How will Trump’s new global tariffs work and what’s next? in World Economy News 23/02/2026 The US Supreme Court has ruled that President Donald Trump overstepped his powers when he imposed sweeping global tariffs last year. In its 6-3 decision, the court ruled that Trump could not use a 1977 law – the International Emergency Economic Powers Act (IEEPA) – to levy taxes on imports from nearly every country in the world. The ruling left open the possibility of consumers and businesses being given refunds for the estimated $130bn generated by the tariffs – a prospect that the high court did not weigh in on but is likely to end up in another court battle. Hours after the decision was released, Trump signed a proclamation using an alternative law, Section 122 of 1974’s Trade Act, that would let him put a new 10% temporary tariff on goods from all countries. On Saturday he posted on social media that he would be increasing these new tariffs to 15%. What tariffs were found unlawful and why? The Supreme Court decision released on 20 February relates only to tariffs that Trump had enacted under the IEEPA, which gives a president the power to regulate trade in response to an emergency. Trump first invoked it in February 2025 to tax goods from China, Mexico and Canada, saying fentanyl trafficking from those countries constituted an emergency. A few months later, on what Trump called “Liberation Day”, he took a much bigger step, imposing levies between 10% to 50% on goods from almost every country in the world. In this case, the US trade deficit – where the US imports more than it exports – posed an “extraordinary and unusual threat”, according to Trump. The court said the US Congress, and not the president, has the power to create new taxes, and that regulation under the IEEPA did not involve raising revenue. Still, a number of tariffs Trump has imposed over the last year were not part of the emergencies he declared under IEEPA and can remain regardless of the Supreme Court ruling. That includes industry-specific tariffs on steel, aluminium, lumber and automotives, which Trump put in place under a different US law, section 232 of the Trade Expansion Act of 1962, citing national-security concerns. Trump imposes new temporary tariffs under different law In the aftermath of the Supreme Court ruling on Friday, Trump issued a proclamation to impose a 10% global tariff on almost all imports to the US under a never-used law known as Section 122. On Saturday in a post on Truth Social, Trump said he would increase the global tariffs from 10% to 15%. Section 122 gives him the power to put in place tariffs of up to 15% for 150 days, at which point Congress must step in. However, there is a possibility Trump could work around lawmakers. Section 122 does not expressly prohibit the president from allowing the tariffs to lapse after 150 days and then declaring a new emergency to bring them back, according to the Cato Institute, a right-leaning think tank. Trump is using Section 122 “to address fundamental international payments problems” and rebalance American trade, according to the White House, while also investigating whether he can impose tariffs under Section 301 of the Trade Act of 1974. That law allows the US Trade Representative – a position currently held by Jamieson Greer – to investigate countries’ trade practices. The USTR can then impose tariffs when it finds practices are “discriminatory” or “unfair”. The administration can continue to impose tariff