Trump's New 10% Global Tariff Takes Effect, Offering Temporary Relief to Businesses
Donald Trump's new global tariff has officially come into force at a rate of 10%, a development that has provided what trade experts describe as "some relief" for British businesses. This implementation comes despite the US president's earlier threats to impose a higher 15% tariff over the weekend, creating a complex landscape for international trade.
From Supreme Court Defeat to Tariff Implementation
The tariff announcement follows a significant legal setback for the Trump administration. Last Friday, the US Supreme Court struck down the president's sweeping "liberation day" tariffs that had been imposed the previous year. In response to this defeat, Trump announced a new 10% global tariff, which he subsequently increased to 15% in a Saturday post on his social media platform, Truth Social.
According to official documentation from US customs authorities, "an additional 10% ad valorem duty on imported articles of every country" has been imposed effective immediately. This tariff will remain in place for a period of 150 days from Tuesday unless specific exemptions are granted.
Business Uncertainty and Planning Challenges
William Bain, head of trade policy at the British Chambers of Commerce, commented on the situation, stating, "While a new 10% tariff rate, instead of the threatened 15%, will provide some relief, it shows how difficult it is for businesses to plan ahead." He emphasized the ongoing uncertainty facing UK firms exporting goods to the United States, noting that the potential for higher tariff rates still looms on the horizon.
"This makes it very difficult for firms to understand the prices and margins they will be able to secure for their goods currently under production for export in several months' time," Bain explained. "Inevitably, this will have an impact on their sales and hit the economy."
Legal Basis and Potential Challenges
The Trump administration is implementing these new duties under section 122 of the Trade Act of 1974, a move that does not require congressional approval. The 10% rate will be applied in addition to the United States' most favored nation duties. While the threatened 15% uplift announced on Saturday has not yet been implemented, experts warn it could be introduced at any moment.
Atakan Bakiskan, a US economist at Berenberg Bank, highlighted potential legal challenges to the new tariffs. "The new section 122 tariffs may also face court challenges, as the current US trade deficit may not meet the condition of 'large and serious balance-of-payments' deficits that grant the president authority to impose tariffs to address 'fundamental international payments problems,'" he noted.
Long-Term Trade Policy Outlook
Despite these legal considerations, Bakiskan suggested that the Trump administration is unlikely to retreat from its protectionist trade agenda. "It would be surprising if the Trump administration, after the 150 days during which the 15% tariffs remain in effect, were to back down from its protectionist trade policy agenda," he stated. "During this 150-day period, it will likely explore new pathways to move closer to its preferred tariff regime. There are several options available."
The Supreme Court's ruling last week declared many of Trump's previous tariffs illegal, determining that a 1977 law designed to address national emergencies did not provide sufficient legal justification for the administration's broad tariff measures against multiple countries. This legal context adds another layer of complexity to the current tariff situation and suggests ongoing legal battles may shape future trade policy developments.
