policy shift follows the Supreme Court’s decision to strike down the prior tariff system, prompting immediate market scrutiny as investors assess the implications for international trade flows and compliance procedures.
After the Supreme Court found that the administration’s earlier measures, enacted under the 1977 International Emergency Economic Powers Act, exceeded presidential authority, officials quickly adopted a new framework. The White House is now utilizing Section 122 of the Trade Act of 1974, allowing tariffs of up to 15% to target substantial balance-of-payments deficits, though the statute restricts these duties to a 150-day period unless Congress acts to extend them.
President Trump, via social media statements, indicated a potential move to a 15% rate, but at present, U.S. Customs and Border Protection has clarified that the initial global import duty will be set at 10%. Preparations are underway for a possible order to impose higher tariffs, and businesses are monitoring the situation for further developments.
The revised tariff schedule includes exemptions for certain critical imports, such as pharmaceuticals, key minerals, aerospace equipment, beef, and tomatoes. The new duty will not be cumulative in cases where national security tariffs already apply to products like steel and automobiles, although other goods could face higher aggregate tariffs compared to the previous system overturned by the court.
Reactions from major trading partners have been immediate. The European Union has suspended progress on a substantial trade agreement as a direct response to the new measures, while the United Kingdom has indicated that it may enact retaliatory steps, stating that “nothing is off the table.” President Trump, addressing these criticisms, has warned partners against taking advantage of the legal developments, indicating the U.S. could implement even steeper tariffs on nations with significant trade surpluses.
