Only a day after the Supreme Court struck down his tariff regime, and less than 18 hours after signing an executive order implementing new 10 percent tariffs on all US trading partners, Donald Trump has announced he will increase the levy to 15 percent.

In a post on his social media platform, the president said after a “thorough, detailed, and complete review of the ridiculous, poorly written, and extraordinarily anti-American” court decision, he is “effective immediately, raising the 10 [percent] Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15 [percent] level”.

Some of the sting was removed under yesterday’s order, which listed a number of exemptions for critical mineral, auto, aerospace agricultural, and energy products, and clarified that the new levies would not stack on top of existing Section 232 duties. Items considered compliant under the USMCA agreement from Canada and Mexico were also carved out, while tariffs on some steel, aluminum, and auto products will remain.

We expect legal challenges to emerge in the coming weeks as impacted firms and business associations take exception to the administration’s interpretation of the Trade Act of 1974, which specifies that the country be facing a “large and serious balance of payments deficit” when Section 122 is invoked. Although the US has run a trade deficit for decades, it has not faced a serious balance of payments problem since the end of the Bretton Woods fixed exchange rate system.

But appeals will take months (or years), and markets are unlikely to take the latest escalation well, given that it will lift the effective tax rate on US companies, add to the burden on American consumers, and raise economic policy uncertainty levels once again. Options-market positioning on the dollar could lurch back into bearish territory from currently-neutral levels as traders anticipate renewed weakness ahead.