Trump initiates 15% tariffs under Section 122

Summary

Following a Supreme Court ruling invalidating previous tariffs under IEEPA, President Trump immediately invoked Section 122 of the Trade Act of 1974 to implement a new 15% global tariff, up from the previous 10%. This ‘Plan B’ utilizes an obscure ‘balance of payments’ authority to bypass standard investigation periods, effectively overruling the judicial pushback.

Impact Analysis

Don’t get distracted by the Supreme Court ‘win’ on the old tariffs. Trump just pulled a bait-and-switch with Section 122, and actually escalated the rate to 15%. This is pure executive reflexivity—he’s using an obscure ‘balance of payments’ clause to bypass the regulatory checks the Court just tried to enforce.

The signal here is clear: the administration views trade barriers as non-negotiable and will burn political capital to keep them. With Q4 GDP already weak at 1.4%—well below the 2.5% expectation—slamming a 15% tax on imports is stagflationary fuel.Sina Finance The market is mispricing the legal risk; this isn’t over, it’s just entering a messier constitutional phase.

Trade-wise? Fade the ‘refund’ optimism—lawyers say that money is stuck for 18 months minimum.benzinga_article I’d be trimming exposure to consumer discretionary names that rely on rapid imports; they can’t pivot supply chains fast enough for this 15% hike. Look at domestic industrials or defensive plays; the volatility premium is back on the table.