New announcement after Supreme Court overturns previous decision to increase customs duty
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US President Donald Trump has announced a new 10 percent tariff on goods imported from around the world. Trump's new announcement came after the US Supreme Court ruled that Trump's decision to use the International Emergency Economic Powers Act (IEEPA) of 1977 was unconstitutional.
The court ruled that Congress, not the president, has the authority to impose new tariffs under the IEEPA. As a result, the Trump administration previously struck down large tariffs imposed on various countries. The court had six judges against Trump's decision and three in favor. Trump condemned the Supreme Court's decision, accusing the judges of being influenced by foreign interests.
Oxford Economics estimates that Friday's decision is a major setback for Trump's economic agenda. Because the Trump administration had set an ambitious goal of raising about $3.6 trillion in revenue from 2026 to 2035 by increasing tariffs.
After being unable to use the IEEPA, Trump imposed the new tariffs using Section 122 of the Trade Act of 1974. This gives the president the authority to impose temporary import tariffs of up to 150 percent for 150 days. This section has never been used before. The new tariffs on imported goods will begin at 12:01 p.m. local time on February 24.
Trump announced in February 2025 that he would impose tariffs under the IEEPA on goods from China, Mexico, and Canada. He claimed that the smuggling of fentanyl from those countries had created a state of emergency in the United States. But Friday's Supreme Court ruling overturned that decision.
Trump announced a 10 percent minimum global tariff on US imports by executive order on April 2, 2025. At that time, both the IEEPA and Section 232 of the Trade Expansion Act of 1962 were used.
The order imposed high tariffs ranging from 11 to 50 percent on nearly 60 countries. Canada was subject to a 35 percent tariff, China was subject to a 34 percent tariff, India was subject to a 25 percent tariff, and Mexico was subject to a 25 percent tariff. Switzerland was subject to a 39 percent tariff, Laos and Myanmar were subject to a 40 percent tariff, and Syria was subject to a 41 percent tariff.
Who will pay the new tariffs?
The new tax will be global. However, some goods imported from countries that have free trade and special agreements with the United States may be exempted. Depending on the needs of the US economy, some goods may be exempted from tax. Important minerals, metals, energy products, natural resources, food crops, medicines, electronics, cars, trucks, aerospace products are included in this. Similarly, books and information materials, gifts, and charitable works will not be taxed.
Some goods mentioned in the trade agreement between the United States, Mexico, and Canada will also be exempt from tax. Similarly, under the Dominican Republic-Central America-America Free Trade Agreement, customs duties will not be levied on clothing and apparel coming from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
What options does Trump have?
After not being able to use the IEEPA, the Trump administration has stated that it will use other legal options. The White House said it is using Section 122 to address international payments problems and rebalance US trade.
In addition, the Trump administration is studying the possibility of imposing tariffs under Section 301 of the Trade Act of 1974. The law allows the US Trade Representative to investigate and take necessary action against other countries' trade practices.
Similarly, Trump can impose tariffs under Section 232 of the Trade Expansion Act of 1962. He used it extensively during his first term. It gives the government the authority to impose taxes on imported goods that threaten national security. Last April, he also imposed tariffs under this section on the steel, aluminum, lumber and automobile industries.
Trump has argued that imposing tariffs will strengthen the treasury. Various agencies estimate that the US government will collect $130 billion in taxes on foreign products by 2025.
The Supreme Court's ruling that Trump's IEEPA tariffs were illegal also complicates the question of what will happen to companies that have paid taxes in the past. The Supreme Court has not ruled on the matter.
Trump told reporters that the case for refunds could last for years. Treasury Secretary Scott Besant also said the Supreme Court had not ruled on the matter. He said the case could drag on for years.
Alex Jacques, chief policy and advocacy officer at the liberal think tank Groundwork Collective, told CBS that more than 1,000 businesses had already requested a refund of the tariffs before the ruling. He said that number could rise.
Trump has said that the higher tariffs on foreign goods will raise revenue, boost domestic production and create jobs.
He says the move is necessary to close the trade deficit between the United States and other countries. But consumers have complained that the decision has hurt them by making foreign goods more expensive.
