Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
President Donald Trump will raise his new global tariff rate to 15 per cent from 10 per cent, a day after the US Supreme Court struck down the backbone of his economic strategy.
Following the devastating blow from the country’s top court on Friday, Trump signed a proclamation slapping a temporary 10 per cent duty on imports under section 122 of the Trade Act of 1974, which allows the president to set import restrictions for up to 150 days.
It was one of the options Trump cited after the Supreme Court ruled in a 6-3 vote that he had exceeded his authority in using the International Emergency Economic Powers Act to impose tariffs on dozens of countries.
On Saturday, however, Trump said in a social media post that he was “effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level”.
He added: “During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs.”
The court’s ruling has left the administration rushing to implement backup plans to maintain some levies. It has also left $142bn in tariff revenue in limbo, according to the Budget Lab at Yale, with US businesses already demanding refunds.
Trump has ordered further investigations into unfair trade practices under section 301 of the 1974 Trade Act.
He also said he would impose more tariffs under section 232 of the Trade Expansion Act of 1962, which would allow him to target sectors threatened on national security grounds.
Trump has lambasted the Supreme Court justices since the ruling came down. On Saturday, he called the decision “ridiculous, poorly written, and extraordinarily anti-American” in his social media post.
On Friday, he said the justices should be “ashamed” of themselves, adding that Amy Coney Barrett and Neil Gorsuch, conservative justices he appointed to the bench and who voted against him, were “an embarrassment to their families”.
The court’s decision marked the latest sign of expanding resistance to Trump and his assertion of extraordinary executive powers. The ruling was particularly stinging given the court’s conservative majority and the fact that it has allowed Trump to act with broad latitude on other issues.
Simon Evenett, professor of geopolitics and strategy at IMD Business School in Lausanne, Switzerland, said the decision by the White House was probably designed to reduce the incentive for countries to increase exports to the US under the 10 per cent tariff announced on Friday.
“For many countries that were hit by very high IEEPA tariffs of 20 or more per cent, the 10 per cent tariff would have been a sizeable cut for a temporary period, which could have driven a surge of exports to the US to take advantage of the lower rate,” he said.
However, the move to 15 per cent was a blow to the UK, which had secured a blanket tariff of 10 per cent as part of its ‘reciprocal tariff’ deal with Washington.
William Bain, head of trade policy at the British Chambers of Commerce, said a wide range of UK goods exported to the US would face an extra 5 percentage point increase in tariff rates.
“The 40,000 UK companies exporting goods to the US will be dismayed at this latest turn of events. We had feared that the president’s ‘Plan B’ response could be worse for British businesses and so it is proving,” he added.
Friday’s proclamation was set to take effect at 12.01am Eastern Time on Tuesday. The White House did not immediately respond to a question about whether the 15 per cent levy would go into effect that day.
The proclamation said the 10 per cent tariff was to “to address fundamental international payments problems” and rebalance trade relationships.
It has some exemptions, including critical minerals, some metals, pharmaceuticals, beef, tomatoes, oranges, certain aerospace products and some vehicles.
The White House said on Friday that it would continue to “honour” its “legally binding” trade deals that it has struck with other countries. US trade representative Jamieson Greer told Fox News that Washington expected its trading partners to do the same.
Credit: Source link
