The drama continues as US President Donald Trump escalated his trade offensive by increasing global tariffs to 15 percent, hours after the Supreme Court struck them down as illegal.
Following what he called
a “terrible decision” by the US Supreme Court, President Trump signed a proclamation, first on Friday (February 20) for a 10 percent levy only to jack it up to the statutory maximum of 15 percent on Saturday (February 21) via social media.
Trump remained defiant in the face of the SC ruling, claiming that his administration has “great alternatives” that could bring in “more money” and make the United States “a lot stronger”. He lashed out at the judiciary, saying he was “ashamed” of the conservative judges who ruled against him and labelling the liberal wing a “disgrace”.
Now, his latest move creates a complex shift in the global trade landscape. Many major economies, including India, China, South Korea, and Brazil, are likely to witness their tariffs temporarily lowered to 15 percent from previously higher “reciprocal” levels.
For instance, as per a report published by The Indian Express, India’s effective incidence of duties, which had reached as high as 50 percent for some goods, is now set to drop to this flat 15 percent rate starting February 24. Conversely, countries such as the United Kingdom, Australia, and Saudi Arabia will face higher tariff rates than before.
While some critical products like pharmaceuticals, electronics, and aerospace goods remain exempt, the US expects trading partners to continue abiding by previous concessions even as their negotiated agreements are superseded by this global levy.
Here is all you need to know:
How Will Trump’s Global Tariffs Work Now And What Comes Next?
The Trump administration has implemented the new 15 percent global tariff under Section 122 of the Trade Act of 1974, a provision intended to address “large and serious” balance of payments deficits.
Unlike Trump’s previous strategy, this authority is strictly temporary, lasting for only 150 days unless the US Congress votes to extend it. To ensure the tariffs remain durable beyond this five-month window, he has ordered the US Trade Representative (USTR) to initiate new investigations under Section 301 into “unfair” trade practices.
These investigations, which can take up to a year, are intended to pave the way for more legally “durable” and potentially higher country-specific duties. In the interim, the administration will continue to use Section 232 of the Trade Expansion Act of 1962 to maintain industry-specific taxes on steel and aluminium for national security reasons.
What Is The Impact Of The Newest Tariffs On India And Other Countries?
For India, the ruling and subsequent 15 percent pivot represent a significant strategic reset. Previously, Indian imports faced a 25 percent reciprocal levy, which rose to 50 percent for products linked to India’s purchase of Russian oil.
According to reports, under the new flat rate, however, roughly 55 percent of India’s exports to the US will be freed from these high reciprocal duties, reverting to standard rates plus the 15 percent surcharge.
China, Mexico, and Canada will also witness the removal of specific “trafficking tariffs” related to fentanyl, though Mexican and Canadian goods compliant with the United States-Mexico-Canada Agreement (USMCA) will be largely exempt. But experts have warned that this shift diminishes Trump’s negotiating leverage, as partners may now reconsider or abandon trade deals that were originally negotiated under the threat of the now-illegal IEEPA (International Emergency Economic Powers Act) levies.
What Is The Law Trump Used Now Versus The Original Law?
The US Supreme Court ruled 6-3 that Trump overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to impose taxes.
The court held that the US Constitution assigns the power to create taxes to Congress, not the president, and that the IEEPA was intended for regulating commerce during emergencies — such as placing sanctions — rather than raising revenue. To circumvent this, Trump turned to Section 122 of the Trade Act of 1974, a never-before-used statute designed for balance-of-payment emergencies.
While Section 122 allows for faster action than other trade laws, it is limited by a 15 percent cap and a 150-day duration, whereas the IEEPA had allowed him to unilaterally impose tariffs of up to 50 percent indefinitely.
What Is The Refunds Issue Outlined By The Supreme Court?
The invalidation of the IEEPA tariffs has caused a massive financial and legal headache regarding $130 billion to $175 billion in collected revenue.
While the SC struck down the tariffs, it offered no guidance on how to return the money, leaving the issue to be decided by lower courts. Treasury Secretary Scott Bessent said the revenues are now “in dispute” and the refund process could be “dragged out for weeks, months, years”.
Businesses must sue individually to recover their funds, a process that has already witnessed more than 1,000 corporate entities initiate legal action. Trump has predicted that these potential refunds will be locked up in litigation for the next five years.
What Are The Political Implications For Trump?
Politically, the ruling is being viewed as a major rebuke of Trump’s “go-it-alone” approach and a rare check on his executive power.
The timing is particularly sensitive as the midterm elections approach in November, with Republicans defending slim majorities in Congress. While Trump has claimed that the ruling makes him “stronger”, it actually curtails his fastest tool for imposing broad economic penalties.
Public opinion has also soured, with polls showing 62 percent Americans disapproving his tariff policy as costs rise for consumers. Some tariff-sceptical Republicans may now feel emboldened to break ranks, viewing the court’s decision as a “gift in disguise” that allows the party to distance itself from unpopular trade gambits that have contributed to stagnant GDP growth, as reported by CNN.
The crisis reached a head following a rapid sequence of events: on Friday morning, the SC issued its 6-3 ruling striking down the IEEPA-based tariffs as an unconstitutional exercise of Congressional power. By Friday afternoon, Trump reacted by signing an executive order for a 10 percent global tariff to replace them immediately. Finally, on Saturday, he said on social media, he has increased that rate to 15 percent.
(With agency inputs)
