Trump used another law to impose 15% global tariffs. What's different now?

The U.S. Supreme Court dealt a serious blow to President Donald Trump's economic agenda on Friday. A 6-3 majority ruled that the president had overstepped his authority when he imposed sweeping tariffs on foreign goods using the International Emergency Economic Powers Act last year.

Within hours of the decision, Trump pivoted, announcing a new 10% tariff, with some exemptions, under a different statute: Section 122 of the Trade Act of 1974. Then, over the weekend, he increased that rate to 15%.

The new tariff goes into effect Tuesday, Feb. 24. The tariff is temporary and will expire in late July, unless Congress votes to extend it.

Under Section 122, President Trump has some very specific tariff-imposing powers, said Erica York, vice president of federal policy at the Tax Foundation.

“The president can issue a proclamation without any investigation required to impose tariffs of up to 15%, and those can’t last more than 150 days, unless Congress approves them,” she said.

They don’t have to be justified by other countries’ alleged unfair trade practices, or to protect U.S. national security. The president just has to assert that the U.S. faces a balance of payments crisis.

“These are rate-limited, time-limited tariffs, not a really broad authority like what the President tried to do under IEEPA,” York said.

And they don’t vary from country to country, so the Trump administration can’t use them to punish certain trading partners.

But the new tariffs don’t cover everything we import, not by a long shot, said Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics.

“This uniform 15% already has some jagged edges,” he said.

Anything covered under the U.S.-Mexico-Canada trade agreement isn’t subject to the new tariff. Plus: “The president has exempted a lot of specific goods that will not be covered no matter where they come from, like pharmaceuticals, critical minerals,” Hufbauer said.

Food imports like beef, tomatoes, and oranges are also exempt. As are products already facing high tariffs to protect U.S. domestic producers, like steel, aluminum and motor vehicles.

In sum?

“For the next 150 days, the average effective tariff rate is going to be somewhere just under 13%. Then, after the alleged authority to impose these tariffs expire, it’ll be just under 7%,” said Joe Brusuelas, chief economist at consulting firm RSM.

The average was more than twice that high until the Supreme Court threw out President Trump’s IEEPA tariffs last Friday.