Global trade has once again been thrown into uncertainty after President Donald Trump announced a fresh 15 per cent tariff on goods imported into the United States — just days after the Supreme Court (SC) of the United States struck down many of his earlier tariff measures. This announcement was made in exercise of the provisions of Sec 122 of the 1974 Trade Act, which allows for a maximum 15 per cent tariff, but only for 150 days.
In a 6–3 ruling delivered on February 20, 2026, the Court held that the President had exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose sweeping duties.
The judgment was viewed as a major setback for the US administration and a victory for businesses and US states that had challenged the tariffs. It potentially opens the door to significant refund claims, although the legal and administrative process may be complex.
Trump’s tariff saga continues despite the SC setback. He reiterates America-first priority. Trump views tariffs as a means to correct imbalances. The newly proposed 15 per cent tariff would remain in force for 150 days, with any extension requiring approval of Congress.
Trump has indicated that he does not consider such approval necessary. However, the Presidential orders are yet to be signed.
The higher tariffs, whether uniform or sectoral, are paid by US importers, not by the foreign exporters.
In effect the additional costs are typically passed on to American consumers in the form of higher prices, raising inflationary concerns at a delicate economic moment.
More significant than the uniform levy is the renewed emphasis on Sectoral Tariffs. The US has imposed steep duties on specific industries.
For instance, the solar cells and modules from India face a 126 per cent tariff; steel and aluminium imports attract duties ranging from 25 to 50 per cent; automobiles and auto parts are subject to 25 per cent tariffs; and copper imports face a 50 per cent levy. Even before formal orders are signed, these announcements have unsettled markets.
Sectoral tariffs carry broader global implications. Emerging market economies, heavily reliant on exports, could face reduced access to the US market.
Trade diversion may intensify competition in alternative destinations, while global supply chains — particularly in manufacturing, technology and renewable energy. The uncertainty itself is very damaging to the business community, making planning production cycles, pricing strategies and long-term contracts amidst shifting policy signals.
Again, the proposed 15 per cent tariff would have uneven consequences across countries. There are opportunities and challenges for the Emerging Market (EM) economies of the world. For nations such as India, Brazil and China — which had previously faced higher levies — the uniform rate could represent a relative improvement.
Although still burdensome, it narrows the competitive gap and may be viewed as a partial reprieve. Undoubtedly, China continues to stand in a very favourable position in many sectors when compared to others.
On the other hand, countries that had benefited from a lower tariffs, including Australia, South Korea, Switzerland, and the United Kingdom, would see their position bit disadvantage. The European Union has sought clarification on how the new tariffs would be applied, amidst growing frustration among member states.
European officials have not ruled out retaliatory measures if the levies are implemented. Meanwhile, countries such as Japan, which had previously operated under a 15 per cent tariff while competitors enjoyed lower rates, would stand to gain.
Ultimately, the sectoral tariffs and an increasingly unpredictable trade and tariff policy of the US are emerging as a major hurdle to global economic stability and growth. Frequent shifts in these undermine exporters’ confidence, disrupt the supply chain and delay investment decisions across the globe.
R Madhusoodanan
The writer is the Executive Advisor to the Board, Global Money Exchange, Muscat.
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