Just one day after the US Supreme Court struck down Donald Trump’s sweeping “reciprocal tariffs”, the President escalated.
In a 6–3 ruling, the Court found that the 1977 International Emergency Economic Powers Act (IEEPA) did not authorise tariffs. The law does not mention duties or taxes. It was a rare judicial pushback on Trump’s trade strategy. Within 24 hours, Trump pivoted. He lifted the universal tariff from 10% to 15%, invoking Section 122 of the Trade Act, which allows temporary tariffs for up to 150 days without Congressional approval. The legal mechanism changed, while the policy direction did not.
Australia exports around $24 billion in goods to the US annually. Exporters now face a 15% levy instead of 10%. Since April 2025, Australian firms have paid an estimated $1.4 billion under the now-invalid IEEPA framework, funds that may be eligible for refunds through US courts.
Meat, gold and medicinal goods account for nearly 46% of Australian exports to the US since 2020. Large multinationals may be able to absorb or restructure around higher tariffs. Small and mid-sized exporters cannot. For many regional producers, particularly in agriculture and manufacturing, a 5% increase in border costs can materially compress margins, weaken US competitiveness, and delay hiring or expansion decisions. And for US-based small importers, higher tariffs mean either passing costs onto consumers or absorbing them, both of which squeeze already thin margins.
Roughly US$175 billion has been collected under the reciprocal tariffs. More than 1,000 refund cases are already before lower courts. Even if repayments occur, economists expect a slow, legally complex process with limited short-term economic stimulus.
The 15% tariff can only last 150 days without Congressional approval. From here:
Congress could formalise higher trade barriers
Trump could pivot to industry-specific tariffs under national security laws
Or markets could force moderation if volatility spikes
