New 15% Global Tariff Imposed by Trump Sparks Controversy and Uncertainty

In a bold response to a Supreme Court ruling that significantly affected his previous tax plans, President Donald Trump announced a new global tariff of 15% that took effect this Tuesday. The decision comes as a temporary measure for the Republican administration, which has been grappling with the implications of litigation since a Supreme Court decision invalidated much of Trump's tariff policy. The announcement was made last Friday during a press conference at the White House, where Trump openly criticized what he referred to as the 'ridiculous decision' of the Supreme Court. The ruling, which was decided by a 6-3 vote, halted the reciprocal tariffs and various other trade measures enforced under the International Economic Emergency Powers Act (IEEPA) of 1977. This act has served as the cornerstone of the Republican tariff strategy. Initially, Trump had suggested a 10% tariff rate but quickly adjusted the figure to 15% just a day later, indicating his commitment to finding powerful alternatives in light of the Supreme Court setback. However, this ruling has provoked uncertainty among U.S. trading partners, particularly those who had secured preferential trade rates during the ongoing trade war. Countries like Brazil, which are among those most impacted by the tariffs, expressed cautious optimism about the new global rate, seeing it as a leveling of the playing field against other nations. So, what products are exempt from this new tariff? Under Section 122 of the Trade Act of 1974, the imposed tariff will remain active for approximately 150 days until July 23, after which only Congress can decide on an extension. According to the White House, various agricultural products, including beef and tomatoes, critical medications, minerals, metals for coin production, as well as certain energy and aerospace items, are exempt from this new surcharge. Importantly, sectors that have already been taxed under separate frameworks will not be affected by this new 15% tariff. Notable among these are the existing 50% tariffs on steel and aluminum, as well as products covered under the United States-Mexico-Canada Agreement (USMCA). Furthermore, the ruling also impacts existing tariffs aimed at addressing the trade deficit with certain countries, rendering invalid additional tariffs on nations like Brazil and India due to political retaliation. In a separate development, the suspension of the de minimis exemption, which previously allowed for low-value goods to enter the U.S. tariff-free, continues despite the ruling. E-commerce platforms, particularly Chinese entities such as Temu and Shein, will still be charged tariffs on their products, even those sent through the international postal system, which are now also subject to the temporary import tax. Looking ahead, the next significant battle is expected to occur in Congress. As per Section 122 of the Trade Act of 1974, any continuation of these tariffs will require Congressional approval, where the Republican majority remains deeply divided. Senate Democratic leader Chuck Schumer stated his party's position on the matter, announcing their intent to block any extensions of these damaging tariffs once they expire this summer. 'Donald Trump's 15% global tariffs will continue to drive up prices and make life unsustainable for millions of Americans,' Schumer declared. As the situation continues to unfold, both domestic and international stakeholders are bracing for the potential economic repercussions of these tariffs, with the specter of prolonged trade tensions looming. Related Sources: • Source 1 • Source 2