Saad Ullah
A U.S. Supreme Court ruling on February 20, 2026 threw a wrench into the existing tariff framework, striking down parts of earlier Trump-era measures. China's commerce ministry was quick to respond, but not in the way markets feared. Instead of announcing immediate retaliation, Beijing said countermeasures would come "in due course" and called on Washington to walk back what it called unilateral actions. That careful choice of words left the door open for negotiation while keeping pressure on the table.
Wall Street Revises Tariff Math: 5% Drop and a 24% Weighted Rate on the Horizon
The ruling triggered a fast round of recalculations at major banks. Goldman Sachs now estimates that the average U.S. duty on Chinese goods could fall by roughly 5% under revised assumptions. Morgan Stanley went further, projecting that weighted tariff levels may drop from 32% to 24%, a shift that would meaningfully reduce the cost burden on Chinese exports. As analyst @NaeemAslam23 noted, these adjustments reflect both the legal decision and a broader recalibration of how tariffs are being structured and applied. For more context on how duties reached their current levels, see US Tariff Levels Hit 100-Year High Amid Trade War.
Lower effective tariff rates could strengthen China's export positioning and reduce near-term escalation risks.
New 10% Global Tariff Keeps Trade Tension Alive Despite Easing Signals
Still, the picture is not entirely rosy. A new 10% global U.S. tariff took effect this month, adding another layer to an already complicated trade landscape. Even if the Supreme Court ruling softens some of the older measures, this new levy signals that Washington has no intention of fully stepping back from its protectionist posture. The overall tariff burden remains elevated, and companies making supply chain decisions are still navigating genuine uncertainty.
The dollar has not been immune to the turbulence either. USD Price Prediction: Tariff Bomb About to Hit Dollar Markets explores how shifting tariff expectations continue to weigh on currency markets. Meanwhile, safe-haven demand has kept gold in focus, with Gold (XAU) Rebounds Nearly 1% as China Considers US Trade Talks tracking the metal's reaction to easing diplomatic signals.
With both sides preserving their options rather than pushing for confrontation, the near-term outlook leans toward managed tension rather than outright escalation. But in a trade environment where a single court ruling or policy announcement can shift projections overnight, that relative calm remains fragile.
Saad Ullah
