Trump's 10% Global Tariffs Officially Take Effect, Markets Await Confirmation of 15%
US President Donald Trump's new 10% global import tariffs officially took effect on Tuesday. This policy represents a swift move by the White House to maintain its trade agenda, after the US Supreme Court struck down a previously implemented large tariff scheme.
Trump signed an executive order authorizing the 10% tariffs on Friday, just hours after the court's execution. Trump had previously threatened to increase the tariffs to 15%, but as of the 10% tariffs taking effect at 12:01 a.m. Washington time, there had been no official order to increase the rate.
However, an administration official stated that the White House was preparing a formal order to increase the global tariffs to 15%. However, no implementation schedule has been set, leading to confusion among countries and businesses trying to calculate the impact of the new policy on supply chains and prices.
The 10% tariffs were implemented through Section 122 of the Trade Act of 1974, which allows the president to impose tariffs for 150 days without Congressional approval. This path was chosen after a court ruled that Trump violated emergency rules when he used emergency powers to impose previous “reciprocal” tariffs.
This order also maintains a number of shippers, including goods that meet the terms of the new North American (U.S.-Canada-Mexico) trade agreement and certain agricultural products. According to a Bloomberg Economics analysis, the average effective U.S. tariff is expected to be around 10.2% after the appeal, down from around 13.6% before the appeal. If the global tariff is set at 15%, the effective tariff is expected to rise to nearly 12%.
This policy uncertainty has begun to impact the dynamics of negotiations. Several major trading partners, such as the European Union and India, have reportedly held off or postponed trade agreement discussions while awaiting confirmation of the U.S. tariff plan. Meanwhile, the White House has asserted that tariffs remain its primary tool, while considering other avenues such as Section 301 and Section 232, although the process is considered longer and less flexible than the previously used emergency permits.
Trump also reiterated his warning that countries deemed to be “playing around” with existing agreements could face higher tariffs. European officials, including ECB President Christine Lagarde, have emphasized the importance of transparency to prevent further disruption to global trade. In the near future, this tariff policy will also be a major highlight of Trump's State of the Union address to Congress, amid growing public concerns that tariffs could drive up prices and increase the cost of living. (asd)
Source: Newsmaker.id
