US: New 15% global tariff reshapes landscape – Commerzbank
Commerzbank’s Economic Research team, led by Dr. Vincent Stamer, outlines how US trade policy is shifting after the Supreme Court ruling on earlier Trump tariffs. The new 15% global tariff is based on Section 122 of the Trade Act of 1974, interacts with MFN duties and sectoral tariffs.
Section 122, MFN base and sectoral carve-outs
"Donald Trump is invoking Section 122 of the Trade Act of 1974. This allows the president to impose additional tariffs of up to 15% for a period of up to 150 days in the event of an existing trade deficit. The additional duty may therefore not exceed 15%."
"The US government has not provided a definitive written answer to this key question. In his press conference, however, Trump emphasized that the new duty rate would be added to existing duties. And the legal text does indeed stipulate that the additional duty supplements existing import duties."
"For most industrial goods, this tariff was only 1-3%, and in many cases it was even zero. However, tariffs of over 15% already existed on some products, such as alcohol, food, furniture, and clothing. So while most products would only face a tariff of 15% to 18%, this could exceed 30% for certain goods."
"The global tariff rate will explicitly not be applied to goods that are already subject to a sectoral tariff (Trade Expansion Act of 1962: Section 232). This means that the tariffs on steel and aluminum (50%) would remain in place in any case. The situation is more complicated for cars and car parts: cars and car parts are also subject to a sectoral tariff of 25%, but the “Turnberry deal” provides for a tariff of 15%."
"Strictly speaking, the Supreme Court has also undermined the basis of the Turnberry Agreement between the EU and the US. However, at least for the next 150 days, the agreement could continue de facto, limiting tariffs on most goods from the EU to 15%. This means that the new global tariff of 15% plus the product-specific MFN tariff would not have to be paid."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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