en-GB

gb_intm_classes

featured_gb_intm

intm

Intermediary

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

Market Perspectives: Tariffs 2.0? The options for President Trump

Anthony Willis

Senior Economist, Multi-Asset Solutions team

Key Takeaways

Last Friday saw the US Supreme Court rule that the current tariff regime under the International Emergency Economic Powers Act (IEEPA) is unlawful.
With lower courts set to decide the approach around refunds of tariffs already paid, there will likely be an extended period of uncertainty.
In response to the ruling the US government announced the imposition of 15% tariffs for 150 days through Section 122 of the 1974 Trade Act. Other routes for implementing tariffs exist but require lengthy investigations.
The ruling will likely see the overall effective tariff level drop slightly to 14% from 15%-16%. Companies and markets have become accustomed to these levels.
Any refunds could be slightly beneficial for US earnings and the economy, but the government will receive marginally lower tax revenues. Despite uncertainty, tariffs look set to remain a feature from here.

Transcript

This week we focus on tariffs following last Friday’s US Supreme Court ruling that the current tariff regime under the International Emergency Economic Powers Act (IEEPA) is unlawful. The decision upholds the judgements of two lower courts last year and was not surprising given the language used in the deliberations by the Supreme Court back in November.

Some uncertainty remains as the Supreme Court decided to let lower courts decide what to do about refunds of tariffs already paid. This will cause febrile confusion over the coming months, and President Trump commented that it will “result in five years of litigation”. Given there are plenty of other routes by which the White House can pursue tariffs, its response was not a huge surprise. President Trump duly announced the use of Section 122 of the 1974 Trade Act, which allows a blanket tariff of up to 15% for 150 days. On Friday, Trump announced a 10% levy, but a day later this was increased to 15%. The ‘new’ tariff regime will begin on Tuesday 24 February for 150 days, through to July. In theory that could be extended further with a Congress vote, but with a razor thin majority and the midterms on the horizon it is not clear the Republicans would support further tariffs. It may be legally questionable, but Trump could allow the 150-day period to end and then declare another emergency and put the tariffs back in place for another 150 days. The result would be the imposition of constantly rolling tariffs.

However, there are more effective and arguably more legal mechanisms for the US administration to pursue. These include Section 232 of the 1962 Trade Expansion Act, which allows investigations into specific sectors – such tariffs are already in place. In addition, there is Section 301 of the same act that covers countries and ‘unfair practices’. Such tariffs require investigations to take place, which on average have taken around nine months. This timescale could be speeded up in future and allow the US to have more focused tariffs rather than the blanket 15% level. There is also Section 338 of the 1930 tariff act, which allows for much larger tariffs of up to 50% for ‘unfair practises’ – again with investigations needed. However, I don’t think Trump is looking for 50% – an average of around 15% seems like a level that markets and companies are comfortable with.

The removal of the unlawful IEEPA tariffs means the overall effective rate will drop slightly to around 14% from 15%-16%. The key point is that the removal of the IEEPA umbrella removes a significant amount of policy leverage for Trump. Thus far he has used tariffs as both an economic and foreign policy tool to enforce his views on other countries. Trump certainly has plenty to talk about in his State of the Union address, which is on Tuesday.

It seems likely that we are now going to be in a persistent tariff regime. This has always been our base case, although the Supreme Court ruling does add more confusion in the short term. Tariffs of around 14%-16% are significantly higher than at the start of 2025, but markets and companies have got themselves comfortable with such levels.

At the margin the refunds – if they are processed – will be slightly beneficial for US earnings and the economy. The flip side is that the US government will receive marginally lower tax revenues. Overall, we expect tariffs to remain a feature as, despite the Supreme Court’s ruling, the US government has other routes through which to pursue the implementation of levies.

23 February 2026

2026年 February 23日

Key topics

Subscribe to insights

Get the most out of your email by tailoring the types of insights and information you would like to receive from us.

Latest articles

23 Feb 2026

2026年 February 23日

Market Perspectives: Tariffs 2.0? The options for President Trump

This week we focus on tariffs following last Friday’s US Supreme Court ruling that the current tariff regime under the International Emergency Economic Powers Act (IEEPA) is unlawful.

23 Feb 2026

2026年 February 23日

Asset Allocation update – February 2026

2026 has thus far seen geopolitical events, from Venezuela and Iran to Greenland, attracting attention. Headlines about tariffs and questions over the independence of the US Federal Reserve have continued. Still, financial markets remain resilient.

16 Feb 2026

2026年 February 16日

Market Perspectives: The Great Rotation… What’s going on with US equities?

This week we focus on US equities and a rotation in the market.

Key topics

Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions expressed by individual authors do not necessarily represent those of Columbia Threadneedle.

Important information

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

For professional investors only.

This financial promotion is issued for marketing and information purposes only by Columbia Threadneedle Investments in the UK.

The Fund is a sub fund of Columbia Threadneedle (UK) ICVC III, an open ended investment company (OEIC), registered in the UK and authorised by the Financial Conduct Authority (FCA).

English language copies of the Fund’s Prospectus, summarised investor rights, English language copies of the key investor information document (KIID) can be obtained from Columbia Threadneedle Investments, Cannon Place, 78 Cannon Street, London, EC4N 6AG, email: [email protected] or electronically at www.columbiathreadneedle.com. Please read the Prospectus before taking any investment decision.

The information provided in the marketing material does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell or otherwise transact in the Funds. The manager has the right to terminate the arrangements made for marketing.

Financial promotions are issued for marketing and information purposes; in the United Kingdom by Columbia Threadneedle Management Limited, which is authorised and regulated by the Financial Conduct Authority; in the EEA by Columbia Threadneedle Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); in Switzerland: Issued by Threadneedle Portfolio Services AG, Registered address: Claridenstrasse 41, 8002 Zurich, Switzerland. In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.

Please confirm a few details about yourself to visit your preference centre

*Mandatory fields

Something went wrong, please try again

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

Visit preference centre

To view and control which insights you receive from us by email, please visit your preference centre.

Visit preference centre

CT Property Trust- Fund Manager Update

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium

Market Perspectives: Tariffs 2.0? The options for President Trump

Key Takeaways

Subscribe to insights

Latest articles

Market Perspectives: Tariffs 2.0? The options for President Trump

Asset Allocation update – February 2026

Market Perspectives: The Great Rotation… What’s going on with US equities?

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

Explore our CT Universal MAP ranges

Portfolio insights

Resources and support

Risk Disclaimer

Please confirm a few details about yourself to visit your preference centre

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.

CT Property Trust- Fund Manager Update

Market Perspectives: Tariffs 2.0? The options for President Trump

Key Takeaways

Subscribe to insights

Latest articles

Market Perspectives: Tariffs 2.0? The options for President Trump

Asset Allocation update – February 2026

Market Perspectives: The Great Rotation… What’s going on with US equities?

Sign up to receive insights, information and reporting

Thank you. You can now visit your preference centre​ to choose which insights you would like to receive by email.

Explore our CT Universal MAP ranges

Portfolio insights

Resources and support

Risk Disclaimer

Please confirm a few details about yourself to visit your preference centre

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.

To view and control which insights you receive from us by email, please visit your preference centre.

CT Property Trust- Fund Manager Update

Thank you. You can now visit your preference centre to choose which insights you would like to receive by email.