TLI Staff
US President Donald Trump’s new global tariff regime has come into force at 10%, lower than the 15% rate he indicated over the weekend, a move that has deepened uncertainty and heightened fears of a broader trade war, the BBC reported.
Tariff rate lower than signalled after Supreme Court setback
According to official documents cited by the BBC, the tariffs were implemented at 10% from Tuesday, with no directive issued to raise them further. The development follows a ruling by the Supreme Court of the United States on Friday blocking several of Mr. Trump’s earlier sweeping import taxes imposed under the International Emergency Economic Powers Act (IEEPA).
Experts warn of retaliation and rising risk of trade war escalation
Carsten Brzeski, an analyst with ING, told the BBC that the rapid shifts in tariff announcements were compounding business uncertainty. “I think it simply adds to the chaos and mess,” he said, referring to the fast-changing policy landscape and its impact on global firms.
“In terms of uncertainty we’re back to where we were last year,” Mr. Brzeski told the BBC’s Today programme, warning that the risk of retaliation by US trading partners had risen. “The risk of a real fully-fledged tariff war – trade war – escalation is clearly higher than last year,” he said.
The temporary 10% levy has been introduced under Section 122 of the Trade Act of 1974, which allows the president to impose tariffs for up to 150 days without congressional approval. In an executive order quoted by the BBC, Mr. Trump said the measure was intended to “address fundamental international payments problems” and rebalance trade relationships in favour of American workers and manufacturers.
However, the US trade deficit has continued to widen, reaching roughly $1.2 trillion, according to official data cited by the BBC. The administration has already collected at least $130 billion in tariffs under IEEPA, the broadcaster reported.
The Supreme Court’s ruling has opened the possibility of businesses seeking refunds on tariffs collected under IEEPA. Justice Brett Kavanaugh said in the judgment that any refund process was likely to be a “mess”, according to the BBC.
Logistics giant FedEx has filed a lawsuit seeking a “full refund” of import taxes paid under IEEPA, the BBC reported. Meanwhile, campaign group We Pay The Tariffs said in an open letter that it represents more than 900 US entities demanding “full, fast, and automatic refunds”.
Despite this, Mr. Trump has indicated that the matter could be litigated for years. He sharply criticised the court’s decision, calling it “ridiculous, poorly written, and extraordinarily anti-American”, the BBC said.
The uncertainty has prompted international responses. The UK government said no reciprocal action was “off the table” if Washington failed to honour a tariff understanding, though it added that “no one wants a trade war”, according to the BBC. The European Union has suspended ratification of a summer trade deal, while India has deferred previously scheduled talks on finalising a recent agreement.
Brando Benifei, chair of the European Parliament’s delegation for relations with the US, told the BBC that if conditions worsened, the bloc would need to respond. “If we get worse conditions then we need to react,” he said, urging countries unhappy with Washington’s approach to work together.
With policy signals shifting and legal challenges mounting, analysts told the BBC that the likelihood of retaliatory measures — and a spiralling trade confrontation — has increased markedly.