Donald Trump’s new 10 per cent global tariff officially came into force on Tuesday, marking a fresh chapter in the White House’s attempt to rebuild its trade strategy after the US Supreme Court struck down the administration’s earlier sweeping duties.
The move signals that tariffs remain central to Trump’s economic playbook, even as legal limits reshape how far he can go.
A Swift Policy Reset After The Supreme Court Ruling
The president signed an executive order last Friday authorising the 10 per cent import tax, just hours after the Supreme Court invalidated his earlier “reciprocal” tariffs. Those duties had been imposed under emergency powers legislation, but the court concluded that the administration had exceeded its authority.
In response, Trump turned to Section 122 of the 1974 Trade Act. This provision allows a president to impose a tariff of up to 15 per cent for 150 days without seeking congressional approval. While Trump publicly floated the possibility of raising the rate to 15 per cent, no official directive had been issued by the time the 10 per cent levy took effect.
According to an administration official, the White House is preparing a formal order to lift the global rate to 15 per cent, although the timing has not been finalised.
Confusion And Caution Across Global Capitals
The lack of clarity from Washington has left governments and corporations scrambling. Trading partners are revisiting agreements to assess their exposure under the new baseline tariff, while negotiations have slowed or stalled in key regions.
The European Union paused ratification of its agreement with the US, awaiting firmer details on tariff policy. In New Delhi, officials similarly postponed talks in Washington aimed at finalising an interim trade arrangement, reported Bloomberg. The atmosphere of uncertainty has complicated diplomatic efforts that had been months in the making.
US Trade Representative Jamieson Greer sought to reassure partners over the weekend, saying on CBS’s Face the Nation: “We want them to understand these deals are going to be good deals. We’re going to stand by them. We expect our partners to stand by them.”
Yet those assurances have done little to quiet unease. European Central Bank President Christine Lagarde described clarity from Washington as “critically important” for global trade stability.
How The Numbers Stack Up
Despite the headline rate of 10 per cent, several exemptions remain. Goods compliant with the North American trade pact between the US, Canada and Mexico continue to enjoy preferential treatment. Certain agricultural goods also retain exemptions carried over from the previously invalidated tariff regime.
A Bloomberg Economics analysis estimates that the average effective US tariff rate will settle at around 10.2 per cent once exemptions are factored in. That is lower than the 13.6 per cent effective rate before the court’s decision. If the White House proceeds with a 15 per cent global levy, the effective rate would rise to about 12 per cent.
Rebuilding The Tariff Wall
While Section 122 provides a short-term mechanism, the administration is also exploring other legal pathways to maintain tariff pressure. Authorities under Section 301 and Section 232 remain available, although they are less flexible than the emergency powers previously used.
The White House is preparing investigations into imports of industrial goods such as batteries, cast iron and iron fittings, electrical grid and telecom equipment, plastic piping and certain chemicals. These probes, based on national security concerns, could lead to additional tariffs, but they may take months to conclude.
Trump has reiterated that tariffs will remain central to his trade doctrine. On Monday, he warned that countries that “play games” with existing agreements could face even steeper duties.
What Comes Next?
The next 150 days will be crucial. Section 122’s temporary authority gives the White House room to manoeuvre, but it does not provide a permanent solution. The potential shift to a 15 per cent rate, combined with ongoing investigations into sector-specific imports, suggests that the global tariff landscape could remain fluid.
