In a surprising twist, President Donald Trump announced his decision to increase tariffs on U.S. imports from a temporary 10 percent to 15 percent, marking the highest rate permissible under current law. This announcement follows a significant ruling by the U.S. Supreme Court, which invalidated his previous tariff initiative.

Just a day earlier, Trump had declared a 10 percent tariff across the board, reacting swiftly to the court’s decision. The Supreme Court deemed that the president had overstepped his authority by imposing higher rates under an economic emergency statute.

Trump’s latest strategy hinges on a less familiar legal framework, Section 122, which permits tariffs as high as 15 percent. However, this law requires congressional consent to maintain the tariffs beyond 150 days, introducing a potential for new legal hurdles.

Notably, no prior administration has utilized Section 122, and its application could spark further judicial scrutiny. Trade analysts and congressional insiders express doubt that the Republican-controlled Congress will prolong these tariffs. This skepticism is fueled by polls indicating an increasing number of Americans attribute rising prices to these trade duties.

No president has previously invoked Section 122, and its use could lead to further legal challenges.

Trade experts and congressional aides are sceptical the Republican-majority Congress would extend the tariffs, given polls that show growing numbers of Americans blame the duties for higher prices.

In a social media post on Saturday, Trump said he would use the 150-day period to work on issuing other “legally permissible” tariffs.

The administration intends to rely on two other statutes that permit import taxes on specific products or countries based on investigations into national security or unfair trade practices.

“I, as president of the United States of America, will be, effective immediately, raising the 10% worldwide tariff on countries, many of which have been ‘ripping’ the US off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level,” he wrote in a Truth Social post.

The Section 122 tariffs include exemptions for certain products, including critical minerals, metals and energy products, according to the White House.

Wendy Cutler, a former senior US trade official and senior vice president at the Asia Society think tank, said she was surprised Trump had not opted for the maximum Section 122 rate on Saturday, adding that his rapid-fire change underscored the uncertainty trading partners faced.

Trump used tariff law improperly, Supreme Court says

The Supreme Court’s decision, authored by chief justice John Roberts, concluded the law Trump had used for most of his tariffs, the International Emergency Economic Powers Act, did not grant the president the powers he claimed.

Roberts was joined in the majority by fellow conservatives Neil Gorsuch and Amy Coney Barrett, both Trump appointees, and the court’s three liberal justices.

Trump reacted with fury to the ruling, calling the justices in the majority “fools” and describing Gorsuch and Barrett in particular as “embarrassments”, while vowing to continue his global trade war.

Some foreign leaders applauded the decision. French President Emmanuel Macron said on Saturday the ruling showed it is good for democracies to have counterweights to power and the rule of law.

German Chancellor Friedrich Merz said he expected the decision would ease the burden on German companies. He said he would use his upcoming US trip to reiterate that “tariffs harm everyone”.

Trump has used the tariffs, or the threat of imposing them, to extract trade deals from foreign countries.

After the court’s decision, Trump’s trade representative, Jamieson Greer, told Fox News on Saturday that those countries must honour agreements even if they call for higher rates than the Section 122 tariffs.

Exports to the US from countries such as Malaysia and Cambodia would continue to be taxed at their negotiated rates of 19 per cent, even though the universal rate is lower, Greer said. Indonesia’s chief negotiator for U.S. tariffs, Airlangga Hartarto, said the trade deal between the countries that set US tariffs at 19 per cent, remains in force despite the court decision.

The ruling could spell good news for countries like Brazil, which has not negotiated a deal with Washington to lower its 40 per cent tariff rate but could now see its tariff rate drop to 15 per cent, at least temporarily.

With November’s midterm elections looming, Trump’s approval rating on his handling of the economy has steadily declined during his year in office, with 34 per cent of respondents saying they approve and 57 per cent saying they disapprove in a Reuters/Ipsos poll that closed on Monday.

Affordability remains a top concern for voters. Democrats, who need to flip only three Republican-held seats in the US House of Representatives in November to win a majority, have blamed Trump’s tariffs for exacerbating the rising cost of living.

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