(NEW YORK) — A 10% global tariff took effect on Tuesday, marking the first duty enacted by President Donald Trump after a recent Supreme Court decision invalidated most of his levies.
Within hours of the high court’s ruling on Friday, Trump signed an executive order imposing a 10% tariff on nearly all imports for up to 150 days. The directive called for enforcement of the duty to begin at 12:01 a.m. ET on Tuesday, Feb. 24.
Soon after signing the order, Trump vowed to hike the global tariff to 15%. As of Tuesday, however, the president had not issued an executive order formalizing that increase.
Stocks ticked higher Tuesday morning, recovering some of the losses suffered a day earlier in the first trading session since Trump announced the tariff increase.
Trump enacted the 10% tariff under Section 122 of the Trade Act of 1974, which allows the White House to address “large and serious” balance-of-payments deficits, or disparities between a country’s total payments in transactions with other nations and its total earnings.
Under the measure, the president can also impose levies to “prevent an imminent and significant depreciation of the dollar.”
The Section 122 tariffs will result in price increases amounting to $800 in additional costs for an average U.S. household over the next 150 days, the Yale Budget Lab projected. In order to extend the across-the-board 15% tariff beyond that time window, Trump would need to secure Congressional approval.
Senate Minority Leader Chuck Schumer, D-N.Y., said Monday that Democrats would oppose an extension of Section 122 tariffs, which could deny Trump the 60 votes necessary to overcome a potential Senate filibuster.
In a social media post on Monday, Trump affirmed what he said was his authority to issue tariffs, saying he does not need to consult Congress before erecting new trade levies.
Trump also reiterated his commitment to his policy approach, warning other countries that they may face a “much higher Tariff, and worse.”
The high court ruled in their February 20 decision that the International Emergency Economic Powers Act (IEPPA) does not authorize Trump to impose levies, nullifying a major swathe of tariffs issued by the president on April 2 of last year, which he dubbed “Liberation Day,” and a host of other measures.
If the Supreme Court had opted to uphold tariffs issued under IEPPA, the nation’s effective tariff rate would have remained at 16%, the Yale Budget Lab said. Taking into account the Section 122 tariffs, the effective tariff rate now stands at 13.7%, the group said.
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