Trump Defies Supreme Court, Raises Tariffs to 15% Globally

In an unprecedented constitutional standoff, Donald Trump has directly defied the US Supreme Court, imposing a 15% global tariff just one day after the nation's highest court declared his sweeping trade levies unconstitutional.

The clash between America's executive and judicial branches has injected fresh uncertainty into global trade, leaving businesses and trading partners scrambling to understand what comes next.

When the Highest Court Meets Immovable Will

Friday's 6-3 Supreme Court decision struck down Trump's use of the International Emergency Economic Powers Act (IEEPA) to justify broad tariffs. The court ruled that tariffs constitute taxation, and under Article I of the Constitution, only Congress holds the power to tax.

The legal reasoning was straightforward: the 1977 IEEPA was designed for specific national emergencies, not sweeping trade policy. But Trump's response was equally swift and scathing, calling the justices "fools and lapdogs" who are "very unpatriotic and disloyal to our Constitution."

Within hours, Trump had found a new legal pathway: Section 122 of the Trade Act of 1974. This obscure provision allows presidents to impose tariffs up to 15% to address "large and serious balance-of-payments deficits." Trump justified the move by citing America's $900 billion trade deficit.

No president has ever used this authority before, making Trump's action legally uncharted territory.

The Trade Deal Dilemma

The Supreme Court ruling has thrown existing trade agreements into chaos. Countries like the United Kingdom, India, and European Union members had negotiated specific deals to escape Trump's punitive tariffs—but now those carefully crafted agreements exist in legal limbo.

Britain secured 0% tariffs on steel and aluminum, plus 10% on other goods. India negotiated its rate down from 50% to 18%. But with the new universal 15% rate, the value proposition of these deals has fundamentally changed.

International trade lawyer Shantanu Singh notes that "the big incentive for doing trade deals with the Trump administration—getting a lower reciprocal tariff rate before competitors—has vanished." Countries that made concessions to secure better rates may now question whether to honor their commitments.

Winners and Losers in the New Landscape

China finds itself in an unexpectedly advantageous position. Having refused to sign a comprehensive trade deal, Beijing had agreed only to a temporary truce with 10% baseline tariffs. Now, without making any concessions, China faces the same 15% rate as countries that negotiated extensively.

"China will definitely feel it has the upper hand going into negotiations with the US," Singh observes. The irony is palpable: America's biggest trade rival may benefit most from the constitutional crisis.

Meanwhile, Southeast Asian nations like Malaysia and Cambodia, which negotiated rates of 19%, now face higher tariffs than the universal rate. Their trade representatives are scrambling to understand whether their agreements still apply.

The 150-Day Clock

Trump's new tariff authority comes with a built-in expiration date. Section 122 allows tariffs for only 150 days unless Congress extends them. This creates a ticking clock that could force either legislative action or yet another legal maneuver from the White House.

The temporary nature adds another layer of uncertainty for businesses trying to plan supply chains and pricing strategies. Will Congress, controlled by Trump's party, extend the tariffs? Will Trump find yet another legal justification? Or will the tariffs simply expire?

Global Ripple Effects

The constitutional confrontation extends far beyond trade policy. International observers are watching closely as America's separation of powers faces its most direct challenge in recent memory. When a president openly defies the Supreme Court and immediately implements workarounds, it raises fundamental questions about the durability of democratic institutions.

For trading partners, the message is clear: legal certainty in US trade policy may be a thing of the past. Countries must now factor in not just economic considerations, but the possibility that any agreement could be upended by constitutional power struggles.