President Donald Trump issued a new 10 percent tariff on imports to the United States following the Supreme Court’s rejection of many of his broad and arbitrary duties, dealing a blow to his key economic strategy. Trump announced the tariff from the Oval Office, stating it would take effect almost immediately. Over the past year, he has implemented various tariffs to incentivize and penalize countries, regardless of their relationship with the US.
The latest tariff is scheduled to start on February 24 and last for 150 days, with exceptions for certain sectors under separate investigations, such as pharmaceuticals, and goods entering the US under the US-Mexico-Canada agreement. Even US trading partners who had previously negotiated higher tariff rates with the Trump administration will now face the 10 percent duty.
Despite the setback, a White House official mentioned plans to explore implementing more suitable or pre-negotiated tariff rates in the future. The Supreme Court’s ruling, which Trump criticized, highlighted that the law he had been using to impose tariffs does not grant the President such authority.
Treasury Secretary Scott Bessent stated at the Economic Club of Dallas that an alternative method would maintain tariff revenue levels in 2026. The ruling did not affect specific sector tariffs on products like steel and aluminum, with potential for additional sectoral tariffs pending ongoing investigations.
This ruling represents a significant defeat for Trump at the Supreme Court, marking his largest legal setback since his return to office. The court clarified that the law Trump relied on does not explicitly authorize imposing tariffs. The decision was met with approval from business groups, providing them with much-needed certainty.
While the Trump administration suggested companies could receive refunds if tariffs were deemed unlawful, the ruling did not address this issue. The University of Pennsylvania’s Penn Wharton Budget Model estimated potential refunds of up to $175 billion due to the court’s decision on tariffs.
Various officials and organizations expressed mixed reactions to the ruling, with some calling for immediate refunds and others pointing out the lack of mechanisms for consumers and small businesses to reclaim paid tariffs. The decision is expected to impact consumers, with the effective tariff rate decreasing to 9.1 percent but remaining high compared to historical averages.
Close US allies like the European Union and Britain are reviewing the decision, while Canada, which has dealt with tariff threats from the US, sees the ruling as a validation that the levies were unwarranted. However, the country is bracing for potential trade disruptions and is preparing for further trade pressures from the US.