The U.K., European Union, and Singapore will experience increased trade-weighted tariffs, whereas nations like Brazil, China, and India will benefit from reduced tariffs following U.S. President Donald Trump’s announcement of a global duty hike to 15%.
This follows a 6-3 ruling from the U.S. Supreme Court stating that the president improperly invoked the International Emergency Economic Powers Act (IEEPA) for his tariff measures.
In response, Trump imposed a global 10% tariff under Section 122 of the 1974 Trade Act, which was subsequently increased to 15%.
On a trade-weighted basis, the U.K. experiences an average tariff rate increase of 2.1 percentage points, while the EU sees an uptick of 0.8 points, according to analysis from the trade watchdog Global Trade Alert based in Switzerland. Conversely, Brazil’s rate declines by 13.6 points, and China’s decreases by 7.1 points.
The European Commission stated it is seeking “full clarity” regarding the ruling, asserting that “a deal is a deal,” with no tariffs exceeding the previously agreed 15% cap. The 27-member bloc had finalized a trade agreement with the U.S. in August of last year capping exports to Washington at a 15% tariff.
Asian partners, Japan and South Korea, are facing trade-weighted average tariff rate increases of 0.4 and 0.6 percentage points, respectively. Both nations had negotiated a 15% tariff on their exports to the U.S. last year.
Tariff implications
While some analysts noted that the Supreme Court’s decision provides significant relief to countries previously affected by IEEPA-linked tariffs, others indicated to CNBC that it disadvantages those nations that secured trade agreements with the U.S. first.
Johannes Fritz, CEO of the St.Gallen Endowment for Prosperity through Trade and author of the GTA report, mentioned that countries such as China, Mexico, and Canada faced specific tariff directives linked to opioids and border security, in addition to the reciprocal rates from April 2025. Brazil and India also encountered separate IEEPA-specific orders.
“The Supreme Court nullified all of these, not just the reciprocal tariffs. Thus, countries facing the most significant IEEPA exposure received the most relief,” he stated to CNBC.
Fritz remarked that the EU and other partners, whose IEEPA impact was primarily confined to reciprocal rates, experienced a smaller reduction.
Nations that had negotiated a 10% “reciprocal rate,” like the U.K., along with those receiving the standard 10% rate such as Singapore, Australia, and Saudi Arabia, will observe an increase in their trade-weighted tariff rate, as the IEEPA tariffs are now substituted by Section 122 duties.
However, Sarang Shidore, director of the Global South Program at the Quincy Institute, expressed a contrasting perspective to CNBC “Inside India” stating that “the countries that were swift in striking agreements with the United States post the Liberation Day tariffs of last year have found themselves somewhat at a disadvantage.”
“In contrast, those countries that resisted, like Brazil, may feel somewhat validated,” he added.
Shidore’s stance was supported by Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “Nations suffering from higher tariffs that had not negotiated a significant reduction will gain more,” she told CNBC.
She highlighted Japan, which reduced its “reciprocal tariffs” to 15% in exchange for a $550 billion investment commitment to the U.S. last year.
“The government has confirmed that they will maintain their investment in the U.S. regardless of the Supreme Court ruling, meaning they are effectively paying for the same treatment as others,” Herrero said.
Reactions from Asian countries
Countries in Asia largely adopted a wait-and-see attitude towards the Supreme Court ruling and Section 122 tariffs.
China’s ministry of commerce stated on Monday that it is undertaking a “comprehensive evaluation” of the Supreme Court’s decision and called on the U.S. to “revoke its unilateral tariffs on trading partners.”
India’s trade representatives had intended to travel to Washington, D.C. to solidify an interim trade arrangement that would lower tariffs on New Delhi’s exports to 18%, but have postponed that visit, a source disclosed to CNBC.
In South Korea, Minister of Trade, Industry, and Resources Kim Jung-kwan stated that Seoul aims to engage in constructive dialogue “to ensure that the balance of benefits and favorable export terms established through the Korea-U.S. tariff agreement remain intact.”
Although Japan has refrained from making an official statement, officials conveyed to Nikkei Asia that the ruling would not impact Japan’s initial investment phases in the U.S., with others indicating Tokyo’s desire to maintain its trade agreement with Washington.
The 15% tariff is also set to affect countries like Singapore, which has a trade deficit with the U.S.
Singapore’s effective tariff rate is projected to rise by 1.1 percentage points, according to GTA. The city-state faced the global 10% “reciprocal tariff,” despite its trade deficit.
A representative from Singapore’s trade and industry ministry stated that the nation is closely monitoring the developments and will collaborate with its “U.S. counterparts to clarify the implementation of the new Section 122 tariffs and procedures for tariff refunds.”
Uncertainties ahead
Overall, the prevailing sentiment post-Supreme Court ruling characterizes the trade environment as one of confusion.
While Trump communicated the 15% tariff via Truth Social, the White House’s advisory still indicates the Section 122 tariffs at 10%. Quincy Institute’s Shidore succinctly remarked: “Currently, there’s a notable level of confusion.”
His sentiments were mirrored by Claudio Galimberti, chief economist at Rystad Energy, who asserted that the actual ramifications on trade remain “unclear.”
Galimberti also expressed skepticism regarding the bilateral trade pacts between the U.S. and its trading partners, suggesting that those agreements hinged on IEEPA tariff rates for reference.
“It seems that the U.S. has lost the capacity to uphold those rates currently, and any previous renegotiated rates born from IEEPA tariffs are being substituted by the uniform 10% rate under Section 122,” he remarked, noting that components under Section 232 remain legally effective.
Fritz of GTA underscored the same concern, emphasizing the ambiguity regarding how product-level exemptions for specific countries can be legally enforced.
For instance, the EU agreement included provisions for Portuguese cork exports, but Section 122 necessitates a non-discriminatory application across all trade partners.
“[Trade partners] made concessions expecting specific tariff treatments rooted in IEEPA. That legal foundation is no longer present. It remains to be seen whether the administration can reconstruct those agreements under Section 301 or other authorities, but such efforts will require time and new legal frameworks,” Fritz said.
— Report contributed by CNBC’s Amitoj Singh.
