Trump Hikes Global Tariffs to 15 Percent After Supreme Court Defeat

Markets React to Tariff Escalation

European stocks started the week in negative territory as global markets react to U.S. President Donald Trump's latest global tariffs policy. The pan-European Stoxx 600 provisionally closed nearly 0.5% lower with most major bourses in negative territory. The Dow Jones Industrial Average dropped roughly 390 points, or 0.8%, while the S&P 500 declined 0.4% and the Nasdaq Composite slipped 0.5%.

The dollar declined against foreign currencies, stocks in Asia and Europe broadly sold off, and S&P 500 futures were down 0.22% before the open in New York as investors began to realize that the fallout from the U.S. Supreme Court's tariff decision, and President Donald Trump's reaction to it, is going to be more complex than traders initially thought. Gold prices climbed more than 1% in spot trading as investors moved toward safe-haven assets, and gold futures rose around 2%.

Supreme Court Ruling Triggers New Trade Policy

European markets had ended last week higher after the U.S. Supreme Court ruled against a sizeable chunk of Trump's "reciprocal" tariffs, but the president said over the weekend that he would now introduce a new, blanket 15% global levy, up from 10%. The new tariffs would be "effective immediately," Trump said in a Truth Social post. He also warned Saturday that additional levies would follow.

Mr. Trump is now turning to Section 122 of the Trade Act of 1974 to implement his next round of global tariffs, which are scheduled to take effect starting Feb. 24. Section 122 of the 1974 Trade Act is valid only for the next 150 days and must then be extended by Congress. Trump continued to assert his ability to increase tariffs on Monday, warning of higher duties for countries that want to "play games" after the Supreme Court struck down his "reciprocal" tariffs last week.

European Trade Deal in Jeopardy

Europe warned Monday that its hard-fought trade deal with Washington could now be in jeopardy after President Donald Trump unveiled a sweeping 15% tariff on all imports over the weekend, prompting the European Parliament to postpone a planned vote on the agreement, according to Reuters. European officials expressed concern over Trump's new tariffs, signaling that it could pose a threat to its trade deals with the U.S. Later, the European Parliament announced Monday that it has paused work on ratifying the U.S.-EU trade deal agreed last summer.

The Commission argued that Trump's blanket 15% tariff effectively erases the competitive advantage the EU had secured under that deal, since countries without any agreement now face the same rate. On a trade-weighted basis, the U.K. faces a 2.1 percentage point increase in its average tariff rate, while the EU sees a 0.8 point rise, according to analysis from Swiss-based trade watchdog Global Trade Alert.

Uncertain Path Forward

Market watchers described the ongoing tariff uncertainty as likely to remain a disruptive theme through the rest of 2026, even if the initial shock of last spring is not repeated. "The administration will quickly pivot to different legal grounds for replacement tariffs while deficits go higher in the interim," he says. "Any boost to the economy from lowering tariffs in the near term is likely to be partly offset by a prolonged period of uncertainty, and with the administration likely to rebuild tariffs through other, more durable means, the overall tariffs rate may yet settle close to current levels," wrote Oxford Economics chief US economist Michael Pearce in a Friday note.

Section 301 tariffs "have no upper limit, have proved to be highly sticky once implemented (as with those imposed on China in 2018), and could, in theory, be applied to any country that does not agree to a trade agreement with the U.S. that embeds higher tariffs," Bratton wrote. The administration's shifting legal strategies suggest this trade turbulence will persist as Trump explores various mechanisms to maintain his protectionist agenda despite judicial setbacks.