Trump Tariffs Return

Key Takeaways

• Trump's tariffs are back under a new legal basis after the Supreme Court struck down the emergency-powers version.
• Australia faces a 12.5% rate, up from the temporary 10%, so the immediate rise is 2.5 percentage points.
• Exemptions covering around 70% of Australian exports are expected to soften the impact.
• Section 301 duties can persist without a fresh congressional vote, so these rates may not be temporary.
• A less predictable trade landscape adds to the case for gold as a long-term hedge.

Donald Trump's global tariff program suffered a major legal defeat in February 2026, when the US Supreme Court struck down many of the duties that relied on emergency powers. The court ruled that the International Emergency Economic Powers Act does not authorise the president to impose tariffs, and the affected duties were terminated later that month.

Five months later, the tariffs are back. The Trump administration has announced new duties of between 10 and 12.5 per cent on 60 major trading partners, covering economies responsible for around 99 per cent of US trade. Australia will face the higher 12.5 per cent rate, replacing the temporary 10 per cent tariff that had remained in place following the court decision.

The immediate increase for Australian exporters is therefore only 2.5 percentage points, and exemptions reported to cover around 70 per cent of Australian exports are expected to cushion the effect further. The more important development is how the administration has rebuilt the tariff system on a legal foundation designed to survive the next court challenge.

How the legal pathway changed

Trump's original global tariffs relied heavily on presidential emergency powers. The Supreme Court rejected that approach, limiting the administration's ability to impose sweeping trade barriers without congressional approval.

Rather than abandoning the tariff objective, the White House changed the pathway. The new tariffs have been imposed under Section 301 of the Trade Act of 1974. This allows the United States Trade Representative to respond to foreign policies or practices deemed unreasonable, discriminatory or damaging to US commerce.

In this case, the administration opened investigations into whether 60 economies were doing enough to prevent goods produced using forced labour from entering their markets. Hearings were held, governments were consulted and thousands of public submissions were reviewed.

The investigation has now produced the required finding. Countries considered to have stronger forced labour import restrictions receive the 10 per cent rate. Most others, including Australia, receive 12.5 per cent.

Australia disputes the classification

Australia disputes the classification. The Australian government argues that it already has strong modern slavery legislation and has consistently received the highest possible rating, Tier 1, in the US State Department's own assessments of efforts to combat human trafficking. The 2025 Trafficking in Persons Report placed Australia among just 33 countries ranked Tier 1.

The forced labour issue may be legitimate, but the commercial outcome closely resembles the system the Supreme Court struck down. Trump lost the authority to impose one broad global tariff, then assembled a collection of individual investigations capable of producing almost the same result.

Supporters of the approach argue that Section 301 is a long-standing, purpose-built trade tool rather than an emergency workaround, and that forced labour in supply chains is a legitimate basis for action. The counter-view is that the practical effect, a broad tariff wall reassembled economy by economy, looks similar to the measures the court rejected.

A familiar pattern

This resembles what happened with Iran. Under the US War Powers Resolution, a president who introduces American forces into hostilities generally has 60 days to obtain congressional approval or begin withdrawing them. As that deadline approached in 2025, the Trump administration argued that an interim ceasefire with Iran had paused or ended the 60 day clock, even though US forces remained deployed and military pressure around the Strait of Hormuz continued.

Some former administration officials went further, suggesting that the existing military operation could simply be ended and replaced with a newly named mission focused on reopening the strait and defending shipping.

What it means for investors

The United States is developing a tariff system that may prove more durable than the one rejected by the Supreme Court. Section 301 duties can remain in place indefinitely following an investigation and can be adjusted by the executive without requiring a new vote in Congress. This suggests investors should not necessarily view the current rates as another temporary negotiating tactic that will disappear after the next agreement, election or court ruling.

Australia is not immune from these tariffs, and they may not prove temporary. This administration has signalled that when one legal door closes, it may look for another. That points to a potentially less stable trade environment, which historically has strengthened the case for gold as a hedge against uncertainty. For investors thinking in those terms, physical gold held through Ainslie Bullion is one way to build that exposure.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.