Washington D.C. – President Donald Trump signed an executive order Friday imposing a 10% global tariff on imports, a move triggered by the Supreme Court’s decision to strike down his previous attempt to implement sweeping tariffs using emergency powers. The new tariffs, set to take effect on Tuesday, will apply to goods from all countries, including those with existing trade agreements with the United States.
The Supreme Court, in a 6-3 ruling, determined that Trump had exceeded his authority when invoking the International Emergency Economic Powers Act (IEEPA) of 1977 to justify the tariffs. The court found that the law, intended for national emergencies, did not grant the president the power to impose broad tariffs without congressional approval. Chief Justice John Roberts, writing for the majority, stated that the president had asserted “extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope,” but had pointed to no statute that supported such authority.
The decision represents a significant setback for the Trump administration’s trade policies. The president, visibly angered by the ruling, publicly criticized the justices, calling them “fools and lap dogs” and accusing them of being influenced by foreign interests. He then announced the new 10% tariff as a workaround, utilizing the Trade Act of 1974 as the legal basis.
The new tariffs will apply to a wide range of goods, including those from countries like the European Union, Japan, South Korea, and Taiwan, which had previously agreed to a 15% surcharge. The United States recently lowered the floor for additional tariffs on products from Switzerland to 15% on December 18th, a change retroactive to November 14th, 2025, but these adjustments will now be subject to the new 10% global rate.
However, the tariffs will not be universally applied. Certain sectors, notably the pharmaceutical industry, are exempt. Goods imported from Canada and Mexico under the United States-Mexico-Canada Agreement (USMCA) will also be excluded. The White House stated the tariffs will be in effect for 150 days.
The Supreme Court’s ruling throws into question the validity of trade deals struck by the administration in recent months and raises uncertainty for U.S. Companies and consumers. Justice Brett Kavanaugh, in a dissenting opinion, warned that the decision could lead to a “mess” as the government potentially faces billions of dollars in refunds to businesses that paid the previously invalidated tariffs. He suggested the ruling wouldn’t significantly restrict future presidential tariff authority but would create substantial administrative challenges.
The financial implications of the court’s decision are substantial. Analysts estimate that the tariffs struck down by the court generated over $130 billion in revenue for the U.S. Government in 2025. This revenue had been used to offset the budgetary impact of the president’s income tax cuts, creating a potential trillion-dollar hole in the federal budget. The loss of this revenue stream will likely necessitate alternative funding sources or spending cuts.
The legal basis for the original tariffs, IEEPA, was intended to address specific national security threats. Trump was the first president to argue that the act allowed for the unilateral imposition of tariffs without congressional approval. The court’s decision reaffirms the principle of checks and balances, limiting the president’s ability to bypass Congress on matters of trade policy.
The impact on global markets remains to be seen. The initial reaction is likely to be increased volatility as investors assess the implications of the new tariffs and the potential for further trade disputes. The 10% tariff could increase costs for businesses and consumers, potentially leading to higher prices and reduced economic growth. The extent of these effects will depend on how other countries respond and whether the U.S. Engages in further trade negotiations.
The ruling also opens the door for companies to seek refunds for tariffs already paid. The process for obtaining these refunds, however, is expected to be complex and potentially lengthy, as warned by Justice Kavanaugh. The administrative burden of processing these claims could be significant, adding to the overall economic disruption caused by the shifting trade landscape.
The White House has indicated that the president intends to continue pursuing his trade policies through other means, despite the setback at the Supreme Court. The implementation of the new 10% tariff signals a continued commitment to protectionist measures, even as the legal framework for such actions becomes more constrained. The coming months will be crucial in determining the long-term impact of these developments on the U.S. Economy and global trade relations.
