Tariffs in the second Trump administration
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During his second term as President of the United States, Donald Trump enacted a series of steep tariffs affecting nearly all goods imported into the country. From January to April 2025, the overall average effective US tariff rate rose from 2.5% to an estimated 27%—the highest level in over a century. After changes, negotiations, and the invalidation of certain tariffs by the Supreme Court of the United States, the overall average effective tariff rate was 13.7% in February 2026. The items most affected by the tariffs are metals, electrical equipment, vehicles, and computers.
Although the Constitution of the United States grants Congress the sole authority to levy taxes, including tariffs, Congress has passed laws allowing the President to impose tariffs unilaterally for national security reasons.
Under Section 232 of the 1962 Trade Expansion Act, Trump raised tariffs on cars, steel, aluminum, copper, and related derivative products as high as 50%. New tariffs on large-scale batteries, cast iron and iron fittings, plastic piping, industrial chemicals and power grid and telecom equipment are under consideration.
In April 2025, Trump also claimed unprecedented authority under the International Emergency Economic Powers Act (IEEPA) to impose Liberation Day tariffs of at least 10% on goods from nearly all countries. Trump also used the law to impose punitive tariffs against several countries and to order the early closure of the de minimis exemption. In February 2026, the Supreme Court ruled the IEEPA tariffs illegal in the case Learning Resources, Inc. v. Trump. The government estimated that it collected $166 billion from more than 330,000 businesses in IEEPA tariffs that the Supreme Court found unconstitutional and U.S. customs is working on a system to process refunds of these tariffs.
After the decision of the Supreme Court, Trump announced a global tariff of 10% under Section 122 of the Trade Act of 1974, to remain in effect for 150 days, until July 24, 2026. He then threatened to increase the rate to 15% and also issued an executive order to maintain the closure of the de minimis exemption under the IEEPA. Several states, led by New York, then sued to block these tariffs.
Trump also used Section 301 of the Trade Act of 1974 to impose tariffs on Nicaragua starting in 2027 and has threatened to use the law to impose many other country-specific tariffs.
The Trump administration argues that its tariffs will promote domestic manufacturing, protect national security, and substitute for federal income taxes. The administration views trade deficits as inherently harmful, a stance economists criticized as a flawed understanding of trade. Studies have shown that the tariffs have increased expenses and reduced earnings for companies, and have increased costs for households. The promised growth in manufacturing jobs has not been realized. Corporate bankruptcies increased to the highest level since 2010. However, although many economists predicted slower growth and even a possible recession due to the tariffs, US GDP has continued to grow. This was partially attributed to Trump's backtracking on the initial high tariff rates. There has also been no definitive indication of a significant aggregate effect on the labor market so far; however, industries most exposed to tariffs show some signs of weakness relative to the pre-2025 trend.