The Supreme Court’s 20 February decision struck down many administration tariffs. This cut the average effective tariff rate on U.S. imports from about 13.6% to 6.4%. The drop was temporary.
After a proclamation last Friday, the President used Section 122 powers to apply a 15% tariff across the board. This pushed the effective rate back to about 12%, bringing back most of the earlier tariff burden.
Tariff Scope And Exemptions
The global 15% tariff only applied to goods that had already faced reciprocal tariffs. Exemptions stayed in place for USMCA-compliant products. Broader exclusions were also added for civil aircraft and parts.
Some tariffs may be reduced, but a broad return to freer trade is unlikely. The U.S. is expected to adjust tariffs to keep leverage in negotiations and to avoid making debt projections worse. Legal and policy uncertainty also remains high.
The quick shift from the Supreme Court ruling to the new White House 15% tariff confirms the administration’s protectionist stance. Last week’s brief dip in tariff rates looks like a short legal disruption, not a policy change. For the near term, betting on a return to lower tariffs is likely a losing strategy.
Ongoing uncertainty also points to higher market volatility. During the first tariff escalations in 2025, the VIX jumped above 20, and Friday’s sudden reversal shows that playbook is still in use. For the next few weeks, buying protection or taking long volatility positions through options or futures may be a sensible approach.
Currency And Cross Border Implications
For currency traders, this strengthens the case for a strong, or at least stable, U.S. dollar as trade barriers stay high. However, the USMCA exemptions suggest a potential relative-value trade. The Mexican peso and Canadian dollar could outperform currencies that do not have similar access to the U.S. market.
The government’s fiscal position also helps keep tariffs in place. January 2026 CBO projections show federal debt rising above 110% of GDP. That makes tariff revenue politically important. Last year’s tariff collections were close to $125 billion, and they are now a budget item the government will be reluctant to surrender.
For equities, the focus should be on clear winners and losers. Derivative strategies may work best on companies with global supply chains—especially in retail and manufacturing—where margins are likely to stay under pressure. In contrast, the carve-out for civil aircraft and parts may support bullish positions in that narrower group of companies.
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