Tariffs and Trade Authority

Article I gives Congress the power to lay duties and regulate commerce with foreign nations, and the Tariff Act signed on July 4, 1789, was one of the first major laws. For more than a century tariffs were the government's main source of revenue and a central political issue, and Congress set rates item by item. After the Smoot-Hawley Tariff Act of June 17, 1930, raised duties sharply and was followed by retaliation abroad, Congress passed the Reciprocal Trade Agreements Act of 1934, authorizing the President to negotiate tariff reductions with other countries.

Later laws gave presidents more tools. Section 232 of the Trade Expansion Act of 1962 lets the President restrict imports that threaten national security, Section 201 of the Trade Act of 1974 allows temporary safeguard tariffs, Section 301 authorizes action against unfair foreign practices, and Section 122 permits tariffs of up to 15 percent for 150 days to address balance-of-payments problems. Trade promotion authority lets Congress consider negotiated agreements on an up-or-down vote. The International Emergency Economic Powers Act of 1977 lets the President regulate transactions during a declared national emergency, though it does not mention tariffs.

In 2025 the President imposed sweeping tariffs, including duties on Canada, Mexico, and China in February and a baseline tariff on most imports announced April 2, using emergency powers under the 1977 law, along with Section 232 tariffs on steel, aluminum, autos, and other goods, raising the average U.S. tariff rate to its highest level since the 1930s. The Court of International Trade and the Federal Circuit ruled that the emergency law did not authorize the tariffs, and on February 20, 2026, the Supreme Court agreed 6 to 3 in Learning Resources v. Trump, leaving Section 232 tariffs in place. The administration then turned to Section 122 and Section 301 for replacement tariffs. Supporters said tariffs protect industry and give negotiators leverage, while critics said they raise prices and that only Congress may impose such broad taxes.