Some U.S. allies see higher duties under new tariffs, rivals see relief, trade body says

2026-02-23 08:19:57

Portuguese cargo ship MSC Maxine is pictured in the Port of Balboa at the entrance to the Panama Canal in Panama City on April 23, 2025. The Port of Balboa is managed by CK Hutchison Holdings, based in Hong Kong.

Martin Pernetti | AFP | Getty Images

The UK, EU and Singapore face higher trade-weighted tariffs, while countries such as Brazil, China and India will see a reduction in these duties after US President Donald Trump said he would raise global tariffs to 15%.

This comes after the US Supreme Court Decided in Tariff Ruling 6-3 That the President improperly used the International Emergency Economic Powers Act (IEEPA) to implement his tariffs.

Trump later responded by imposing 10% global tariffs under Section 122 of the Trade Act of 1974, which was then Increased to 15%.

On a trade-weighted basis, the UK faces a 2.1 percentage point increase in its average tariff rate, while the EU expects an increase of 0.8 percentage points. According to the analysis From the global trade watchdog based in Switzerland. In contrast, the rate decreased in Brazil by 13.6 points, and in China by 7.1 points.

The European Commission said He will ask “Complete clarity” about the ruling, noting that “the agreement was an agreement,” with no increase in customs duties beyond the previously agreed upon 15% ceiling. The bloc consisted of 27 members Agreed to a business deal With the US back in August last year, would have seen exports to Washington hit with a 15% tariff.

Asian allies Japan and South Korea face an increase in their trade-weighted average tariff rates of 0.4 percentage points and 0.6 percentage points, respectively. The two countries agreed to a 15% tariff on their exports to the United States last year.

Exposure to tariffs

While some experts said the Supreme Court’s decision offers the most relief to countries previously hit hard by IEEPA-related tariffs, others told CNBC that it hurts countries that are first negotiating trade agreements with the United States.

Countries such as China, Mexico and Canada faced ad hoc tariff orders linked to opioids and border security, as well as reciprocal rates from April 2025, said Johannes Fritz, CEO of the St. Gallen Foundation for Prosperity through Trade and author of the GTA report. Brazil and India also faced their own separate IEEPA orders.

“The Supreme Court struck down all of those things, not just the reciprocal definitions. So the countries that had the most exposure to IEEPA got the most relief,” he explained to CNBC.

The EU and other allies, whose IEEPA burden was largely limited to reciprocal rates, saw a smaller decline, Fritz noted.

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Countries that have negotiated a 10% “reciprocal rate”, such as the UK, as well as countries receiving a 10% base rate such as Singapore, Australia and Saudi Arabia, will then see their trade-weighted tariff rate rise, as IEEPA tariffs are now replaced by Section 122 duties.

But Sarang Chidur, director of the Global South Program at the Quincy Institute, had a different view, telling CNBC:Within India“Those countries that were early in making deals with the United States after the Emancipation Day tariffs last year were kind of the ones holding the bag.”

He added: “While other countries that have resisted, such as Brazil and others, in agreeing to any demands from the United States, may feel a little justified.”

Shedor’s view was echoed by Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. “Countries that were suffering from high tariffs and did not negotiate a significant reduction will benefit the most,” she told CNBC.

She referred to Japan, which saw its “reciprocal tariffs” reduced to 15% in exchange for A Investment pledges worth $550 billion To the United States last year.

“The government has confirmed that it will keep its investments in the United States despite the Supreme Court’s decision,” Herrero said. “In other words, they are paying to get the same treatment as others.”

The reaction of Asian countries

In Asia, countries have mostly taken a wait-and-see approach to the Supreme Court ruling and Article 122 tariffs.

China Ministry of Commerce It said in a statement on Monday that it was making a “thorough assessment” of the Supreme Court’s ruling, and also urged the United States to “rescind its unilateral tariffs on its trading partners.”

Indian trade negotiators had intended to visit Washington, D.C., to confirm a temporary trade agreement that would reduce tariffs on New Delhi’s exports to 18%, but they agreed. Now that flight has been postponed, A source told CNBC.

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In South Korea, Kim Jong-kwan, the country’s Minister of Trade, Industry and Resources, said Seoul will continue friendly consultations “to ensure that the balance of benefits and favorable export terms secured through the Korea-US tariff agreement are not undermined.”

Japan did not issue an official response. Officials told Nikkei Asia He said the ruling would not affect Japan’s first round of investment projects in the United States, as other officials also said Tokyo was keen to maintain its trade deal with Washington.

Tariff 15% It also seems to apply To countries like Singapore, which has a trade deficit with the United States

Singapore will see its effective tariff rate rise by 1.1 percentage points, according to the GTA. The city-state was subjected to a global “reciprocal tariff” of 10%, despite its trade deficit.

A spokesperson for the country’s Ministry of Trade and Industry said Singapore was monitoring the situation closely, and would reach out to its “US counterparts to seek clarification on the implementation of the new Article 122 tariffs and duty drawbacks.”

Confusion ahead

Overall, there seems to be one word that characterizes the business landscape following the Supreme Court ruling: confusion.

While Trump announced 15% tax via Truth SocialThe White House fact sheet still lists Section 122 Tariffs are 10%. “I think there’s a lot of confusion now,” Quincy Institute’s Shedor puts it plainly.

His comments were echoed by Claudio Galimberti, chief economist at Rystad Energy, who wrote that the actual impact on trade remains “uncertain.”

Galimberti also cast doubt on bilateral trade agreements between the United States and its trading partners, saying those deals that were negotiated were structured around IEEPA tariff rates as the baseline.

“At present, the United States appears to have lost the ability to impose these rates, and any previously renegotiated rates arising from the IEEPA tariffs are now replaced by a flat rate of 10% under Section 122,” he said, adding that the components of Section 232 remain legally intact.

GTA’s Fritz also highlighted the same issue, saying it was not clear how product-level deductions for individual countries could be legally implemented.

For example, the EU deal included provisions relating to Portuguese cork exports, but Section 122 requires non-discriminatory application across all trading partners.

“[Trading partners] It provided concessions in exchange for specific tariff treatment that was based on IEEPA. This legal basis no longer exists. “Whether the administration is able to rebuild those deals under Section 301 or other authorities remains to be seen, but that will take time and new legal procedures,” Fritz said.