US Launches 10% Import Tariff, Signals Possible Increase to 15%

The United States began collecting a temporary 10% global import tariff under Section 122 of the Trade Act of 1974 following the Supreme Court’s decision invalidating broader tariffs imposed under the International Emergency Economic Powers Act, creating renewed uncertainty around US trade policy. The measure, which could rise to 15% and last up to 150 days, affects Mexican exports not covered by USMCA preferences and adds risk for manufacturing, automotive, energy and agro-industrial supply chains integrated across North America. 

The United States began collecting a temporary 10% global import tariff, on Feb. 24, under Section 122 of the Trade Act of 1974, despite last week’s Supreme Court ruling that struck down earlier duties.

At midnight, US Customs and Border Protection notified shippers that imports, aside from exempted products, would “be subject to an additional ad valorem rate of 10%,” citing Trump’s executive order on Feb. 20. The order imposes the tariff for up to 150 days.

A White House official told Reuters that Trump has had “no change of heart” in his desire for a 15% tariff under Section 122 but did not provide details on when the higher rate could take effect. As of Feb. 23, Trump had not signed a formal presidential order authorizing the increase, and CBP can only act on published executive orders and proclamations.

The rollout has added to confusion around US trade policy. Trump initially signed an order on Feb. 20 establishing a 10% tariff to replace broader duties imposed under an emergency law that the Supreme Court invalidated. On Feb. 21, he said he would raise the rate to 15%. No explanation was provided in the CBP notice for why the lower rate was implemented.

Tariffs Under Section 122 Spark Legal and Global Trade Concerns

Section 122 allows the president to impose duties for up to 150 days to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.” Trump’s order argues that such a deficit exists, citing a US$1.2 trillion annual US goods trade deficit, a current account deficit of 4% of GDP, and a reversal of the US primary income surplus.

Some economists and trade lawyers argue that the United States is not facing a balance-of-payments crisis, potentially exposing the new duties to further legal challenges. 

Carsten Brzeski, Global Head of Macro, ING, said the 150-day limit may not reduce uncertainty. “Because the next thing that he (Trump) could do is always, with the interruption of one day, theoretically endlessly extend by 150 days,” he said.

Markets reacted cautiously. European shares opened lower on Feb. 24, with traders citing trade uncertainty, though the pan-European STOXX 600 index later traded flat. Deutsche Bank said in a note that “Net-net we still think the effective tariff rate will fall this year and that the world post-SCOTUS will see lower tariffs than the pre-SCOTUS world.”

Trump also warned countries against reneging on previously negotiated trade agreements, saying he would impose higher duties under other laws if they backed away from commitments.

Japan said it had asked the United States to ensure its treatment under the new regime would be as favorable as under its existing agreement. The EU, Britain and Taiwan also indicated a preference to maintain their current trade arrangements. China urged Washington to abandon its “unilateral tariffs” and signaled it was willing to hold another round of trade talks

Supreme Court Invalidates Trump Tariffs Imposed Under IEEPA

Last week, the Supreme Court of the United States ruled that tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority.

The 1977 law allows the president to regulate economic transactions in response to a declared national emergency to address “unusual and extraordinary threats.” However, it does not explicitly authorize the imposition of tariffs.

US Chief Justice, John Roberts, wrote for the majority: “When Congress has delegated its tariff powers, it has done so in explicit terms and subject to strict limits. Had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes.”

The Trump administration had argued that the measures were justified by national emergencies tied to drug trafficking, migration, trade imbalances and geopolitical concerns. The tariffs were first introduced in 2025 targeting Mexico, Canada and China, before expanding globally in April.

As of Dec. 31, 2025, the United States had implemented a series of IEEPA-based tariffs globally. Canada faced a 35% tariff on most goods, 10% on energy and potash and 40% on goods deemed transshipped to evade duties, with exemptions for imports qualifying under USMCA. Mexico was subject to 25% tariffs on most goods and 10% on potash, excluding USMCA-compliant imports. China saw fentanyl-related tariffs start at 10%, rise to 20% and later return to 10% following trade discussions.

Additional measures included global tariffs ranging from 10% to 41%, 40% duties on transshipped goods, 25% tariffs on certain countries importing Venezuelan oil, and special rules for low-value imports under US$800, with per-package fees between US$80 and US$200. Brazil and India were also targeted with country-specific tariffs.

According to government data, the United States collected about US$130 billion under the IEEPA tariff regime. Studies indicate most of the cost was absorbed by US importers and consumers. The ruling opens the door to potential refunds, though it does not define the reimbursement process, leaving implementation to the Court of International Trade.