A tariff is a tax on imported goods. For most of the nineteenth century tariffs paid for most of the federal government and were among the fiercest political issues of the day. After the Smoot-Hawley tariff of 1930 and the trade wars of the Depression, Congress shifted much of the power to negotiate and adjust tariffs to the President, and the country helped build a global system of lower tariffs.
This guide explains who has the power to set tariffs, the laws that delegate it, the 2025 emergency tariffs and the court fight over them, and the debate over trade policy.
Importers pay tariffs, but the cost can be passed to consumers, absorbed by companies, or offset by foreign sellers cutting prices. Most economic studies of the 2018 and 2025 tariffs found that much of the cost fell on American buyers. Supporters say tariffs protect domestic industries and jobs, strengthen national security supply chains, raise revenue, and give leverage in negotiations. Critics say they raise prices, invite retaliation against American exporters, and shift a power the Constitution gave to Congress to the President. Bills to require congressional approval of new tariffs have been introduced but have not become law.
In 2025 the President declared national emergencies and invoked the International Emergency Economic Powers Act of 1977 to impose tariffs on most trading partners, including a baseline tariff on nearly all imports announced in April. The Court of International Trade ruled the tariffs unlawful in May 2025, and the Federal Circuit agreed in August. On February 20, 2026, the Supreme Court held 6 to 3 that the law, which lets the President regulate importation, does not authorize tariffs. The Chief Justice wrote that the statute contains no reference to tariffs or duties, while the dissenting justices argued that the power to regulate imports includes tariffs. The trade court later ordered refunds with interest of more than 160 billion dollars in collected duties.
Several laws let the President raise tariffs without a new vote. Section 232 of the Trade Expansion Act of 1962 allows tariffs on imports that threaten national security after a Commerce Department investigation, and it was used for steel and aluminum in 2018 and for autos, copper, and other goods in 2025. Section 301 of the Trade Act of 1974 allows the Trade Representative to respond to unfair foreign practices, as with tariffs on China in 2018. Section 201 provides safeguards against import surges after an International Trade Commission finding, and Section 122 allows temporary tariffs of up to 15 percent for 150 days to address trade deficits. Trade agreements such as the 2020 United States-Mexico-Canada Agreement are usually approved by Congress under fast-track procedures.
Article I gives Congress the power to lay and collect taxes, duties, imposts, and excises, and to regulate commerce with foreign nations. One of the first laws passed by the First Congress was the Tariff of 1789. Customs duties supplied most federal revenue until the 16th Amendment allowed a national income tax in 1913. Today tariffs are written into the Harmonized Tariff Schedule, and the House Ways and Means Committee and Senate Finance Committee have jurisdiction over trade.
The ruling did not affect tariffs under Section 232. Within days the administration imposed a temporary global tariff under Section 122 and opened new Section 301 investigations that led to tariffs on dozens of countries in July 2026. Those actions drew new lawsuits in the Court of International Trade. Customs and Border Protection collects duties from importers at the border, the Commerce Department and the Trade Representative run investigations, and the International Trade Commission studies import effects.
Tariffs divided the country from the start. Northern manufacturers favored protection, while Southern exporters opposed it, and the Tariff of 1828 provoked South Carolina's nullification crisis. The Smoot-Hawley Tariff of 1930 raised duties on thousands of goods and drew retaliation abroad. The Reciprocal Trade Agreements Act of 1934 let the President negotiate tariff cuts with other countries, and the United States later helped create the General Agreement on Tariffs and Trade in 1947 and the World Trade Organization in 1995.
See the emergency law at the center of the case in emergency powers explained, follow tariff revenue in where your tax dollars go, or see how trade fits diplomacy in how foreign policy is made.