After the Court: Trump Imposes 10% Global Tariff Under New Authority
- 2 minutes ago
- 4 min read
This morning, the U.S. Supreme Court reshaped the legal battlefield of American trade policy.
In a 6–3 decision, the Court ruled that President Donald J. Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose sweeping, country-based and “reciprocal” tariffs. The majority wrote:
“IEEPA does not authorize the President to impose tariffs.”
The Court also emphasized that in the half-century since IEEPA’s passage, no president has used it to levy tariffs of this magnitude, noting the “lack of historical precedent” and the breadth of authority claimed.
Important: The ruling blocks the broad emergency-based tariffs. It does not affect existing sector-specific tariffs imposed under other laws — including Section 232 (national security tariffs such as steel and aluminum) and Section 301 measures.
Within hours, the White House responded.
The Immediate Countermove: Section 122
President Trump announced he would pivot to a different statutory authority — Section 122 of the Trade Act of 1974 — and sign a proclamation imposing:
A 10% ad valorem global import duty
Effective February 24 at 12:01 a.m. EST
For 150 days
At a White House event, he stated:
“Effective immediately, all national security tariffs under Section 232 and existing Section 301 tariffs remain in place… Today, I will sign an order to impose a 10% global tariff under Section 122 over and above our normal tariffs already being charged.”
This matters.
Section 122 is specifically designed to address balance-of-payments problems and gives the president temporary authority — capped at 150 days — to impose import surcharges or restrictions.
Unlike IEEPA, it is explicitly trade-focused.
The White House Justification: A Payments Crisis
The administration frames today’s action not as retaliation — but as structural correction.
According to the White House fact sheet, the United States faces:
A $1.2 trillion goods trade deficit in 2024
A current account deficit of –4.0% of GDP
A deteriorating net international investment position of –$26 trillion (89% of GDP)
For the first time in 60+ years, Americans earned less on capital deployed abroad than foreigners earned inside the U.S.
The argument:
The U.S. imports too much of what it consumes, sending dollars abroad and weakening domestic production capacity.
The proposed solution:
A temporary global import duty to “stem the outflow of dollars,” incentivize reshoring, and rebalance trade.
What Is Covered — and What Is Not
The 10% temporary tariff applies broadly — but with significant exemptions.
Exempted categories include:
Critical minerals and certain metals
Energy and energy products
Natural resources and fertilizers not sufficiently produced domestically
Certain agricultural goods (including beef, tomatoes, oranges)
Pharmaceuticals and pharmaceutical ingredients
Certain electronics
Passenger vehicles, trucks, buses, and some parts
Aerospace products
Informational materials (e.g., books)
Donations and accompanied baggage
Also exempt:
Goods already subject to Section 232 actions
USMCA-compliant goods from Canada and Mexico
Certain textiles and apparel under CAFTA-DR
Additionally, the administration reaffirmed suspension of de minimis duty-free treatment for low-value shipments — meaning small parcels will also face the new duty.
What This Means Structurally
Today’s sequence reveals three key realities:
The Supreme Court Drew a Legal Line
IEEPA cannot be stretched into a general tariff authority. The emergency-powers pathway is now closed for broad tariff programs.
The Executive Branch Is Pivoting, Not Retreating
Trump’s response was immediate and strategic.
Section 122 provides a legally narrower — but still powerful — 150-day mechanism.
The administration also signaled that future tariff actions may shift toward:
Section 301 investigations (unfair trade practices)
Existing 232 national security authorities
Negotiated reciprocal trade agreements
The Direction of U.S. Trade Policy Has Not Changed
The White House made this explicit:
“While the domestic legal authorities to impose future tariffs will change, the overall direction of travel… will not.”
Reshoring domestic production, rebalancing trade, and using tariffs as leverage remain central pillars.
The Economic Question
The deeper issue is not legal — it is macroeconomic.
The United States has run persistent current account deficits for decades. Whether tariffs meaningfully correct structural imbalances depends on:
Domestic production capacity
Global supply chain elasticity
Currency dynamics
Capital flows
Consumer price response
Tariffs can change relative prices.
They do not automatically change industrial capacity.
That is where the real test will lie.
The Political Overlay
Trump called the Court’s ruling “deeply disappointing” and said he was “absolutely ashamed” of the justices who struck down his earlier tariff program.
But the broader signal today is not confrontation — it is adaptation.
The administration did not abandon tariff policy.
It recalibrated its legal footing.
Where This Goes Next
The 10% tariff lasts 150 days unless extended through other mechanisms.
Expect possible Section 301 investigations targeting specific countries or industries.
Trade partners will assess whether retaliation is warranted.
Markets will evaluate inflationary and supply-chain impact.
Congress could be pulled into the debate if broader authority is sought.
The ONEST Bottom Line
The Supreme Court narrowed emergency power.
The White House shifted statutory tools.
The legal authority changed.
The trade strategy did not.
This is not the end of tariff policy — it is its next phase.
And the question now is not whether tariffs will be used.
It is whether they can meaningfully rebalance a $1.2 trillion trade gap — without destabilizing the very economy they aim to protect.