President Donald Trump has announced a new 10% universal tariff on most imports to the United States, following a Supreme Court decision that sharply limited his authority to impose unilateral country-specific duties. The move represents a swift administrative response to a major legal setback for his trade policy.
The U.S. Supreme Court ruled 6-3 on February 20 that the 1977 International Emergency Economic Powers Act (IEEPA), which Trump relied on for his broad tariff measures, does not authorize a president to impose tariffs. The Court stated that if Congress intended to grant such power, it would have done so explicitly. This ruling invalidated many of the administration’s previous country-targeted duties, which had upended global trade flows.
In reaction, Trump signed an order implementing the new across-the-board 10% duty, which is set to take effect on February 24 for 150 days. The White House confirmed the measure will apply even to nations with existing bilateral tariff agreements, though exempting goods covered by the U.S.-Mexico-Canada Agreement and sectors under separate investigations, such as pharmaceuticals. A White House official indicated the administration would later seek to adjust rates back to pre-negotiated levels.
The decision triggered immediate debate over financial consequences. The administration contended the new structure would yield similar tariff revenue for 2026, while analysts estimated potential refunds for unlawfully collected duties could reach $175 billion. Legal experts noted the ruling did not mandate refunds, leaving the question to future litigation. “There is no legal mechanism for many small businesses to recoup payments,” warned Senator Elizabeth Warren, while California Governor Gavin Newsom demanded immediate refunds with interest.
The ruling maintains the highest average U.S. tariff rate since 1946, now estimated at 9.1% following the reduction from the previous peak. Wall Street reacted modestly positively, and business groups like the National Retail Federation welcomed the increased legal certainty. International partners, including the European Union and Canada, are assessing the new policy, with Canadian trade officials warning of potential “blunter mechanisms” and further disruption.
Trump, who had appointed two of the justices who opposed him, criticized the Court’s decision, suggesting without evidence that foreign interests influenced the justices and claiming the ruling actually enhanced his power. Treasury Secretary Scott Bessent, meanwhile, sought to assure markets that revenue impacts would be minimal.
The episode underscores the ongoing conflict between executive trade authority and congressional intent, ensuring that U.S. trade policy will remain a source of domestic legal disputes and international friction in the months ahead.
