Donald Trump’s new 10% global tariff comes into effect | Trump tariffs
Donald Trump’s new global tariffs came into force at 10%, even though he had threatened a higher rate of 15% over the weekend, bringing “some relief” to British businesses, according to a lobby group.
After the US president suffered a Supreme Court defeat on Friday that overturned his sweeping “Liberation Day” tariffs imposed last year, he reacted angrily by announcing a 10% global tariff, which he raised to 15% on Saturday in a post on his social media platform Truth Social.
According to a notice from the U.S. Customs Agency, “an additional 10 percent ad valorem duty on items imported from each country” was imposed for a period of 150 days beginning Tuesday, unless specifically exempted.
The Trump administration is implementing the new requirements under Section 122 of the Trade Act of 1974, without Congressional approval. The 10% rate will apply in addition to the most favored nation duty of the United States. The 15% increase announced by Trump on Saturday has not yet been implemented, but it could be introduced at any time.
“While a new tariff rate of 10%, rather than the threatened 15%, will provide some relief, it shows how difficult it is for businesses to plan ahead,” said William Bain, head of trade policy at the British Chamber of Commerce.
“It is far from clear what will happen next, and whether a higher tariff rate is still on the cards. Despite the immediate reprieve, there is further uncertainty for UK businesses exporting goods to the US.”
“This makes it very difficult for companies to understand the prices and margins they will be able to obtain for their products, currently in production, destined for export in a few months. Inevitably, this will impact their sales and hit the economy.”
Last week, America’s highest court declared many of Trump’s tariffs illegal. It ruled that a 1977 law designed to respond to national emergencies did not provide legal justification for most of the tariffs imposed by the Trump administration on countries around the world.
Atakan Bakiskan, U.S. economist at Berenberg Bank, said: “The new Section 122 tariffs could also face legal challenges, as the current U.S. trade deficit may not meet the condition of ‘large and serious balance of payments’ deficits that give the president the authority to impose tariffs to address ‘fundamental problems in international payments.’
However, he added: “It would be surprising if the Trump administration, after the 150 days that the 15% tariffs remain in effect (assuming Congress does not vote to extend them), reverses its protectionist trade policy agenda. During this 150-day period, it will likely explore new avenues to move closer to its preferred tariff regime. We have several options.”
