On Tuesday, US President Donald Trump’s new global import tariff took effect at a 10% rate even though he had publicly signalled a higher charge. Official documents show the levy was set at 10% effective Tuesday with no immediate directive to raise it. A White House official told Reuters the administration is working to update the rate to 15% to reflect the president’s announcement, but offered no timetable. The BBC has contacted the White House for comment.
Key takeaways
- The tariff was enacted at 10% on Tuesday; there is no formal directive in the published documents to increase it immediately.
- A White House official told Reuters the administration is working to update the rate to 15%, but the effective date of any change is unconfirmed.
- The levy is being applied under Section 122 of the 1974 Trade Act, which permits a presidential tariff action for up to 150 days without new congressional approval.
- The US trade deficit widened to roughly $1.2 trillion in 2024, an increase of about 2.1% from the prior year—one of the administration’s stated motivations for tariffs.
- The US collected at least $130 billion in tariffs under the 1977 IEEPA authority previously; the Supreme Court recently ruled that use exceeded presidential authority, raising refund questions.
- Analysts warn the uncertainty raises the risk of retaliatory measures and a higher chance of a broader trade escalation than last year.
Background
The administration framed the tariff as a temporary measure to address “fundamental international payments problems” and to rebalance trade relationships for American workers, farmers and manufacturers. The executive order implementing the charge cites Section 122 of the 1974 Trade Act, a legal route that lets the president impose temporary import duties for up to 150 days without seeking fresh congressional consent.
The move follows a separate set of tariffs introduced last year under the 1977 International Emergency Economic Powers Act (IEEPA). The Supreme Court recently found that broad use of IEEPA to impose sweeping tariffs went beyond the president’s authority, a decision that created the prospect—though not a certainty—of large refunds to affected businesses. President Trump said the refund issue “will be fought in the courts for the next five years,” and Justice Brett Kavanaugh warned any refund process is likely to be a “mess.”
Main event
Federal records published on Tuesday list an across-the-board 10% import duty as the active rate; the documents include no immediate implementation plan to raise the duty. The White House has been asked to clarify the discrepancy between the documented 10% rate and President Trump’s prior public statements suggesting a higher charge would be applied.
A White House official told Reuters the administration is working to update the rate to 15% to reflect the president’s announcement, but the official did not specify when that update would take effect. Businesses and market observers said the discrepancy adds to an already uncertain environment for international trade planning.
Some companies that import from lower-cost countries said the lower-than-expected 10% duty offers short-term relief but does not remove long-term planning challenges. UK costume maker Morph Costumes and UK tea packer Birchall told reporters they were still holding contingency funds and tracking payments in case policy shifts again.
Internationally, reactions were swift. The EU said it would suspend ratification of a trade deal struck over the summer pending clarity. Britain’s Business and Trade Secretary Peter Kyle expressed confidence that the basic 10% understanding negotiated with the US remained in place but warned higher tariffs would be damaging to both economies. India said it would delay previously scheduled talks to finalise a recent agreement.
Analysis & implications
The immediate economic effect of setting the tariff at 10% rather than a higher rate is mixed. For some low-value, high-volume goods, a 10% duty meaningfully raises costs and can squeeze margins; for other products the impact is modest. However, the larger risk is not the headline rate on day one but the policy uncertainty the discrepancy creates for supply chains, investment decisions and contract pricing.
Legally, using Section 122 for a 150-day measure gives the executive branch a temporary tool but also sets a narrow window for policy-makers and traders to respond. The Supreme Court’s recent restriction on IEEPA use complicates the overall legal architecture: businesses seeking refunds for previously paid IEEPA-based tariffs face a contested path, and courts may be asked to resolve layers of administrative and statutory questions.
Politically, the mismatch between announced intent and published rate raises negotiation challenges with trade partners. The EU’s decision to suspend ratification of its deal and the UK and India’s cautious responses show partners are closely watching US credibility on trade commitments. If tariffs escalate or are applied unpredictably, retaliation or reciprocal measures could follow, increasing the odds of a broader trade confrontation.
Comparison & data
| Measure | Figure |
|---|---|
| Enacted global tariff (effective Tuesday) | 10% |
| White House stated target (work in progress) | 15% (unconfirmed timing) |
| US trade deficit (2024) | ~$1.2 trillion (up 2.1% vs 2023) |
| Tariffs collected under IEEPA (to date) | At least $130 billion |
| Section 122 authority | Up to 150 days without new congressional approval |
The table places the enacted rate beside the administration’s stated target and key contextual figures: the large trade deficit that partly motivates the policy, prior tariff receipts under IEEPA, and the statutory time limit in Section 122. These figures illustrate why firms and trading partners are watching both the legal basis and the potential for policy change.
Reactions & quotes
Market analysts and business leaders described the situation as adding to operational uncertainty and raising the risk of retaliation.
“I think it simply adds to the chaos and mess,”
Carsten Brzeski, ING analyst
Brzeski said the rapid policy shifts bring the US back to the same uncertainty seen last year, increasing the likelihood of reciprocal measures from trading partners.
“The fact that we’re at 10% rather than 20% is better than it was, but will it stay that way?”
Fraser Smeaton, CEO, Morph Costumes
Smeaton, whose company imports from China and exports to the US, said he has kept funds in reserve to cover potential tariff changes and is pursuing refunds for unlawful IEEPA charges.
“It was the best deal and it remains the best deal,”
Peter Kyle, UK Business and Trade Secretary
Kyle told a parliamentary committee he believed the 10% framework negotiated with the US remains intact for the UK, while urging continued engagement toward a fuller trade agreement.
Unconfirmed
- The exact date when the administration will, if at all, publish an updated 15% tariff rate remains unconfirmed.
- Whether companies will receive refunds for tariffs collected under IEEPA—and on what timetable—is unresolved and likely to be litigated.
- The scale and timing of any retaliatory measures by trading partners in response to changes in tariff policy are not yet verified.
Bottom line
The immediate headline is simple: a global tariff is in effect at 10% today, while the White House says it aims to align published rates with the president’s statements by updating to 15% at some point. The deeper story is policy uncertainty—legal questions about prior IEEPA-based tariffs, the temporary nature of Section 122 actions, and the diplomatic fallout with major trading partners.
For businesses, the practical priorities are tracking payments, preserving evidence for potential refund claims, and reassessing supply-chain contracts and pricing. For policymakers and markets, the next key signals will be (1) formal publication of any rate change, (2) legal outcomes on refunds and authority, and (3) concrete responses from the EU, UK, India and other trade partners.
Sources
- BBC News (news/press) — original coverage of the tariff action and business reactions.
- Reuters (news/press) — reporting cited for the White House official’s comment on updating the rate to 15%.
- The White House (official) — executive orders and briefing-room releases on trade policy and tariff actions.