Some U.S. allies see higher tariffs under new tariffs, while rivals expect relief, trade group says

The UK, European Union and Singapore face increased trade-weighted tariffs, while countries including Brazil, China and India will see their tariffs reduced after US President Donald Trump announced he would raise global tariffs to 15%.

This comes after the U.S. Supreme Court ruled in a 6-3 tariff decision that the president had unfairly invoked the International Emergency Economic Powers Act (IEEPA) to enforce the tax.

President Trump then responded by imposing a 10% tariff worldwide under Section 122 of the Trade Act of 1974, which was later increased to 15%.

On a trade-weighted basis, average tariff rates in the UK are expected to rise by 2.1 percentage points, while in the EU they are expected to rise by 0.8 percentage points, according to analysis by Swiss-based trade watchdog Global Trade Alert. In contrast, Brazil fell by 13.6 points and China by 7.1 points.

The European Commission said it would not raise tariffs beyond the previously agreed 15% cap and that “a deal was a deal” and asked for “full clarification” on the ruling. Last August, the 27 member countries reached a trade deal with the United States that capped exports to Washington at 15% tariffs.

Asian allies Japan and South Korea face trade-weighted average tariff increases of 0.4 percentage points and 0.6 percentage points, respectively. The two countries agreed last year to impose a 15% tariff on exports to the United States.

Some experts said the Supreme Court’s decision provides the greatest relief to countries hit hardest by IEEPA-related tariffs so far, but others told CNBC it disadvantages countries that first negotiated trade deals with the United States.

Johannes Fritz, CEO of the St. Gallen Trade and Prosperity Fund and author of the GTA report, said countries such as China, Mexico and Canada face reciprocal tax rates from April 2025, as well as dedicated tariff orders related to opioids and border security. Brazil and India also said they were facing their own IEEPA orders.

“The Supreme Court struck down all of these, not just the reciprocal tariffs,” he explained to CNBC. “So the countries with the greatest exposure to IEEPA received the greatest relief.”

Fritz pointed out that the reductions would be smaller in the EU and other allies, where IEEPA contributions are mainly limited to reciprocal interest rates.

Countries that have negotiated a 10% ‘reciprocal rate’, such as the UK, or countries that receive a basic rate of 10%, such as Singapore, Australia and Saudi Arabia, will see their trade-weighted tariff rates rise as IEEPA tariffs are replaced by Section 122 tariffs.

But Saran Sidor, director of the Quincy Institute’s Global South program, took a different view, telling CNBC’s “Inside India” that “countries that struck deals with the U.S. early after last year’s Liberation Day tariffs are, in a sense, left holding the bag.”

“Meanwhile, other countries that have resisted agreeing to any US demands, such as Brazil, may feel a little more vindicated.”

Sidor’s view is echoed by Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “Countries that have suffered from higher tariffs and have not negotiated significant cuts will benefit more,” he told CNBC.

He pointed to Japan, which last year lowered its “reciprocal tariffs” to 15% in exchange for $550 billion in investment commitments to the United States.

“The government has confirmed that it will continue to invest in the United States despite the Supreme Court ruling. In other words, they are paying to receive the same treatment as other countries,” Herrero said.

In Asia, most countries are taking a wait-and-see attitude toward the Supreme Court’s ruling and Article 122 tariffs.

China’s Ministry of Commerce said in a statement on Monday that it was “comprehensively evaluating” the Supreme Court’s ruling and called on the United States to “rescind unilateral tariffs against trading partners.”

Indian trade negotiators were scheduled to visit Washington, D.C., to finalize a tentative trade deal that would lower New Delhi’s tariffs on exports to 18%, but the trip has now been postponed, sources told CNBC.

In South Korea, Trade, Industry and Resources Minister Kim Jong-kwan said the two countries would pursue friendly talks “so that the balance of interests and favorable export conditions secured by the Korea-U.S. Customs Agreement are not undermined.”

Japan has not issued a formal response, but officials told Nikkei Asia that the ruling will not affect Japan’s first wave of investment projects in the United States, and other officials said Tokyo is keen to maintain its trade deal with Washington.

The 15% tariff also appears to apply to countries like Singapore that have a trade deficit with the US.

According to the GTA, Singapore’s effective tariff rate is expected to rise by 1.1 percentage points. Despite its trade deficit, the city-state was subject to the world’s 10% reciprocal tariff.

A spokesperson for the country’s Ministry of Trade and Industry said Singapore was closely monitoring the situation and would “work with the US side to seek clarity on the implementation of the new Section 122 tariffs and the duty refund process.”

Overall, the word “chaos” seems to characterize the trade situation following the Supreme Court’s decision.

President Trump announced a 15% tax through Truth Social, but the White House fact sheet still lists the Section 122 tariff at 10%. “I just think there’s a lot of confusion going on right now,” says Sidor, of the Quincy Institute, bluntly.

Claudio Galimberti, chief economist at Rystad Energy, echoed his comments, writing that the actual impact on trade remained “uncertain”.

Galimberti also questioned bilateral trade agreements between the United States and its trading partners, saying the agreements negotiated were framed around IEEPA tariff rates.

“At this point, the United States appears to have lost the ability to enforce these rates, and the previously renegotiated rates resulting from IEEPA tariffs have now been replaced with a flat 10% rate under Section 122,” he said, adding that the component under Section 232 remains legally intact.

GTA’s Fritz highlighted a similar issue, saying it is not clear how product-level carve-outs for countries can be legally implemented.

For example, the EU agreement contained provisions regarding Portugal’s cork exports, but Article 122 requires them to apply on a non-discriminatory basis to all trading partners.

“(Trading partners) made concessions in exchange for certain tariff measures under IEEPA. The legal basis for that no longer exists. It remains to be seen whether the administration will be able to restructure these agreements under Section 301 or other authorities, but that will take time and new legal proceedings,” Fritz said.

—CNBC’s Amitoj Singh contributed to this report.