After facing a setback at the U.S. Supreme Court, President Donald Trump has announced an increase in the global tariff rate from 10 percent to 15 percent. However, products compliant with the Canada-United States-Mexico Agreement (CUSMA) remain exempt from these tariffs.
The initial tariffs imposed by Trump under the International Emergency Economic Powers Act (IEEPA) were struck down by the Supreme Court. In response, the president utilized Section 122 of the U.S. Trade Act to implement the new global tariff. Trump stated on social media that the decision to raise the tariff came after a comprehensive review of the court ruling.
The temporary tariffs permitted under Section 122 can reach up to 15 percent and are subject to a maximum duration of 150 days unless Congress approves an extension. While the latest tariff adjustment is not expected to significantly impact Canada due to CUSMA exemptions, specific sectoral tariffs on Canadian goods, including steel, aluminum, and automotive parts, remain in effect.
The use of Section 232 tariffs, which allows for investigations into potential national security threats from imports, was not addressed in the recent court ruling. U.S. Treasury Secretary Scott Bessent suggested that the new global tariff increase may serve as a temporary measure while further assessments on Section 232 and Section 301 tariffs are conducted.
Looking ahead, discussions are ongoing regarding the future of the 232 and 301 tariffs, with expectations of potential adjustments in the coming months. Despite the tariff changes, Canada and Mexico continue to benefit from exemptions under the CUSMA agreement.
