Trump Imposes 10% Global Tariff in Bid to Salvage Trade Plans

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(Bloomberg) — President Donald Trump signed an executive order Friday imposing a 10% global tariff on foreign goods, moving quickly to preserve his trade agenda after the US Supreme Court struck down many of the levies he imposed last year.

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“It is my Great Honor to have just signed, from the Oval Office, a Global 10% Tariff on all Countries, which will be effective almost immediately. Thank you for your attention to this matter!” Trump wrote in a social media post on Friday evening.

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Text of the executive action wasn’t immediately available. 

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Trump previously said he was implementing the new baseline duty under Section 122 of the Trade Act of 1974, which grants the president unilateral ability to impose tariffs. But the untested legal provision puts a 150-day limit on how long the duties can remain in place. Congress would need to approve any extension. 

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The Supreme Court, in a 6-3 decision handed down earlier Friday, ruled that Trump’s use of a decades-old federal emergency-powers law to impose his so-called “reciprocal” tariffs was unlawful. Trump invoked the International Emergency Economic Powers Act last April to impose duties on dozens of US trading partners, ranging from 10% to 50%.

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The justices invalidated those tariffs along with duties on goods from Canada, Mexico and China that Trump imposed in the name of addressing fentanyl trafficking. The ruling also casts doubt on separate IEEPA tariffs placed on goods from Brazil and India. 

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Along with the flat 10% rate, Trump said he would keep in place existing import taxes under Section 301 and Section 232 and signaled plans to launch more trade investigations. 

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Earlier: Supreme Court Axes Tariffs; Trump Responds With New Rate

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Section 301 tariffs require country-specific probes that include hearings and an opportunity for input from affected companies or nations. Officials would need to conclude the country has violated a trade agreement or engaged in practices that burden US trade in order to impose the tariffs. 

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The Trump administration has previously used those measures to impose duties on Chinese exports, automobiles and metals. The president earlier on Friday suggested that those investigations could be carried out while the 10% baseline was in place, and eventually replace the flat rate — though he declined to rule out whether he might also seek an extension of the Section 122 levies. Trump said he was eyeing tariffs on foreign cars ranging from 15% to 30%.

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The president’s plan to impose a 10% global duty could lift the average US effective tariff rate to 16.5% from 13.6%, or lower it to 11.4% if current exemptions are maintained, Bloomberg Economics estimated.

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The decision, though, also raises fresh questions about revenue that already has been collected on tariffs. More than 1,500 companies had filed tariff lawsuits in trade court in preparation for the ruling, according to a Bloomberg analysis.