US President Donald Trump has announced a sweeping increase in baseline tariffs on imports from all countries to 15%, escalating global trade tensions just hours after a landmark Supreme Court ruling struck down his earlier use of emergency powers to impose across-the-board duties.
The move marks the latest twist in a high-stakes legal and economic battle that now threatens to reshape America’s trade policy, trigger massive refund claims estimated at up to $175 billion, and inject fresh uncertainty into global markets — including in key US partners such as Australia.
In a 6–3 decision, the Supreme Court of the United States ruled that Trump had exceeded his authority when he invoked the International Emergency Economic Powers Act (IEEPA) to implement sweeping “reciprocal tariffs” last year.
Writing for the majority, Chief Justice John Roberts stated that nothing in the 1977 statute authorized the president to unilaterally impose broad-based tariffs unrelated to a genuine national emergency as defined under the law.
The ruling effectively invalidates the legal foundation for the previous global tariff regime, sending shockwaves through Washington and international capitals alike.
Speaking shortly after the decision, Trump lashed out at the court. He called the Democratic-appointed justices who ruled against him a “disgrace to the nation” and said he felt “ashamed” of conservative justices who joined the majority. His remarks were punctuated by sharp criticisms and several factual inaccuracies, though he conceded that he had used emergency powers to “make things simple.”
“I have other options,” Trump said, acknowledging that alternative legal pathways exist but would require more time and procedural steps.
That statement may prove to be the most consequential part of his response.
Within hours of the ruling, the White House unveiled a revised global baseline tariff of 15%, up from the 10% rate that had been temporarily enacted using a separate statutory authority.
Unlike the emergency law struck down by the court, this provision — part of a different trade statute — appears to explicitly allow the president to impose tariffs of up to 15% for a limited period of 150 days. Notably, this authority has never been used in modern trade policy, leaving its practical scope untested.
The administration signaled that the five-month window would serve as a transitional period while officials explore more durable legal mechanisms to sustain higher tariffs beyond the 150-day cap.
Trump framed the move as restoring “great certainty” to American businesses and the global economy. But for many analysts, the opposite may be true.
Markets are now grappling with at least three layers of uncertainty: the short-term 15% tariff regime, the potential use of other trade statutes, and the looming question of refunds for previously collected duties.
During his remarks, Trump indicated his administration would investigate the possible use of Section 301 of the Trade Act of 1974 to reimpose tariffs in a more legally durable fashion.
Section 301 grants the president authority to impose tariffs on countries that violate US trade agreements or engage in practices deemed “unjustifiable,” “unreasonable,” or “discriminatory” that burden US commerce. However, unlike emergency powers, it requires a formal investigation, consultations with affected countries, and a detailed administrative process led by the US Trade Representative.
This authority was used in 2018 to impose tariffs on China following a lengthy investigation into intellectual property practices.
But replicating sweeping global tariffs under Section 301 would be far more complex. Each country or sector would require findings of wrongdoing, consultations, and procedural compliance. Legal experts suggest such an effort could take years — or demand enormous bureaucratic resources — to approach the scale of the original “Liberation Day” tariffs that Trump had championed.
Crucially, Section 301 mandates engagement with affected trading partners. That requirement alone could slow the administration’s ambitions and create diplomatic friction.
Another possible pathway lies in Section 232 of the Trade Expansion Act of 1962, which permits tariffs on specific imports deemed to threaten national security.
Trump used Section 232 during his first administration to impose tariffs on steel and aluminum in 2018. That action triggered widespread retaliation from trading partners and legal challenges at the World Trade Organization.
However, Section 232 is inherently sector-specific. It requires a formal investigation — typically conducted by the Commerce Department — into whether particular imports impair national security. It cannot easily justify across-the-board tariffs on all foreign goods.
Internationally, the steel and aluminum tariffs were challenged at the WTO, where a panel of experts ruled that the United States had improperly invoked a national security exception. Trump has repeatedly suggested he does not consider himself bound by international rulings, adding another layer of unpredictability.
Perhaps the most explosive consequence of Friday’s ruling involves money — a lot of it.
Because the Supreme Court declared that tariffs imposed under IEEPA were unlawful, all duties collected under that authority are now considered illegally gathered.
If fully refunded, total repayments could reach approximately $175 billion.
The court’s decision did not clarify how refunds should be processed. Trump called the ruling “terrible” and “defective” in part because it left the repayment mechanism unresolved. But legal analysts note that the Supreme Court typically leaves such procedural matters to lower courts.
Back in December, the United States Court of International Trade signaled it would have authority to order reliquidation and refunds if the high court struck down the tariffs.
That court is now poised to become the central battleground for companies seeking reimbursement.
Major corporations had already anticipated the possibility of this outcome. In November, retail giant Costco filed suit against the administration to secure full refunds should the tariffs be invalidated. The case was one of dozens filed by importers hoping to preserve their rights to repayment.
In December, facing a wave of similar lawsuits, the Court of International Trade temporarily paused related cases pending the Supreme Court’s ruling.
Now that the ruling has arrived, litigation is expected to surge.
Some importers argue that refunds should be straightforward because tariff payments were itemized and documented. But government lawyers may raise procedural defenses, including deadlines, standing, and administrative technicalities.
Trump himself suggested the issue could remain tied up in court “for the next five years.”
For trading partners such as Australia, the immediate impact is mixed.
Under the prior 10% baseline tariff, Australia had faced a lower rate than many other countries. With the shift to 15%, the relative advantage narrows, leveling the playing field — at least temporarily — for the next 150 days.
Australian exporters do not directly pay US tariffs; American importers do. However, US buyers may pressure foreign suppliers to absorb part of the cost, reducing profit margins and competitiveness.
The White House proclamation outlining the new tariff rate included notable exemptions. Beef, critical minerals, energy products, and pharmaceuticals were among the categories spared from the blanket increase — a move that may shield significant portions of Australia’s export profile.
Still, industries not covered by exemptions could face headwinds, particularly in agriculture, manufacturing inputs, and consumer goods.
Economists warn that if the 15% rate persists beyond the 150-day window — or is replaced with country-specific tariffs under Section 301 — supply chains could undergo another painful realignment similar to that seen during the earlier US-China trade war.
Beyond economics, the episode underscores a deeper institutional struggle between the executive branch and the judiciary.
The Supreme Court’s ruling reasserts limits on presidential authority in trade matters, emphasizing that emergency powers cannot be used as a substitute for congressional authorization.
At the same time, Trump’s rapid pivot to alternative statutes demonstrates the broad discretion presidents retain under existing trade laws.
Congress could intervene to clarify or restrict these authorities, but political divisions make legislative action uncertain.
For now, businesses, investors, and foreign governments must navigate a rapidly shifting landscape.
At Friday’s press conference, Trump declared that “great certainty” had been restored to the United States and the world.
In reality, uncertainty may be intensifying.
The 15% baseline tariff is temporary and legally untested. The Section 301 pathway is procedurally complex and diplomatically sensitive. The refund process could unleash years of litigation and massive fiscal exposure. And global trading partners are watching closely to see whether retaliatory measures or WTO disputes will follow.
For Australia and other US allies, the next five months will be crucial. Much depends on whether the administration uses the 150-day window to craft a narrower, legally sustainable tariff regime — or attempts to rebuild a sweeping trade barrier through more aggressive legal maneuvers.
One thing is clear: the Supreme Court has reshaped the battlefield, but it has not ended the war over Trump’s trade agenda.
As courts prepare for refund fights and trade officials weigh new investigations, the global economy remains on edge — bracing for the next chapter in a saga that has already upended billions of dollars in commerce and tested the boundaries of presidential power.
