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Trump tariff chaos: What does 15% levy mean for trade deals the US signed?

Trump tariff chaos: What does 15% levy mean for trade deals the US signed?

The United States Supreme Court’s ruling, which declared Donald Trump’s sweeping tariffs unlawful, has injected uncertainty into global trade yet again, as the US president imposed a new 15 percent tariff on Saturday. Weeks after his inauguration in January 2025, Trump imposed tariffs against foes and allies using the International Emergency Economic Powers Act (IEEPA), unleashing a trade war that rattled global trade. Recommended Stories list of 3 itemsend of list But on Friday, in a 6-3 decision, the top court agreed that Trump exceeded his authority by invoking the 1977 law, which was designed to allow US presidents to respond to specific national emergencies. The court said tariffs are a form of taxation, and under Article I of the Constitution, the power to tax belongs exclusively to Congress. The court’s ruling, however, does not apply to Trump’s tariffs on steel, aluminium, lumber and automotives since these were imposed under a different law – Section 232 of the Trade Expansion Act of 1962. Following the verdict, a furious Trump called the Supreme Court judges “fools and lapdogs” who are “very unpatriotic and disloyal to our Constitution”. He immediately signed an executive order under Section 122 of the US Trade Act of 1974 to impose a blanket 10 percent tariff on all countries the US trades with, starting on February 24. On Saturday, he raised the tariff to 15 percent, the highest rate allowed under this trade law. So, what is this new trade law that Trump has used to impose tariffs? What does this mean for trade deals the US has already signed with countries around the world? Advertisement Here’s what we know: What is the new trade law Trump is using? Under US law, Section 122 of the US Trade Act of 1974 empowers the president to impose tariffs of up to 15 percent to address “large and serious balance-of-payments deficits”. Tariffs can be imposed under this law only for 150 days unless the US Congress agrees to extend it. Trump is the first president to use this law to impose tariffs. In a statement on Friday, the White House said some goods, such as certain agricultural products like beef, tomatoes, natural resources and fertilisers that cannot be grown or produced in the US, aerospace products, among others, will not be subject to the temporary levy. Shantanu Singh, an international trade lawyer, noted that since this is the first time this legal authority has been used by any US president, it could likely be litigated. “But the government has considerable leeway to determine this as trade deficits can form part of balance-of-payments deficits,” he told Al Jazeera. Trump has justified the tariffs as a way to balance the US’s trade deficits of more than $900bn. What happens to the trade deals? Several countries had signed trade deals to cushion themselves from Trump’s punishing tariffs last year. The United Kingdom, India and the European Union, among others, had entered into deals to lower tariffs on their exports to the US. But the ongoing tariff spectacle has thrown the future of those trade deals into doubt. Will they be charged the new 15 percent tariff or the agreed rate signed in the trade deals? Will India be tariffed at 18 percent, as per the trade deal, or 15 percent as announced by Trump on Saturday? Speaking to reporters on Friday, Trump said some of these trade agreements will stand. “The trade deals, because they are international, will likely remain in place,” Singh, the international trade lawyer, said. However, after the Supreme Court’s ruling, he said, the big incentive for doing trade deals with the Trump administration, which was to get a lower reciprocal tariff rate before competitors, has vanished. “That reduces the incentive for trade partners to comply with their part of the deal for the time being,” he said. Here is a look at some of the trade agreements and what their future looks like. United Kingdom The UK was one of the first to sign a trade deal with the US last May after being hit by 5 percent tariffs on steel and aluminium exports, as well as a 25 percent tariff on cars and auto parts. Under their agreement, the US agreed that there would be zero tariffs on steel and aluminium imports from the UK, and for other goods, it was set at 10 percent. Last December, the two nations also agreed to zero tariffs on pharmaceuticals and medical products. Advertisement After Friday’s Supreme Court ruling, William Bain, head of trade policy at the British Chamber of Commerce, said in a statement that the ruling does “little to clear the murky waters for business”. On Friday, a spokesperson told the media that the British government was “working with the US” to understand more about how the court’s ruling will affect the UK. The court ruling will not impact the UK’s deal on steel, aluminium and pharmaceutical exports. But Bain said the new 15 percent global tariff rate, which has been imposed under Section 122 of the Trade Act 1974, “will be bad for trade, bad for US consumers and businesses and weaken global economic growth”. China Trump had imposed one of the highest tariffs on China, and the world’s two largest economies were engaged in a trade war. At one point, they had slapped reciprocal tariffs exceeding 100 percent on some goods. The two countries have yet to sign a trade deal, but they agreed to lower the tariffs as part of a trade truce. After several rounds of trade talks and a summit between Trump and Chinese President Xi Jinping in South Korea in October, the two countries agreed to a one-year truce with a 10 percent baseline tariff. Trump also slashed the so-called fentanyl tariff to 10 percent. The Supreme Court ruling will lift tariffs imposed on chemicals used in fentanyl. However, tariffs on other Chinese exports, such as electric vehicles, aluminium and steel, will remain. Following the court’s ruling, Chinese Embassy spokesperson in

LIVE: Tottenham Hotspur vs Arsenal – Premier League

LIVE: Tottenham Hotspur vs Arsenal – Premier League

blinking-dotLive MatchLive Match, Follow the build-up, analysis and live text commentary of the game as Spurs host Arsenal for a crucial North London derby. Published On 22 Feb 202622 Feb 2026 Click here to share on social media share2 Share Adblock test (Why?)

Iran-US tensions: What would blocking Strait of Hormuz mean for oil, LNG?

Iran-US tensions: What would blocking Strait of Hormuz mean for oil, LNG?

Whenever tensions rise between Iran and the United States, one narrow waterway moves to the centre of global attention – the Strait of Hormuz. The world’s largest warship, the nuclear-powered aircraft carrier USS Gerald R Ford, is heading to the Gulf, joining one of the largest US military build-ups in the region since the 2003 invasion of Iraq. This time, Iran is in Washington’s crosshairs. Recommended Stories list of 3 itemsend of list This month, Tehran signalled how it might respond to an attack when it announced the temporary closure of sections of the Strait of Hormuz, the narrow gateway linking the Gulf to open seas. Iranian authorities carried out live-fire military drills in the corridor, through which about 20 percent of global oil supplies are shipped. The move marked a rare suspension of activity in parts of the strait. It served as a pointed warning about the economic consequences if Washington proceeds with its threats to strike Iran, highlighting how quickly a regional confrontation could spill into global markets. Where is the Strait of Hormuz? The Strait of Hormuz is the world’s most critical oil chokepoint. The curved waterway lies between Iran to the north and Oman and the United Arab Emirates to the south. It is roughly 50km (31 miles) wide at its entrance and exit and narrows to about 33km (20 miles) at its tightest point. It forms the only maritime link between the Gulf and the Arabian Sea. Despite its narrow width, the channel accommodates the world’s largest crude carriers. Major Middle Eastern oil and gas exporters rely on it to move supplies to international markets while importing nations depend on its uninterrupted operation. How much oil and gas pass through the strait? According to the US Energy Information Administration (EIA), about 20 million barrels of oil transited through the Strait of Hormuz each day in 2024. That equates to nearly $500bn in annual energy trade, underlining the waterway’s central role in the global economy. Advertisement The crude passing through the strait originates from Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE. Any prolonged disruption would rattle producers and the economies that depend on their exports. The strait also plays a critical role in the liquefied natural gas (LNG) trade. In 2024, roughly a fifth of global LNG shipments moved through the corridor with Qatar accounting for the vast majority of those volumes, according to EIA data. Where does it all go? The strait handles LNG flows in both directions. Kuwait and the UAE import supplies sourced outside the Gulf, including shipments from the US and West Africa. The EIA estimated that in 2024, 84 percent of crude oil and condensate shipments transiting the strait headed to Asian markets. A similar pattern appears in the gas trade with 83 percent of LNG volumes moving through the Strait of Hormuz destined for Asia. China, India, Japan and South Korea accounted for a combined 69 percent intake of all crude oil and condensate flows through the strait last year. Their factories, transport networks and power grids depend on uninterrupted Gulf energy. A rocket is fired during a military exercise by Iran’s Islamic Revolutionary Guard Corps and navy in the Strait of Hormuz on February 17, 2026 [Handout/SepahNews via AFP] What are Iran’s options? Under international law, states may exercise sovereignty up to 12 nautical miles (22km) from their coastlines. At its narrowest stretch, the Strait of Hormuz and its designated shipping lanes fall entirely within the territorial waters of Iran and Oman. That legal reality gives Tehran geographic leverage. About 3,000 vessels transit the strait each month. If Iran tried to obstruct traffic, one of the most effective tactics would involve deploying naval mines using fast attack boats and submarines. Tehran’s fleet includes fast boats equipped with antiship missiles, alongside surface vessels, semisubmersible craft and submarines designed for asymmetric warfare. Iran’s parliament last year approved a motion to close the Strait of Hormuz. Any final decision rests with Supreme Leader Ali Khamenei. Regional dynamics could further complicate the situation. In Yemen, the Houthi group, which maintains close ties with Iran, could again try to disrupt traffic through the Bab al-Mandab Strait, another vital maritime chokepoint linking the Red Sea to global trade routes. Shipping through that corridor suffered significant disruptions after Israel’s genocidal war on Gaza began in October 2023. The Houthis, who control northwestern Yemen, including the capital, Sanaa, recently organised a mass rally under the slogan Steadfast and Ready for the Next Round, signalling readiness for a potential confrontation with domestic or foreign adversaries. Advertisement Any coordinated pressure on the Strait of Hormuz and Bab al-Mandab Strait would amplify risks for global shipping, energy markets and international trade. Impact on global oil prices Colby Connelly, head of Middle East content at Energy Intelligence, told Al Jazeera from the UAE that a full or partial closure of the Strait of Hormuz would have a “major impact on oil prices in the near term”, depending on how long the strait remains contested. “There are no other major sources of supply that can make up for what comes from the Gulf, especially given the consideration that around 70 percent of OPEC+ spare production capacity sits in the Gulf,” Connelly said, referring to the group of oil-producing countries that collectively sets production volumes. Saudi Arabia relies heavily on the strait to export its crude, shipping roughly 5.5 million barrels per day through the corridor – more than any other country in the region, according to EIA data. Iran’s oil exports, about 90 percent of which go to China, averaged roughly 1.7 million barrels per day in the first half of 2025, according to the EIA. “Saudi Arabia and the UAE both have limited pipeline capacity that can allow exports to continue via the Red Sea coast and Fujairah,” a UAE port on the Gulf of Oman, Connelly warned. While some Gulf producers hold substantial volumes in overseas storage that could cushion supply shocks, Connelly noted that buffers may