US to Raise Tariffs to 15%; Courts Order Refunds on Duties

The United States is set to raise its global tariff rate to 15% under Section 122 of the Trade Act of 1974, following a Supreme Court ruling that invalidated prior duties imposed under the International Emergency Economic Powers Act (IEEPA). The decision has triggered refunds for roughly US$130 billion in tariffs already collected, while importers, exporters, and logistics companies face continued uncertainty over trade costs and compliance. As the United States' largest trading partner and a country that faced a 25% IEEPA tariff on goods outside USMCA coverage, Mexico stands among the most directly exposed to whatever replaces the invalidated duties.

The United States is set to raise its global tariff rate to 15% this week, even as federal courts begin ordering customs refunds on the prior duties the Supreme Court struck down, leaving businesses navigating a deepening tug-of-war between the executive and judicial branches over trade policy.

US Treasury Secretary Scott Bessent confirmed on CNBC's Squawk Box that the increase, from the current 10%, is "likely sometime this week." The new tariffs are being implemented under Section 122 of the Trade Act of 1974, which allows the president to impose temporary duties for up to 150 days without congressional approval, a more legally durable route than the emergency powers previously used.

"They are more slow moving, but they are more robust," Bessent said of the new legal framework. "They have survived more than 4,000 legal challenges."

The increase of tariffs follows the Feb. 20 Supreme Court ruling, in which a 6-3 majority found that President Trump lacked the authority to use the International Emergency Economic Powers Act (IEEPA) to bypass Congress and impose broad import duties. Hours after the decision, Trump signed an executive order establishing a replacement tariff of 10%, with an announcement that the rate would soon rise to 15%. Bessent said he expects the broader tariff structure to be fully restored within five months.

While the administration moves to rebuild its trade barriers, a separate legal front has opened over what happens to the roughly US$130 billion already collected under the now-invalidated IEEPA tariffs. 

The US Court of International Trade has ordered Customs and Border Protection to issue refunds to all importers who paid those duties, following a case brought by Tennessee-based filtration company Atmus Filtration Technologies. Judge Richard Eaton ruled that he will oversee future tariff refund claims, writing that "all importers of record whose entries were subject to IEEPA duties are entitled to the benefit" of the Supreme Court's ruling.

Major companies have already moved to recover their payments. FedEx has filed a lawsuit seeking full reimbursement of the tariffs it paid, and business groups are pushing for a swift and automatic refund process. Dan Anthony, representing the small-business coalition We Pay the Tariffs, called the court order an important step but stressed urgency. "American small businesses have waited long enough. A full, fast, and automatic refund process is what these businesses are owed and anything less is unacceptable."

The refund timeline remains unclear. The Trump administration has criticized the prospect of issuing reimbursements, and the exact mechanics of repayment are still to be determined. 

Meanwhile, the Office of the US Trade Representative and the Commerce Department will conduct trade studies during the 150-day window under the new tariff framework, work that could lay the legal groundwork for additional, longer-lasting duties.

The developments underscore the volatility of US trade policy, with one set of tariffs dismantled by the courts while a new set is being implemented, leaving importers, exporters, and businesses uncertain about costs and rules for trading with the United States.

The Tariffs the Supreme Court Struck Down: A Country-by-Country Overview

The Supreme Court's ruling invalidated a sweeping set of tariffs imposed under the IEEPA, covering nearly every major US trading partner. Here is what was revoked: 

Mexico

Mexico was one of the first and hardest-hit targets. A 25% tariff on all Mexican goods not covered by the USMCA took effect on March 4, 2025, with a 10% rate applied specifically to potash imports. A proposed increase to 30%, announced for Aug. 1, was delayed pending ongoing bilateral negotiations.

The impact of losing these duties is significant. Mexico is the United States' largest trading partner, with bilateral goods trade exceeding US$800 billion annually. USMCA-qualifying goods were already exempt, but the 25% levy hit a broad range of manufactured goods, agricultural products, and industrial components outside the agreement's scope. 

Canada

Canada faced a tiered tariff structure: 35% on most goods not covered by USMCA, 10% on energy and potash imports, and a punishing 40% on goods suspected of being transshipped to evade duties. The initial 25% rate took effect March 4, 2025, and was raised to 35% on Aug. 1. USMCA exemptions and the energy carve-out became effective March 7.

China

China was subject to IEEPA fentanyl-linked tariffs that fluctuated significantly over the year: 10% from Feb. 4, 2025, rising to 20% on March 3, then reduced back to 10% on Nov. 10 following trade talks. 

Venezuela-Linked Countries

A 25% tariff applied from April 2, 2025, to goods from countries designated by the US Secretary of State as importers of Venezuelan oil. This geopolitically driven measure targeted trade flows through nations seen as enabling the Maduro government's oil revenues. Its revocation may restore normal duty treatment for affected countries.

Brazil

Brazil faced a 40% tariff effective Aug. 6, 2025, on most of its goods, one of the highest country-specific rates in the IEEPA framework. Unusually, the measure was justified on political grounds: the executive order cited a national emergency stemming from the Brazilian government's prosecution of former President Jair Bolsonaro, online platform regulation, and related governance issues. Agricultural and energy products received partial exemptions.

India

A 25% tariff on most Indian goods, linked to India's continued imports of Russian oil, took effect Aug.27, 2025, with exemptions for products already covered by Section 232 actions.

Global and Low-Value Import Tariffs

Beyond bilateral measures, the IEEPA framework included a sweeping global minimum tariff of 10% on most trading partners, with country-specific rates ranging up to 41%, implemented in two tranches (April 5 and Aug.7, 2025). A parallel regime targeted low-value "de minimis" shipments under US$800, initially from China (effective May 2), and then globally (from Aug. 29), with per-package fees of US$80 to US$200 or an ad valorem equivalent.

What This Means Going Forward

The Supreme Court's ruling does not end tariffs on these trading partners, it ends IEEPA as the legal vehicle for imposing them. The administration is already rebuilding under Section 122 of the Trade Act of 1974, a narrower but more litigation-proof authority, while the USTR and Commerce Department have launched trade investigations that could justify additional, longer-lasting duties. 

For businesses, the refunds now being ordered by courts may offer short-term relief, but the underlying trade policy direction has not changed. New tariffs are coming, just through a different legal vehicle.