US Treasury Signals Possible 15% Global Tariff Implementation This Week
US Treasury Secretary Scott Bessent indicated that the United States is "likely" to impose a 15% global tariff this week, following mixed messages from President Donald Trump regarding the tariff rate.
The proposed tariff aims to replace the broad global import taxes that Trump introduced last year but were recently invalidated by the Supreme Court.
In response to the court ruling, the White House implemented a 10% tariff, despite President Trump asserting on social media that the rate would be 15%.
This inconsistency caused widespread confusion internationally, prompting calls from businesses and world leaders for clarification.
White House officials have stated they are preparing the necessary paperwork to align the tariff duties with President Trump's statements.
They have downplayed the impact of the Supreme Court decision, asserting that alternative legal mechanisms can be employed to reinstate the tariff policies, which they argue will help rebalance trade, support American manufacturing, and reduce US debt.
To enforce the 10% tariff, the White House utilized an untested trade authority known as Section 122, which permits the US president to impose tariffs up to 15% without congressional approval for a period of 150 days under specific circumstances.
The administration has also indicated plans to use other legal avenues to restore the tariff regime on a more permanent basis.
"It's my strong belief that the tariff rates will be back to their old rate within five months," Bessent told CNBC.
Considerable uncertainty remains regarding the future structure of US import tax policies.
In April of the previous year, President Trump announced 'Liberation Day' tariffs targeting numerous countries, with rates beginning at 10% and escalating to as high as 50% in certain cases.
These duties initiated a series of trade negotiations, as affected countries sought to secure reduced rates in exchange for commitments to investment and other reforms.
The Supreme Court ruling invalidated these 'Liberation Day' tariffs as well as some tariffs previously announced on goods from Mexico, Canada, and China, citing the misuse of emergency powers.
Following the ruling, President Trump announced a 10% global tariff, which he later claimed on social media would be increased to 15%. However, the tariff was ultimately implemented at the 10% rate.
The shift to a uniform 10% tariff, with exemptions for certain goods, placed shipments from all countries on equal footing.
This development raised questions about the status of agreements allies had secured with the Trump administration after 'Liberation Day', while eliminating advantages previously granted to some countries, such as the United Kingdom.
Sector-specific Tariffs
The White House has indicated it will rely on other legal instruments, specifically Section 301 and Section 232, to impose tariffs once the 150-day period expires.
These types of tariffs typically focus on particular countries or industries, enabling the US to levy duties in response to unfair trade practices and national security concerns, respectively.
President Trump has previously applied these authorities to impose import taxes on metals such as steel and aluminium, automobiles, and other products. He has also considered using them in disputes over digital taxes, pharmaceutical imports, and additional matters.
These mechanisms require the administration to follow established procedures, including conducting investigations to justify the duties and providing affected businesses with specified notice and opportunities for comment.
Businesses have expressed a preference for adherence to these procedural requirements over abrupt policy announcements, as the former approach allows more time to adapt to changes, even if the ultimate policies remain largely unchanged.
