Trump brings in new 10% tariff as Supreme Court rejects his global import taxes

The champagne corks popped for approximately four hours. That's how long businesses had to celebrate the US Supreme Court striking down Donald Trump's sweeping global tariffs before the president unveiled a replacement 10% levy that leaves British exporters in precisely the same bind they faced before justices ruled against him. The whiplash was immediate and deliberate.

Minutes after a 6-3 Supreme Court majority declared his use of emergency powers unconstitutional, Trump signed fresh orders invoking Section 122 of the Trade Act—a legislative relic never before deployed—to reimpose duties on goods from nearly every trading partner. For UK businesses that spent months navigating Trump's tariff labyrinth, the court victory has proven entirely pyrrhic.

What makes this particularly galling for British exporters is the timing. The UK recently concluded a trade agreement with Washington that reportedly required London to accept expanded US agricultural access and roll back digital services taxes. Those concessions remain in place whilst the promised tariff relief does not.

A White House official confirmed on Friday that countries with newly-minted trade deals, including Britain, will now face the 10% global rate whilst being expected to honour their commitments in full. The asymmetry could hardly be starker.

Britain delivered; Trump pocketed the wins and imposed tariffs anyway.

The Refund Mirage

Lawyers and state governors were quick to trumpet the Supreme Court's decision as a mandate for billions in refunds. Illinois Governor JB Pritzker dispatched an invoice to the White House demanding $9bn—roughly $1,700 per family in his state. California's Gavin Newsom crowed that Trump must "pay the piper" and return every dollar with interest.

The reality facing businesses is considerably bleaker. According to US government figures, Washington has already collected at least $130bn under the now-defunct legal authority. That sum represents enormous leverage for an administration openly hostile to refunding it.

Trump made his position unambiguous during Friday's White House remarks: expect protracted litigation. The Supreme Court majority opinion made no direct reference to the mechanics of reimbursement, punting that question back to the Court of International Trade. Justice Brett Kavanaugh, writing in dissent, called the situation a "mess"—an assessment few would dispute.

Diane Swonk, chief economist at KPMG US, warned that litigation costs alone could prove prohibitive for smaller firms. The calculus is brutal: spend perhaps tens of thousands pursuing a refund claim through years of court proceedings, or absorb the loss and move on. For many UK exporters, particularly mid-sized manufacturers, that's no choice at all.

Trump has effectively weaponised the judicial process itself, transforming an unconstitutional policy into a fait accompli for anyone lacking deep pockets and deeper patience.

A 150-Day Cliff Edge Approaches

The legal manoeuvre Trump selected comes with its own built-in crisis. Section 122 permits tariffs up to 15% for precisely 150 days, after which Congress must explicitly authorise their continuation. That puts the next cliff edge in late July—a tight timeline that virtually guarantees another round of brinkmanship.

Three scenarios present themselves. Congress could vote to extend the tariffs, though the legislative appetite for that remains unclear given the Supreme Court's forceful rejection of executive overreach. Trump could pivot yet again to alternative authorities, perhaps Section 232 or Section 301, which allow duties based on national security or unfair trade practices.

Or the administration could simply let the Section 122 tariffs lapse and immediately reimpose them under different justification—tariff whack-a-mole as governing strategy. The court left those provisions untouched, and Trump has wielded them before for sector-specific levies on steel, aluminium, and vehicles.

For British businesses, this perpetual uncertainty may prove more damaging than the tariffs themselves. Supply chains require predictability. Contracts get signed months in advance. Investment decisions hinge on stable cost structures.

Strategic Capitulation

The exemptions list in Trump's new proclamation offers cold comfort. Canada and Mexico retain broad carve-outs under the USMCA trade pact. Certain minerals, pharmaceuticals, electronics, and agricultural products receive unclear and potentially narrow exceptions.

The order's language is deliberately vague—"some agricultural products like oranges and beef"—leaving businesses to guess whether their specific goods qualify. Geoffrey Gertz, senior fellow at the Center for a New American Security, captured the moment precisely: "Things have only gotten more complicated and more messy today."

British firms now confront a choice between expensive outcomes. Pursue refunds through multi-year litigation with uncertain prospects, or accept the new 10% rate as the cost of accessing American consumers. Meanwhile, the concessions London granted to secure its trade deal remain fully enforceable.

The pattern suggests a deliberate strategy: exact maximum concessions during negotiations, then impose tariffs regardless using whichever legal authority hasn't yet been challenged. By the time courts catch up, billions have been collected and the next iteration is already in place. The message to future trading partners could hardly be clearer—deals with this White House aren't worth the paper they're printed on.

Come late July, UK exporters will learn whether Congress puts limits on this approach or whether Trump successfully pivots to his next justification. Either way, the Supreme Court's constitutional victory has delivered precisely zero practical relief to businesses still paying duties that six justices declared unlawful.