Link Securities | US President Donald Trump announced on Friday the signing of an executive order that would impose a 10% global tariff on all countries under Section 122 of the Trade Act of 1974. The next day, he changed his mind and said he would raise it to 15%. The decision came after it was revealed that the Supreme Court had ruled that his use of the International Emergency Economic Powers Act (IEEPA) to impose levies was illegal.
The new tariff ‘will take effect almost immediately,’ Trump wrote in a post on Truth Social on Friday. Section 122 tariffs can only remain in effect for 150 days. The president said the same day that he will launch more investigations into unfair trade practices, which could pave the way for more tariffs.
It should be noted that US companies have paid tens of billions of dollars in tariffs under the IEEPA, and many are awaiting refunds from the government following the Supreme Court ruling. The US has also signed preliminary trade agreements with major trading partners, which could be suspended due to uncertainty.
Subsequently, according to Reuters, the US Customs and Border Protection (CBP) announced that it would suspend the application of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) at 00:01 EST (05:01 GMT) on Tuesday, more than three days after the US Supreme Court declared the tariffs illegal. The agency informed carriers in a message that it will deactivate all tariff codes associated with President Donald Trump’s previous orders related to the IEEPA as of Tuesday.
In this regard, and also according to Reuters, the European Commission (EC) yesterday demanded that the US abide by the terms of the EU-US trade agreement reached last year, after the US Supreme Court overturned Donald Trump’s global tariffs and he responded with new widespread levies. The EC, which negotiates trade policy on behalf of the 27 EU member states, said the US must provide ‘full clarity’ on the measures it intends to take following the court ruling. In this regard, the EC noted that the current situation is not conducive to fair, balanced and mutually beneficial transatlantic trade and investment, as agreed by both parties in the joint statement setting out the terms of last year’s trade agreement. According to the EC, ‘an agreement is an agreement’.
