"U.S. Supreme Court tariff ruling benefits China, India, which have not signed trade deals"

"UK and Australia lose under 10% tariff; Japan and South Korea also lose advantages"

China tariff rate falls 32%→24%; Mexico and Canada also lower

"Impact likely short-lived given Trump may unveil a new tariff regime"

Following the U.S. Supreme Court ruling invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA) and President Trump’s new 15% tariff, countries that have yet to conclude trade agreements with the United States—such as China, India and Brazil—have emerged as the biggest beneficiaries. By contrast, the UK and Australia, which had been subject to a 10% tariff, will be hit as their tariff rates rise, while South Korea and Japan, which had received a 15% tariff in return for large-scale investment commitments, are seen as losing their relative edge.

According to Bloomberg on the 23rd (local time), Morgan Stanley economists expect the trade-weighted average tariff rate in Asia to fall to 17% from 20%. In particular, the average tariff rate on Chinese products is projected to drop to 24% from 32%. However, with the Trump administration expected to move quickly to rebuild a new tariff framework, the impact of these cuts is likely to be temporary.

In a report, the economists led by Morgan Stanley’s Chetan Ahya said that “the peak of uncertainty over tariffs and trade tensions is behind us.”

The new across-the-board tariff imposition is effectively creating a new competitive landscape for U.S. trading partners. Countries such as China, where the 10% fentanyl-related tariff has been scrapped, will now face lower tariff rates on exports than before.

Conversely, countries such as the UK and Australia, which benefited from a low 10% tariff rate under the previous reciprocity framework, stand to lose out. Countries such as Japan and South Korea, which had been granted a 15% tariff rate in exchange for major investment commitments in the U.S., are also set to lose that advantage.

Canada and Mexico also stand to benefit. If, following the U.S. Supreme Court’s decision to invalidate the additional fentanyl tariffs, the exemption provisions under the United States–Mexico–Canada Agreement (USMCA) are maintained and the fentanyl tariffs are not applied, they would be in a favorable position.

Bloomberg Economics estimated that the U.S. average effective tariff rate would fall to about 12% following the invalidation of IEEPA tariffs and the subsequent 15% tariff announced by President Trump.

The Yale Budget Lab, cited by Reuters, said that after the president’s Saturday announcement, the overall average effective tariff rate would drop to 13.7%—down from 16% prior to the Supreme Court ruling. A 16% U.S. tariff rate was the highest since 1936.

On the day, the U.S. dollar fell 0.1% to 97.674 on uncertainty over trade policy, while gold rose 1.2% to $5,163 per ounce. Silver gained 2.8% to about $87 per ounce. As trade-policy uncertainty weighed on investor sentiment, S&P 500 futures declined.

Senior U.S. officials are urging partner countries such as the European Union, Japan and South Korea to adhere to commitments made in previous negotiations. With President Trump expected to visit Beijing soon for a meeting with Chinese President Xi Jinping, the United States is also seeking to extend the one-year truce agreement with China.

U.S. Trade Representative Jamieson Greer said in an interview with Fox News Sunday, “We want to make sure China is adhering to what it agreed to,” adding, “That means continuing to purchase the products it promised.”

While the court ruling has further heightened uncertainty, analysts said the near-term impact could be limited, pointing to the resilience global commerce has shown over the past year and the relatively small swing in the overall average tariff rate.

Economists at Goldman Sachs Group, including David Mericle, estimated that the Supreme Court ruling and the newly announced 15% tariff measure based on Section 122 would reduce this year’s increase in effective tariff rates to 9 percentage points from 10 percentage points.

U.S. economists said imports from countries benefiting from tariff cuts, including China and India, are likely to rise over the coming months. However, they projected that the impact on U.S. GDP would be largely offset by inventory accumulation and stronger consumption, as well as a modest decline in imports from countries facing higher tariff rates.

Kim Jeong-a, contributing reporter kja@hankyung.com