US President Donald Trump’s new global tariffs came into effect on Monday at a rate of 10%, following a landmark Supreme Court decision that blocked several of his previous sweeping import taxes. The tariffs, enacted through an executive order signed hours after the ruling, began implementation from 24 February, introducing a lower rate than initially signalled by the president and marking the latest chapter in ongoing trade policy disputes that have drawn international attention and market concern.
The Supreme Court ruling, delivered last Friday in a 6–3 decision, found that Trump had exceeded his constitutional authority when he imposed broad, unilateral import tariffs last year under the International Emergency Economic Powers Act (IEEPA) of 1977. The judgment specifically curbed the president’s power to independently implement sweeping global tariffs, citing overreach in bypassing Congress and exceeding the limits of executive authority.
Trump had previously indicated on Saturday that he intended to impose a 15% tariff, but the new executive order implemented a 10% rate instead. No formal directive has yet been issued to increase the levy to 15%, and White House officials have not responded to requests for clarification. The reduced rate represents a partial adjustment to the Supreme Court’s intervention, while still maintaining Trump’s policy objective of using tariffs to address trade imbalances.
The legal authority for the new levy comes under Section 122 of the 1974 Trade Act, which allows the president to impose temporary tariffs for up to 150 days without congressional approval. This mechanism differs from the previously used IEEPA framework, which the Supreme Court deemed inappropriate for sweeping, long-term tariff impositions. Under Section 122, the administration argues, the levy is narrowly targeted to address specific trade deficits while remaining within constitutional boundaries.
Economic analysts have expressed concern over the sudden shifts in tariff policy and their potential ripple effects on global trade. Carsten Brzeski, an analyst with investment bank ING, described the situation as “adding to the chaos and mess,” highlighting the impact on businesses navigating uncertainty in international trade. Speaking to the BBC’s Today programme, he added: “In terms of uncertainty we’re back to where we were last year. The risk of a real fully-fledged tariff war trade war escalation is clearly higher than last year.”
Trump and his administration have consistently justified the imposition of tariffs as a strategy to reduce the United States’ trade deficit, which reached a new high last week, expanding by 2.1% compared with 2024 to approximately $1.2 trillion (£890bn). According to the most recent official data, the US has already collected at least $130 billion in tariffs using the IEEPA framework since last year, though critics argue the collection has come at significant cost to domestic businesses and international trade relations.
The president’s executive order stated that the temporary import duty is intended to “address fundamental international payments problems and continue the Administration’s work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers.” The administration emphasized that the tariff is a tool to improve US competitiveness and to rectify perceived long-standing inequities in trade with multiple countries.
Trump himself sharply criticised the Supreme Court’s decision last week, calling the ruling “ridiculous, poorly written, and extraordinarily anti-American.” He argued that the judgment hampers his ability to protect domestic industries and to respond swiftly to unfair trade practices by foreign governments. The president’s comments underscore the political dimension of the tariffs, reflecting ongoing tensions between the executive branch and the judiciary regarding trade powers.
In response to the ruling and the new 10% tariffs, Trump warned that countries that “play games” with existing trade agreements could face higher levies. The administration signalled that it would actively monitor compliance with trade deals and take punitive action against nations that fail to meet obligations or exploit US concessions. This warning comes amid mounting concerns that global partners may retaliate, heightening the risk of a trade war.
The United Kingdom responded cautiously, indicating that reciprocal measures “are off the table” if the US honors its existing tariff commitments but leaving open the possibility of action if agreements are not respected. UK officials emphasized that “no one wants a trade war,” seeking to balance enforcement with the need for continued economic cooperation. The statement reflects the UK’s strategic interest in preserving transatlantic trade while preparing contingencies.
The European Union has indicated it will suspend ratification of a deal reached over the summer, pending further clarity from the US on tariff implementation and compliance. Brando Benifei, chair of the European Parliament’s delegation for relations with the United States, said: “If we get worse conditions then we need to react. I think you should demand respect. My plea is that all the countries in the world that do not like that we are being treated this way… try to work a bit together.” His remarks underscore the EU’s insistence on fairness and predictability in trade negotiations.
India has also delayed previously scheduled talks to finalise a trade agreement with the US, citing the need to assess the impact of Trump’s latest executive order and the Supreme Court ruling. Officials from New Delhi indicated that no final decisions would be made until there is clarity regarding the scope and duration of the new tariff regime. The deferral highlights the potential global disruption caused by rapid shifts in US trade policy.
Market analysts warn that the volatility introduced by the new tariffs may have broad consequences for international supply chains. Businesses that had planned for the previously announced 15% tariffs now face recalibration, while multinational corporations must consider potential retaliatory measures, shifting consumer costs, and long-term uncertainties regarding US trade enforcement mechanisms.
Experts suggest that while the 10% levy is lower than Trump’s initially threatened 15%, it still maintains pressure on foreign exporters and signals the administration’s continued intent to prioritize domestic manufacturing and agricultural interests. The uncertainty surrounding potential escalation or extension of the tariffs has fueled speculation that trading partners may respond with their own levies, potentially triggering reciprocal measures.
Trump’s announcement and executive order arrive amid broader efforts to reshape US trade policy, including negotiations with China, Mexico, Canada, and the European Union. The administration frames these moves as a necessary correction to decades of perceived trade imbalance, yet the rapid sequence of policy changes has created tension both within markets and among US allies.
Legal scholars note that the Supreme Court’s ruling limits executive power while allowing temporary tariffs under the 1974 Trade Act, representing a compromise between constitutional authority and executive prerogative. The decision may serve as a precedent for future disputes involving presidential trade powers and the balance of authority between Congress and the White House.
Analysts warn that prolonged uncertainty could increase risk for investors, particularly those with exposure to international trade and import-dependent sectors. Carsten Brzeski emphasized that companies face “higher risk that the US’s trading partners would retaliate,” noting that even the temporary 10% rate may influence investment decisions, supply chain planning, and consumer prices across multiple markets.
The US trade deficit, now at approximately $1.2 trillion, remains a central element of the administration’s argument for tariffs. Trump maintains that targeted tariffs are necessary to protect American workers and industries, yet critics argue that the measures risk disrupting global commerce and inviting retaliatory action that could undermine economic growth domestically and abroad.
Trump’s administration continues to defend the tariffs as both legally justified under Section 122 and economically necessary to address persistent trade imbalances. Officials insist the temporary levy is narrowly focused, while acknowledging the need for ongoing consultation with Congress and international partners to mitigate unintended consequences.
Global reactions reflect a careful balance between diplomacy and economic self-interest. While countries such as the UK, EU members, and India express caution, many governments are preparing contingency plans to respond if trade relations are further strained. The unfolding situation underscores the delicate intersection of US domestic policy, constitutional law, and international trade diplomacy in an increasingly interconnected global economy.