Some U.S. allies see higher duties under new tariffs, rivals see relief, trade body says
Portuguese cargo ship MSC Maxine is seen at Balboa Port at the entrance to the Panama Canal in Panama City on April 23, 2025. The Port of Balboa is managed by Hong Kong-based CK Hutchison Holdings.
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The UK, the European Union and Singapore face higher trade-weighted tariffs, while countries such as Brazil, China and India will see such tariffs fall after US President Donald Trump said he would raise global tariffs to 15%.
This comes after the U.S. Supreme Court ruled in a 6-to-3 tariff decision that the president unfairly invoked the International Emergency Economic Powers Act (IEEPA) to impose his own tariffs.
Trump then responded by imposing a 10% global tax under Section 122 of the Trade Act of 1974, which was later increased to 15%.
On a trade-weighted basis, the UK faces a 2.1 percentage point increase in the average tariff rate, while the EU sees a 0.8 percentage point increase. according to analysis From Switzerland-based trade watchdog Global Trade Alert. In contrast, Brazil’s rate fell by 13.6 points and China’s by 7.1 points.
The EU Commission said would demand He said there was “complete clarity” in the decision and that “an agreement is an agreement”, stating that there was no increase in tariffs beyond the previously agreed 15 percent ceiling. In the 27-member bloc signed a trade agreement It was expected that US exports to Washington would be limited by a 15 percent customs duty in August last year.
Asian allies Japan and South Korea face a 0.4 percentage point and 0.6 percentage point increase in their trade-weighted average tariff rates, respectively. Both countries agreed last year to impose a 15 percent tariff on their exports to the United States.
Tariff exposure
While some experts say the Supreme Court’s decision provides the biggest relief to countries previously hit hardest by IEEPA-related tariffs, others told CNBC it disadvantages countries negotiating trade deals with the United States for the first time.
Johannes Fritz, CEO of the St.Gallen Endowment for Prosperity through Trade and author of the GTA report, said countries such as China, Mexico and Canada face reciprocal rates as well as special tariff orders tied to opioids and border security from April 2025. Brazil and India also faced their own separate IEEPA orders.
“The Supreme Court struck down all of these, not just the reciprocal tariffs. So the countries most exposed to IEEPA got the greatest relief,” he told CNBC.
The EU and other allies, whose IEEPA burden is largely limited to reciprocal rates, have seen a smaller reduction, Fritz noted.
Countries that negotiate a 10 percent “reciprocal rate,” such as the United Kingdom, and countries that receive the base 10 percent rate, such as Singapore, Australia, and Saudi Arabia, will see trade-weighted tariff rates increase as IEEPA tariffs are now replaced by Section 122 duties.
But Sarang Shidore, director of the Quincy Institute’s Global South Program, had a different view, telling CNBC “In India,” “countries that reached an agreement with the United States early after last year’s Independence Day tariffs have sort of been left holding the bag.”
“Whereas other countries like Brazil and others that have resisted accepting any U.S. demands may feel a little more justified,” he added.
Shidore’s view was echoed by Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “Countries that are suffering from higher tariffs and have not negotiated a large reduction will benefit more,” he told CNBC.
He stated that Japan had reduced “reciprocal tariffs” to 15 percent in return. 550 billion dollar investment promise It entered the US last year.
“The government has confirmed that they will continue their investments in the United States despite the Supreme Court decision. In other words, they are paying to be treated the same as everyone else,” Herrero said.
Asian countries react
In Asia, countries have mostly taken a wait-and-see approach regarding the Supreme Court decision and Section 122 tariffs.
of china Ministry of Commerce In a statement on Monday, he said he was conducting a “thorough evaluation” of the Supreme Court decision and also called on the United States to “rescind the unilateral tariffs it has imposed on its trading partners.”
India’s trade negotiators had planned to visit Washington DC to cement an interim trade deal that would see duties on New Delhi’s exports reduced to 18%, but have now postponed the trip, a source told CNBC.
In South Korea, Kim Jung-kwan, the country’s Minister of Trade, Industry and Resources, said Seoul would continue friendly consultations “to ensure that the balance of benefits and favorable export conditions guaranteed by the Korea-US tariff agreement are not damaged.”
Although Japan did not give an official response, officials told Nikkei Asia While he stated that the decision would not affect Japan’s first round of investment projects in the United States, other officials also said that Tokyo was willing to preserve the trade agreement with Washington.
15% tariff also seems valid Countries like Singapore, which has a trade deficit with the USA
Singapore will see its effective tariff rate increase by 1.1 percentage points, according to the GTA. The city-state had been hit with a global 10% “reciprocal tariff” despite its trade deficit.
A spokesman for the country’s ministry of commerce and industry said Singapore was monitoring the situation closely and would “engage with US counterparts to provide clarity on the implementation of the new Section 122 tariffs and tariff refund processes.”
Confusion ahead
Overall, one word seems to characterize the trading environment after the Supreme Court decision: confusion.
While Trump announced this 15% tax via Truth SocialWhite House memo still includes Section 122 tariffs 10%. Quincy Institute’s Shidore puts it plainly: “I think there’s a lot of confusion right now.”
Claudio Galimberti, chief economist at Rystad Energy, echoed his comments and wrote that the actual impact on trade remained “unclear.”
Galimberti also cast doubt on bilateral trade agreements between the United States and its trading partners, saying the negotiated agreements were primarily structured around IEEPA tariff rates.
“Currently, it appears that the United States has lost the ability to impose these rates, and the previously renegotiated rates resulting from the IEEPA tariffs are now being replaced by the uniform 10% rate under Part 122,” he said, adding that components under Part 232 remain legally intact.
GTA’s Fritz also highlighted the same issue, saying it was not clear how product-level distinctions could be legally enforced for individual countries.
For example, the EU agreement included provisions on Portuguese mushroom exports, but Section 122 requires non-discriminatory application across all trading partners.
“[Trading partners] It made concessions in exchange for specific tariff application based on IEEPA. This legal basis no longer exists. “Whether the administration can restructure these agreements under Section 301 or other authorities remains to be seen, but that will take time and new legal processes,” Fritz said.
— CNBC’s Amitoj Singh contributed to this report.
