WASHINGTON – President Donald Trump on Friday evening announced a new 10% global tariff on imports, a move that came just hours after the Supreme Court curtailed his ability to impose tariffs through a different legal mechanism. The new duty, authorized under Section 122 of the Trade Act of 1974, is set to take effect February 24 and will remain in place for 150 days, unless Congress intervenes.
The announcement, delivered via a post on Truth Social, signals a renewed commitment to protectionist trade policies despite a recent legal setback. Trump characterized the Supreme Court’s ruling as “ridiculous” and vowed to maintain strong tariff revenues, stating, “But now the adjustment process begins, and we will do everything possible to take in even more money than we were taking in before!” This latest action underscores the ongoing tension between presidential authority and congressional oversight in the realm of international trade.
The Supreme Court’s 6-3 decision earlier Friday invalidated tariffs imposed by Trump using the International Emergency Economic Powers Act (IEEPA). The court found that IEEPA did not grant the president the authority to impose tariffs, a ruling that impacted duties targeting countries including Canada, Mexico, and China, initially justified in part by concerns over fentanyl trafficking. More than 1,500 companies had challenged those tariffs, and the ruling raises questions about potential refunds, estimated to be in the billions of dollars. However, Treasury Secretary Scott Bessent indicated that overall tariff revenues in 2026 are expected to remain “virtually unchanged” as the administration pivots to alternative legal authorities, CNBC reported.
Shifting Legal Grounding for Tariffs
The administration is justifying the new 10% tariff based on what it describes as “fundamental international payments problems.” A White House fact sheet cited a goods trade deficit of around $1.2 trillion in both 2024 and 2025, a current account deficit of 4% of GDP in 2024 – the highest since 2008 – a negative balance on primary income, and a net international investment position of minus 90% of GDP at the end of 2024. These factors, the administration argues, pose a threat to financial stability, investor confidence, and national security.
Section 122 of the Trade Act of 1974 allows the President to impose temporary import surcharges of up to 15% for 150 days without prior congressional approval. Extending the tariff beyond that period would require congressional consent, presenting a potential obstacle given existing opposition from both Democrats and some Republicans to elements of Trump’s trade policy.
What’s Covered and What’s Exempt
The 10% ad valorem duty will apply to most imports and will be levied in addition to existing customs duties. However, several categories of goods are exempt, including critical minerals, energy products, pharmaceuticals, certain electronics, aerospace goods, and selected agricultural items.
Imports benefiting from duty-free treatment under the US–Mexico–Canada Agreement (USMCA) will also be exempt, as will textile and apparel items covered by the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR). Goods already subject to Section 232 tariffs – those imposed earlier under national security grounds – will not be subject to the additional 10% surcharge. Trump has also directed the Office of the United States Trade Representative (USTR) to initiate new investigations under Section 301, potentially paving the way for country-specific tariffs in the future, NBC News detailed.
Impact on Global Trade
The administration maintains that the new tariff is intended to address broader economic imbalances rather than to protect specific industries. This approach signals a reshaping of the administration’s trade strategy following the Supreme Court’s decision. The move is likely to draw criticism from trading partners and could lead to retaliatory measures, potentially escalating trade tensions. The long-term effects on the U.S. Economy and global supply chains remain to be seen.
The Cato Institute noted that although the Supreme Court ruling was a win for limiting presidential power, the new tariff demonstrates that the administration is still seeking ways to implement protectionist measures. The Institute suggests that the situation requires continued scrutiny to ensure that trade policy remains grounded in sound economic principles.
The 10% tariff is scheduled to remain in effect until July 24, 2026, unless terminated earlier or extended by Congress. The coming months will be crucial as lawmakers assess the impact of the tariff and decide whether to allow it to continue. Further developments are expected as the USTR conducts its Section 301 investigations, potentially leading to additional trade actions.
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