In February 2026, the Supreme Court ruled that the administration’s wave of Liberation Day tariffs under the International Emergency Economic Powers Act (IEEPA) was unlawful. Six of the nine gownwearers declared that IEEPA can’t be used to slap wildly varying tariffs on most of the planet and change them every second Tuesday before breakfast.
Overnight, the chaotic tariff regime vanished like smoke in a cyclone. Billions in duties evaporated. Lawyers sharpened their pencils, exporters lifted their revenue forecasts, and importers began calculating refund claims with the enthusiasm of a kid hunting for Easter eggs. But that enthusiasm lasted about as long as the Easter egg hidden near an ants’ nest.
To partially counter the decision, the administration imposed a new global 10% Temporary Import Surcharge. But it seems someone in the administration belatedly twigged that the maximum tariff under this Act is 15% – and the following day the President announced that this would be the rate. Except, it isn’t. The same President subsequently signed a proclamation imposing the 10% surcharge. Could that change tomorrow? Sure – why not? However, importantly, note the word temporary – this tariff is only effective until 24 July 2026, after which Congress approval is required, and Congress can approve higher tariffs should they wish.
For Australia, we mostly had 10% tariffs before and we mostly have 10% after. In November 2025, beef and some other agricultural categories were exempted to help with US food inflation. That remains the case (i.e. 0%). So far, we’ve been relatively lucky.
However, the broadranging 10% doesn’t affect US imports from Australia that are already subject to tariffs under Section 232 of the Trade Expansion Act (more acts than Shakespeare in the Park). For Australian hard commodity exporters, that means copper and steel remain at 50%.
Remember Vietnam’s rollercoaster last year? A Liberation Day smack of 46%, then a temporary reprieve at 10%, finally settling on 20% as part of a forward-looking deal. Now they’re back to paying a flat 10% with a chance to bounce to 15%, with both rates still temporary. Uncertainty remains the flavour of the month … sorry, year.
Even though the US Supreme Court restored legal clarity, it didn’t restore trust. The process has been chaotic, and uncertainty remains the true economic risk. Like the analogous tsunami, the surges up and down have caused serious damage. It will take a decent period of calm before those that produce goods exported to the US dip their investment toes back into that stretch of water.
The Compass will check in again next year!
