President Donald Trump imposed new 10% tariffs worldwide after the U.S. Supreme Court struck down previous trade measures, sparking immediate government and market concerns and reactions.
On Friday, President Trump announced the decision on his social media platform Truth Social, saying he had signed an executive order imposing tariffs worldwide and would take effect “almost immediately.”
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The U.S. Supreme Court ruling and President Trump’s new tariffs have left countries grappling with legal and economic fallout, raising questions about the legality of ongoing agreements, tariff reductions, and past tariffs.
The government is currently assessing how new taxes will affect key industries, investment plans and trade negotiations, but analysts warn that uncertainty may persist until the legal and trade frameworks are clearer.
South Korea
In South Korea, the presidential office of one of the United States’ closest allies issued a statement saying the government would review trade agreements and make decisions in the national interest, calling into question the signing last November that lowered tariffs from 25% to 15% in exchange for $350 billion in cash and investment from South Korea to the United States.
“For South Korea’s big chemical, pharmaceutical and semiconductor companies, the Supreme Court’s ruling was positive. Even if President Trump introduces a new 10% tariff under Section 122, they will still pay a lower tax rate,” said Jack Burton, Al Jazeera’s Seoul correspondent.
“However, this ruling did not affect exporters of automobiles, more than half of which go to the United States, which are still subject to a 25% tariff, and steel exports, which are still subject to a 50% tariff under Section 232.”
The South Korean government is expected to respond cautiously. Exports account for 85% of South Korea’s gross domestic product, with the United States its second largest market.
“Officials have indicated that the rapid changes could jeopardize recent major agreements with the United States, including multibillion-dollar shipbuilding contracts and other investments,” Burton said.
“Although there is no final policy statement yet, the Office of the President has stated that the trade agreement is being carefully considered and is likely to change.”
India
India has faced some of the highest U.S. tariffs under President Trump’s previous use of emergency trade powers. The president first imposed a 25% tariff on imports from India, then added another 25% to the country’s purchases of Russian crude oil, bringing the total to 50%.
Earlier this month, the United States and India agreed to a framework trade agreement. President Trump said Prime Minister Narendra Modi had agreed to halt purchases of Russian crude oil and agreed to reduce U.S. tariffs to 18% on India’s major exports to the U.S., including clothing, medicine, precious stones and textiles. Meanwhile, India announced it would eliminate or reduce tariffs on all U.S. industrial products and a wide range of agricultural products.
“Critics have argued that New Delhi should have waited for the U.S. Supreme Court’s ruling before finalizing the interim trade deal, and even trade analysts previously associated with the government have argued that it would have been wiser to wait for the court’s decision,” said MK Venu, a political economist and founding editor of Indian publication The Wire.
Venu added that President Trump is keen to conclude a trade deal that includes a commitment to buy $500 billion worth of new imports from the United States over the next five years in the defense, energy and artificial intelligence (AI) sectors.
He said that although India welcomed the reduction in customs duties to 18% and the removal of penalties on imports from Russia, uncertainty surrounding the negotiations remained as the Supreme Court’s ruling affected the legal basis of past tariffs.
“India’s trade mission is likely to wait for the final outcome of the Supreme Court’s ruling before proceeding with further negotiations, and countries around the world are expected to abide by the court’s ruling rather than rush into trade deals based on legislation deemed unconstitutional,” he said.
China
China’s reaction to the Supreme Court’s ruling has been muted as most of the country is still on the Lunar New Year holiday.
Al Jazeera’s Rob McBride, reporting from Beijing, said: “The Chinese embassy in Washington issued a comprehensive statement noting that a trade war is in no one’s interest and that the decision is likely to be widely welcomed in China, which has long been a major target of President Trump’s tariff policies.”
Since April last year, China has faced multiple tiers of tariffs, including 10% on chemicals used to make fentanyl exported to the United States and 100% on electric vehicles, he said.
Analysts estimate that the overall tariff level could fall to about 21% from about 36%, providing some relief to an economy already under stress due to the coronavirus pandemic, a prolonged real estate crisis and declining exports.
Shipments from China to the United States have reportedly fallen by about a fifth in the past year.
“Beijing is seeking to make up for losses in the U.S. market by strengthening trade ties with Southeast Asian countries and pursuing agreements with the European Union,” McBride said.
“The Supreme Court’s ruling could also create a more favorable atmosphere ahead of President Trump’s state visit scheduled for early April, when he is scheduled to meet with President Xi Jinping, giving scope for a reset in relations between the world’s two largest economies.”
Canada
Canada welcomed the U.S. Supreme Court’s decision, but noted that there are still challenges ahead.
Al Jazeera’s Ian Wood reported from Toronto that regional leaders across the country, including British Columbia and Ontario, called the ruling a positive step.
However, Canada-U.S. Trade Minister Dominic LeBlanc said significant work remains, with Section 232 tariffs on steel, aluminum, softwood lumber and automobiles still in place.
Meanwhile, Wood added that Ontario Premier Doug Ford, despite widespread optimism, remains nervous about what Donald Trump will do next.
Mexico
Mexican President Claudia Sheinbaum said her government would carefully consider the Supreme Court’s decision and assess its scope and the extent to which Mexico could be affected.
“Despite everything we’ve heard over the last year about tariffs and the threat of tariffs, Mexico is actually in a very good, even competitive position, especially when compared to other countries,” Al Jazeera’s Julia Gugliano said in an interview from Mexico City.
“Remember, Mexico is the United States’ largest trading partner, and our two countries, along with Canada, share an extensive trade agreement that protects most products from the so-called reciprocal tariffs announced by President Trump.
“Punitive tariffs related to fentanyl and illegal immigration were also imposed along the U.S. border, but Mexico has managed to suspend them while negotiations on those issues continue. Tariffs currently imposed by Mexico on steel, aluminum, and auto parts are not affected by today’s decision.”
So the Mexican government here is now waiting to see what the Trump administration will do next, reeling from today’s Supreme Court ruling, she said.
The limits of President Trump’s tariff power
A senior legal scholar told Al Jazeera that the U.S. Supreme Court’s decision marks a key moment in the legal battle over President Trump’s tariffs, which focuses on constitutional limits rather than economic aspects.
Frank Bowman, a professor emeritus at the University of Missouri School of Law, told Al Jazeera that this was the first time the court had faced what he called Trump’s broader challenge to the rule of law.
“This is an important decision on several counts. First, and more broadly, it is the first time in the last year that the Supreme Court has attempted to intervene and do something about Donald Trump’s full-scale attack on the rule of law in the United States.
“Make no mistake about it. Tariffs are certainly an economic issue, but what President Trump has done this past year is inherently against the law. And the Supreme Court has happily decided that enough is enough and will say no. So they’re not ruling on economic policy. They’re ruling that the president simply exceeded his constitutional authority.”
