Donald Trump further hikes global tariffs, to come into effect from Feb 24; what will be the impact?
US President Donald Trump has announced an increase in global tariffs from 10% to 15%. He announced this in a post on Truth Social on Saturday. Previously, Trump had announced a 10% tariff on all countries at a press conference on Friday night.
On Friday, the US Supreme Court struck down Trump's tariffs on countries worldwide. The Supreme Court, in a 6-3 majority ruling, ruled that Trump lacked the authority to invoke the IEEPA Act. This authority belongs only to Congress, not the President.
Annoyed by this, Trump imposed a 10% tariff on countries worldwide using a new law (Section 122). This law allows for a maximum tariff of 15%. The 15% tariff will come into effect on February 24th.
Section 122 empowers US President to immediately impose tariffs on imports
Section 122 is part of a US law called the Trade Act of 1974. This law empowers the US President to immediately impose tariffs on imports if the country is suddenly threatened with a trade deficit or economic crisis.
Under this law, the President can impose temporary tariffs without a lengthy investigation process. Typically, these tariffs can remain in place for 150 days, during which time the government reviews the situation and makes further decisions.
According to some media reports, imposing a uniform global tariff of 15% on all trading partners would mean that countries with higher tariffs would automatically reduce their tariffs.
Some products exempted
Some products have been exempted, such as certain agricultural products (beef, tomatoes, oranges), critical minerals, pharmaceuticals, some electronics, and passenger vehicles. The Trump administration stated that these tariffs would replace the old ones and continue their efforts to earn more money.
Earlier, Trump also criticized the judges who declared the tariffs illegal. Trump said, "I am ashamed of some of the judges in this court. They are a disgrace to our country; they lack the courage to do what is right for our country." Regarding the trade deal with India, Trump said, "There will be no change in this deal. PM Modi is a good friend of mine."
What will be the impact?
Experts believe that a 15% global tariff will:
Increase uncertainty in international trade.
Many countries may react.
Prices of imported goods may rise.
Markets may experience volatility.
This decision could have a major impact on the global economy in the coming days.