Trump’s 10 per cent global levy takes effect as US rebuilds tariff wall

WASHINGTON – US President Donald Trump’s new 10 per cent global tariffs took effect on Feb 24, kicking off a White House effort to preserve his trade agenda after the Supreme Court

struck down his original sweeping duties

.

Mr Trump signed an executive order on Feb 20

authorising the 10 per cent import tax

just hours after the ruling.

He subsequently threatened to

raise the number to 15 per cent

, but did not officially issue a directive to increase the rate by Feb 24 at 12.01am Washington time (1.01pm Singapore time), when the 10 per cent levy went into effect.

The White House is working on a formal order to increase the global tariff rate to 15 per cent, according to an administration official.

The timeline for implementing that higher levy has not been finalised, said the official, who spoke on condition of anonymity to discuss private matters.

The lack of clarity from Washington has spawned confusion around the globe about Mr Trump’s tariff agenda.

Countries and corporations are poring over existing trade agreements to determine how they would fare under the latest threats. Major trading partners, including the European Union and India, have abruptly halted ongoing trade negotiations amid the uncertainty.

Mr Trump is applying the 10 per cent baseline levy under Section 122 of the 1974 Trade Act, which allows the US leader to impose the charge for 150 days without congressional approval.

He turned to this approach after the court ruled that he violated an emergency-powers law by using it to enact his so-called reciprocal tariffs on goods from countries worldwide.

The order preserved some exemptions, including for goods compliant with the North American trade pact between the US, Canada and Mexico, as well as for some agricultural goods that existed under Mr Trump’s invalidated levies.

The average effective US tariff rate will settle at around 10.2 per cent, including those exemptions, down from 13.6 per cent before the court decision, according to a Bloomberg Economics analysis.

Under a 15 per cent global levy, that effective rate would be about 12 per cent, according to the study.

Not as flexible

Mr Trump’s team has said tariffs will remain central to his trade policy, reiterating plans to launch a series of investigations on accelerated timelines to allow him to unilaterally impose duties, all with the goal of rebuilding the tariff regime the court ruling effectively destroyed.

None of the authorities the White House has identified, such as Section 301 and Section 232, are as flexible as the emergency powers Mr Trump previously used to wield leverage against trading partners.

The administration is preparing to launch investigations into the impact of importing a spate of industrial goods – including batteries, cast iron and iron fittings, electrical grid and telecommunications equipment, plastic piping and some chemicals – on the basis of national security concerns.

The probes, which have not yet been officially announced, are a precursor to new tariffs, but could take months to conclude.

As they respond to the justices’ decision, administration officials have urged trading partners to uphold deals they have negotiated with the US over the last year.

“We want them to understand these deals are going to be good deals,” US Trade Representative Jamieson Greer said on CBS’ Face The Nation on Feb 22. “We’re going to stand by them. We expect our partners to stand by them.”

That argument proved less than reassuring to some major economies.

The EU froze ratification of its agreement with the US on Feb 23 until Mr Trump firms up his latest tariff plans. In New Delhi, officials cited similar reasons for India’s postponement of talks in the US this week on finalising an interim trade deal.

Mr Trump, on Feb 23, threatened even higher tariffs on partners that “play games” with their existing agreements.

European Central Bank president Christine Lagarde said on Face The Nation that it is “critically important” for global trade to “have clarity” from the US administration.

Mr Trump’s threat to raise the global baseline to 15 per cent has also rattled some traditional allies that cut deals with him.

Britain negotiated a 10 per cent rate with the administration in 2025, and the higher level could create a less favourable situation for its exporters.

Meanwhile, other more adversarial nations, including China, may find their hand strengthened in negotiations with Mr Trump now that his emergency powers have been curtailed.

Mr Trump is

set to visit Beijing in late March

for a highly anticipated meeting with Chinese President Xi Jinping.

The tariffs took effect hours before Mr Trump is expected to deliver his State of the Union address to Congress, which will be attended by Democrats and some Republicans who have opposed elements of his trade policy.

The prime-time speech is expected to focus on his economic agenda as Republicans try to land on a midterm election message for an electorate frustrated by the cost of living.

The public is souring on Mr Trump’s trade policies and increasingly sees them as driving prices higher, polls show. A Washington Post/ABC/Ipsos survey found that 64 per cent of Americans disapproved of Mr Trump’s handling of tariffs, compared with 34 per cent who approved. BLOOMBERG