As expected, US President Donald Trump responded by announcing a new “global tariff” under Section 122 of the Trade Act of 1974 to replace the prior reciprocal tariff regime. An executive order signed Feb 20 imposed a 10% surcharge on imports from all countries, with essentially the same exemptions as the prior reciprocal tariffs (energy, precious metals, a number of other products subject to current or prospective Section 232 sectoral tariffs and USMCA-compliant imports from Canada and Mexico). Soon after, Trump announced that he was raising the 10% surcharge to 15%, but as of this writing (Feb 25) the White House has not released additional detail or a new executive order.
On Feb 20, the US Supreme Court ruled against the tariffs the Trump Administration imposed under the International Emergency Economic Powers Act (IEEPA), in a 6-3 decision. This includes the “reciprocal” tariffs applied on trading partners at various rates as well as tariffs applied to Canada, China, Mexico and other countries under separate emergency declarations, but it does not affect tariffs imposed under other laws (e.g., the metals and auto tariffs imposed under Section 232, or the 2018–2019 China-focused tariffs under Section 301).
The Court’s decision is silent on the question of refunds, which is likely to lead importers to seek repayment in a separate process in lower courts. To date, we estimate IEEPA tariffs have collected around US$180 billion ($227.8 billion) and we expect most of this to be refunded in increments over the next year or so.
