New tariffs, new uncertainty in World Economy News 25/02/2026 It took only a few hours after the US Supreme Court had ruled against the US administration’s emergency tariffs from ‘Liberation Day’ (here is our original reaction piece), before President Donald Trump announced a new round of tariffs. As expected, the US administration is invoking Section 122 of the 1974 Trade Act, which allows tariffs of up to 15% for as long as 150 days to quickly address “international payment problems”. The tariffs would expire after 150 days unless Congress extends them. However, the President could, in theory, allow the surcharge to expire, declare a new emergency, and restart the 150-day period. This would create a de facto perpetual tariff instrument. While the official White House communication stated that the tariff would be 10% as of 24 February, Trump a day later said that he would put the tariff at 15%. To be clear, these tariffs were not subject to the Supreme Court’s ruling. However, the use of Section 122 could bring new legal problems for Trump. In fact, Section 122 goes back to the era of the gold standard and fixed exchange rates. It’s a trade instrument that has never been used in practice, as the fixed exchange rate regime had come to an end when the 1974 Trade Act was finally approved. It won’t be easy to argue that the US currently has a balance of payment crisis as, by definition, the balance of payments is always in balance. New tariffs are only smoke and mirrors for other options Given that the latest tariffs can also be legally challenged, they might just be a measure to buy some time for another tariff option: Section 301 of the 1974 law. This Section 301 addresses unfair trade practices or violations of trade agreements but requires more thorough investigations. How do the new tariffs relate to existing tariffs? The new tariffs will not come on top of the already existing sectoral tariffs (Section 232), which are currently applied on steel, aluminium, copper, lumber, automobiles and certain motor vehicles. Also, articles entering duty-free under the United States-Mexico-Canada Agreement (USMCA) remain exempt from the surcharge. Finally, parts and components used in civil aircraft are exempted from the new tariffs. What will happen to the bilateral ‘deals’? Following the ‘Liberation Day’ announcements and threats, several countries negotiated and agreed to trade deals with the US administration. Although these deals were prompted by the now-revoked emergency tariffs, they are bilateral arrangements and therefore not directly affected by the Supreme Court ruling. However, some deals – such as those with Switzerland or India – made explicit reference to the emergency tariffs, as the new tariff rates were framed as reductions from those emergency levels. As the legal reference tariff rate has now disappeared, these deals might have to be redrafted. In the case of the US-EU trade deal, things are even more complicated. The European Parliament suspended approval of the EU’s commitments under the agreement when the Greenland conflict escalated. It now remains unclear whether the Parliament will push for a full renegotiation of the deal. That said, the US administration would likely rely on sectoral tariffs and Section 301 measures to pressure the EU to return to the negotiating table. US macro outlook stays unchanged The realised rate of tariffs, calculated as US customs duty revenues divided by the value of goods imported into the US,