Countries that negotiated deals with US now disadvantaged compared to those that resisted
Confusion remains about implementation of new tariffs and existing bilateral agreements
📖 Full Retelling
U.S. President Donald Trump implemented a global 15% tariff after the Supreme Court ruled he wrongfully invoked the International Emergency Economic Powers Act for his trade levies, creating a divide where allies like the UK, EU and Singapore face higher duties while rivals such as Brazil, China and India receive tariff relief. The Swiss-based trade watchdog Global Trade Alert analysis shows that on a trade-weighted basis, the UK faces a 2.1 percentage point increase in its average tariff rate, while the EU sees a 0.8 point rise, with Asian allies Japan and South Korea facing increases of 0.4 and 0.6 percentage points respectively. In contrast, Brazil's rate plunges 13.6 points, and China's drops 7.1 points, reflecting how countries that resisted U.S. demands are now benefiting compared to those that negotiated trade deals. The EU Commission has requested 'full clarity' on the ruling, noting their previous agreement with the U.S. that capped tariffs at 15%, while confusion remains about how product-specific carve-outs in bilateral agreements can be legally implemented under the new Section 122 tariffs.
🏷️ Themes
Trade Policy, International Relations, Economic Impact
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.
In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed t...
The Supreme Court's ruling and subsequent tariff changes create significant shifts in U.S. trade policy, affecting global economic relationships and supply chains. This matters because it alters competitive advantages for major trading partners and creates legal uncertainty around existing trade agreements.
Context & Background
U.S. Supreme Court ruled 6-3 that President Trump wrongfully used IEEPA for tariffs
Trump imposed 15% global tariff using Section 122 of 1974 Trade Act
Countries like UK and EU face tariff increases while Brazil and China see reductions
Previous trade deals were negotiated with IEEPA tariffs as baseline
What Happens Next
Trading partners will seek clarity on implementation and potential refunds while assessing legal options. The U.S. administration may attempt to reconstruct bilateral deals under different legal authorities, which will require time and new processes.
Frequently Asked Questions
Why do some allies face higher tariffs while rivals get relief?
Countries previously hit with heavy IEEPA-linked tariffs get relief when those are struck down, while those with negotiated deals based on IEEPA rates now face higher Section 122 tariffs.
What is the current tariff rate under Section 122?
The tariff was raised to 15% globally under Section 122, though there is confusion as White House documents still reference 10%.
How are countries responding to these changes?
Many are taking wait-and-see approach, seeking clarity from U.S. counterparts, and assessing the impact on their existing trade agreements.
Original Source
The U.K., the European Union and Singapore face higher trade-weighted tariffs, while countries such as Brazil, China and India will see such levies go down after U.S. President Donald Trump said he would raise global duties to 15%. This comes after the U.S. Supreme Court decided in a 6-3 tariff ruling that the president wrongfully invoked the International Emergency Economic Powers Act to implement his levies. Trump later responded by imposing a global 10% duty under Section 122 of the 1974 Trade Act, which was then raised to 15% . On a trade-weighted basis, the U.K. faces a 2.1 percentage point increase in its average tariff rate, while the EU sees a 0.8 point rise, according to analysis from Swiss-based trade watchdog Global Trade Alert. In contrast, Brazil's rate plunges 13.6 points, and China's drops 7.1 points. The EU Commission said it would request "full clarity" on the ruling, noting that "a deal was a deal," with no increases in tariffs beyond the 15% ceiling previously agreed. The 27-member bloc had agreed a trade deal with the U.S. back in August last year that would see exports to Washington capped at a 15% tariff. Asian allies Japan and South Korea face an increase in their trade-weighted average tariff rate of 0.4 percentage points and 0.6 percentage points, respectively. Both countries had agreed to a 15% tariff on their exports to the U.S. last year. Tariff exposure While some experts said the Supreme Court's decision delivers the greatest relief to countries previously hit hardest by IEEPA-linked tariffs, others told CNBC it disadvantages nations that first negotiated trade deals with the U.S. Johannes Fritz, CEO of the St.Gallen Endowment for Prosperity through Trade and author of the GTA report, said countries like China, Mexico and Canada faced dedicated tariff orders tied to opioids and border security, on top of the reciprocal rates from April 2025. Brazil and India also faced their own separate IEEPA orders. "The Supreme Court struck down all ...
