Donald Trump imposed a new temporary 10% global tariff this week, after the US Supreme Court ruled his previous broad-based duties as unlawful.
Trump announced the new tariff just hours after the Supreme Court’s ruling last Friday, using authority under Section 122 of the Trade Act of 1974, which allows the administration to impose the duty for 150 days and the levy came into effect on Tuesday.
The president had threatened to impose a higher 15% rate, though its unclear when this might be implemented.
Rob Burdett, head of multi manager at Nedgroup Investments, said: “The reality is that the overall tariff level is trending downwards and even after the new 10% global tariff, including all exemptions Bloomberg Economics analysis has calculated the average effective US tariff rate will settle at 10.2%, down from 13.6% before the Supreme Court ruling.
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“Even under a 15% global levy, the average tariff level would still be lower at 12% according to Bloomberg.”
Burdett said that this approach would create some winners and losers. He highlighted that the UK is one country that will pay higher tariffs under the new regime. Burdett said that several US trading partners are seeking clarification and will attempt to renegotiate their agreements.
“Furthermore, with the US mid-term elections approaching fast, Republican lawmakers will find that supporting what is essentially a tax on consumers might not be a voter friendly policy, raising the odds of any short-term tariffs lapsing without congressional approval,” he added.
Earlier this week, we asked Yahoo Finance UK readers if they were worried about Trump’s latest tariffs. We received 317 votes, with 40% of respondents saying that they were concerned, while 46% were not and 14% were undecided on the matter.
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