President Donald Trump has announced a hike in global tariffs to 15%, invoking Section 122 of the Trade Act of 1974. This decision arrives in the wake of the Supreme Court's 6-3 ruling against his "Liberation Day" tariffs, which were set without explicit congressional consent. The court's decision, delivered on February 20, 2025, declared that the President had overstepped his authority, prompting him to employ an alternative legal avenue to adjust tariff rates.
In a swift response to the ruling, President Trump implemented an immediate 10% tariff on all imports, supplementing existing levies, and then confirmed his intention to reach the 15% ceiling permitted by law. While addressing the media, President Trump criticized the Supreme Court's decision as "Anti-American" and expressed his disappointment in the justices, including those he appointed during his first term.
The statute in question, Section 122, is a provision for addressing trade imbalances during short-term economic emergencies and has never before been used to establish tariffs of this magnitude. Legal experts suggest that this unprecedented application of the law may lead to new judicial challenges. The Supreme Court's ruling emphasized that Congress holds the reins over tariff policy, hinting that any long-term solution would require legislative action.
The current Republican majority in both chambers could facilitate a legislative pathway, but permanent changes would necessitate bipartisan cooperation, particularly in the Senate. Markets have demonstrated a measured response to the announcement, with investors and economists debating the potential repercussions of increased import costs. The Trump administration defends the tariffs, asserting that they will generate government revenue and bolster domestic industry.
In the coming months, President Trump's team is tasked with formulating and implementing the new tariffs, which may be a harbinger for additional trade measures. The recent clash with the Supreme Court marks a significant confrontation between the executive branch and a judicial body partially shaped by the President's own appointments. Despite the conservative majority, two Trump appointees sided with Chief Justice John Roberts in the decision against the earlier tariff framework.
For President Trump, the 15% global tariff is a strategic maneuver to maintain a key aspect of his economic strategy amidst escalating legal and political disputes over executive power.
