Trump signs 10% global tariffs, quickly counterattacks Supreme Court ruling! Global trade in 2026 is destined to be turbulent.

President Trump signed an executive order on Friday local time, imposing a crucial 10% global tariff. The Trump administration took swift action to maintain the trade policy agenda that has dominated his second term, following the Supreme Court overturning many of his tariffs policies last year. This move also signifies further challenges to the stability and growth of the global trade system, with constant shifts in underlying currents. "I am very honored to have just signed the 10% global tariff on all countries in the Oval Office at the White House, almost immediately effective. Thank you for your attention to this matter!" Trump wrote in a social media post. According to the latest facts released by the White House, the tariff is set to take effect at 12:01 AM on February 24th, US time. Trump is implementing a new benchmark tariff under Section 122 of the Trade Act of 1974, which grants the President unilateral authority to impose tariffs. However, this untested legal provision sets a strict 150-day limit on the implementation of tariffs. If an extension of the tariff period is needed, Congress must approve it, which is a complex issue for President Trump as both Democrats and some Republicans have opposed some of his tariff policies. Trump's global tariffs overturned by the US Supreme Court In a 6-3 ruling earlier on Friday, the US Supreme Court declared that Trump's imposition of so-called "reciprocal" tariffs using the International Emergency Economic Powers Act (IEEPA) from decades ago was an illegal move. Last April, Trump imposed global tariffs ranging from 10% to 50% on major trading partners using the International Emergency Economic Powers Act. The recent ruling from the US Supreme Court rendered these tariffs invalid, including the tariffs imposed on goods from Canada, Mexico, and China to combat fentanyl smuggling. The ruling also cast doubt on the separate IEEPA tariffs on goods from Brazil and India. In addition to the 10% uniform tariff rate, Trump stated that he will continue to retain existing import tariffs under the frameworks of Section 301 and Section 232, and suggested that more trade investigations will be initiated. According to the latest facts released by the White House, Trump has instructed the Office of the United States Trade Representative to initiate an investigation under his authority under Section 301. "The 10% benchmark tariff under Section 122 may be significantly lower than many current higher reciprocal tariff rates," said senior economist Dan Pan of Standard Chartered Bank in New York. Section 301 tariffs require specific investigations on countries, including hearings and soliciting opinions from affected companies or countries. Government officials must conclude that a country has violated trade agreements or engaged in practices that burden US trade before imposing tariffs. The Trump administration previously used these measures to impose tariffs on exports from China, automobiles, and metals. Earlier on Friday, Trump hinted that these investigations could proceed under a 10% benchmark tariff and ultimately replace the uniform tariff rate - although he did not rule out seeking an extension of the tariffs under Section 122. He indicated considering imposing tariffs of approximately 15% to 30% on foreign automobiles. Economists at Bloomberg Economics have forecasted that President Trump's plan to impose a 10% global tariff could raise the average effective tariff rate in the US from 13.6% to 16.5%, with a slight decrease to 11.4% if current exemption rules are maintained. When asked about existing exemptions, US Trade Representative Jamieson Greer stated that the White House is seeking "policy continuity" and will continue existing exemptions through a new order that will take effect when Trump delivers the State of the Union address to Congress. Under these exemptions, trade goods under the US-Mexico-Canada Agreement (USMCA) will continue to be exempt. The latest executive order from Trump also maintains exemptions for some agricultural products consistent with previously announced tariffs. The Trump administration plans to use a combination of legal tools to support its trade policy system Some trade experts predict that there may be more and larger trade disruptions by 2026. Overall, the Trump administration plans to use a combination of legal tools to support its trade policy system - with Section 122 as a temporary, uniform global tariff benchmark, and provisions like Section 301 and Section 232 for "deep-level" trade measures targeting specific countries or industries, responding to the Supreme Court's ruling of overreach regarding the IEEPA while leaving room for higher tariff rates on specific trading partners (such as China and the EU). Following the Supreme Court ruling that Trump's imposition of large-scale "reciprocal tariffs" under the International Emergency Economic Powers Act (IEEPA) was unlawful, the Trump administration quickly turned to other legal frameworks to maintain its tariff policy. These new legal tools are different from the direct imposition of tariffs on countries like China with tariffs far exceeding 10%, as they require more detailed procedures, investigations, and clearer legal grounds. Firstly, Trump relies on Section 122 of the Trade Act of 1974, which allows for the temporary imposition of around 10% tariffs on a broad trade imbalance rationale for 150 days without congressional approval. This mechanism sets a uniform tariff rate for overall imports (such as the 10% global tariff), rather than the "reciprocal" or specific country high tariff rate policies previously imposed on China, the EU, etc. The legal basis of Section 122 focuses more on trade statistics and payment balances, rather than emergency powers. At the same time, existing tariffs significantly above 10% on China and other countries or regions may still be maintained or adjusted through other specific provisions: For example, Section 301 allows for investigations into unfair trade practices by specific countries or industries, and higher tariffs are imposed after determining violations of agreements or unfair practices, usually requiring longer investigative and hearing processes. Section 232 imposes high tariffs on specific products (such as steel, automobiles) on the grounds of "national security", and these measures and investigation procedures are relatively independent of Section 122 and can maintain or set high tariff levels separately. In other words, the high tariff rates on China, the EU, etc. under the Trump administration are not simply covered by the 10% global benchmark, but may continue to exist or be adjusted through legal frameworks like 301 and 232 which differ from a single benchmark tariff. The procedural and targeted nature of these laws means that tariffs above the benchmark require more specific statutory procedures, rather than a one-size-fits-all uniform tariff. "Treasury Department estimates show that combined with enhanced versions of Section 232 and Section 301 tariffs that may start soon, tariff revenue in 2026 will remain almost unchanged," said US Treasury Secretary Scott Benet at a Dallas Economic Club event on Friday. US tariff refund issue may become a tug of war The Supreme Court's ruling has raised new issues regarding the tariff revenue already collected in the US. According to an analysis report by Bloomberg Economics, over 1,500 companies have filed tariff lawsuits in trade courts in preparation for this ruling. Despite President Trump telling reporters after the Supreme Court's tariff ruling that the US government will soon impose a 10% global tariff under Section 122 of the Trade Act of 1974, it is unclear whether the US government will need to refund the tariffs already collected. Concerns in the market about deteriorating US fiscal conditions due to tariff refunds prompted a significant increase in long-term US government bond yields, with traders collectively giving a negative response when evaluating the risks of expanding the US budget deficit. The Supreme Court justices did not address whether importers have the right to receive refunds, which will be ruled on by lower courts in the US, meaning the issue of tariff refunds may become a prolonged tug of war in the courts. Trump criticized the Supreme Court for not providing guidance on how refunds should be handled. "That was not discussed. We're going to be in court for five years fighting it out," Trump said at a White House press conference. Refunds could total an astonishing $170 billion - more than half of the total tariff revenue generated by Trump's tariff policy. Nevertheless, US Treasury Secretary Scott Benet stated that despite the Supreme Court ruling, tariff revenue will remain "almost unchanged" in 2026. Republican Congressman from Nebraska and tariff critic Don Bacon warned that Trump's plan to impose a 10% tariff and use other mechanisms to collect tariffs will lead to more Republicans voting against his trade agenda. Congressman Bacon, who is not seeking re-election, said, "If he does this, Congress will have more votes on these issues. That's a fact." Last week, Bacon was one of six Republicans who joined House Democrats in overturning Trump's tariffs on Canada.