Lombard Odier Maintains Pro-Risk Stance as New 15% Global US Tariff Replaces Overturned IEEPA Levies

Lombard Odier analyzes the impact of the 15% US global tariff following the Supreme Court's IEEPA ruling, maintaining a pro-risk stance for 2026.

By: AXL Media

Published: Feb 26, 2026, 4:57 AM EST

Source: The information in this article was sourced from Lombard Odier

The Transaction or Development

The global trade landscape underwent a rapid transformation this February after the US Supreme Court struck down the executive branch's use of IEEPA for broad import duties. Within hours of the ruling, President Trump transitioned to Section 122 of the 1974 Trade Act, initially setting a 10% levy before raising it to 15% via a social media announcement. This new global duty, effective as of February 24, 2026, serves as a temporary measure for 150 days, although Lombard Odier analysts note that it can be renewed with congressional approval, signaling a shift from emergency-driven mandates to a more institutionalized—yet still protectionist—trade policy.

Regulatory and Competitive Landscape

The legal shift has created a divergent impact across global economies. Countries previously facing high "negotiation" tariffs, such as India (which saw rates drop from 50% to 18% earlier this month) and Brazil, may find the new 15% baseline more favorable. Conversely, the United Kingdom and other nations that previously enjoyed lower rates may experience increased market volatility as they navigate the loss of previous exemptions. Lombard Odier highlights that while the new policy is less flexible for country-specific targeting, it maintains critical exemptions for energy, pharmaceuticals, and non-cutting-edge semiconductors from key partners like Taiwan and Japan.

Strategic Rationale and Market Impact

From an investment perspective, the Supreme Court decision is expected to trigger a modest depreciation of the US dollar and a rise in Treasury yields, driven by anticipated fiscal revenue gaps from tariff reimbursement claims. However, Lombard Odier maintains that the broader economic expansion remains intact. The firm argues that the effective reduction in the applied tariff rate—from 14.5% to 12.5%—offsets the immediate legal confusion. This leads to their continued conviction in a "pro-risk" strategy, focusing on high-quality equities and sectors that stand to benefit from a more stable, albeit restricted, trade environment.