Tariffs in the second Trump administration
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 and negotiations, the overall average effective tariff rate was 16.8% as of November 2025. US tariff revenue was $287 billion in 2025, a 192% increase from 2024.
Under Section 232 of the 1962 Trade Expansion Act, Trump raised steel, aluminum, and copper tariffs to 50%. He introduced a 25% tariff on imported cars from most countries and a 100% tariff on some pharmaceuticals. New tariffs on semiconductors and other sectors are under consideration.
Trump also claimed unprecedented tariff authority under the International Emergency Economic Powers Act. On April 2, 2025, he invoked the law to impose "reciprocal tariffs" on imports from all countries not subject to other sanctions. A universal 10% tariff took effect on April 5. Although plans for additional country-specific "reciprocal tariffs" were delayed in the wake of the 2025 stock market crash, they were implemented with changes on August 7. The de minimis exemption was eliminated effective August 29, 2025, under the IEEPA. Legal challenges to tariffs imposed under the IEEPA were consolidated into the case Learning Resources v. Trump; a decision by the Supreme Court is imminent.
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. Although Trump has said foreign countries pay his tariffs, US tariffs are fees paid by US importers of foreign goods. The tariffs sparked a trade war with Canada and Mexico and escalated the China–United States trade war.
Studies have shown that the tariffs have increased expenses and reduced earnings for companies and have increased costs for households. Jobs growth slowed significantly in 2025, and the promised growth in manufacturing jobs has not been realized. Corporate bankruptcies in the United States increased to the highest level since 2010. However, although many economists and economic research bodies predicted slower growth and even a possible recession due to the tariffs, U.S. GDP has continued to grow, which partially has been attributed to backtracking by Trump off of the initial high tariff rates.
Background
The 1990s and 2000s saw a dramatic expansion in global goods trade as improvements in communications and shipping technology made global outsourcing more feasible and trade deals reduced tariffs and other barriers to commerce. Although the aggregate gains to the United States were substantial, the benefits of globalization were unevenly distributed; high-skilled workers generally prospered, while Americans with fewer skills and less geographic mobility struggled to adapt to rapid economic change.Although U.S. manufacturing employment had been declining for decades, job losses accelerated in the 2000s after the United States normalized trade relations with China. The surge in outsourcing, alongside advancements in automation, led to localized depressions in many manufacturing-dependent communities. Laid off manufacturing workers typically did not relocate or transition into new industries, even after their communities rebounded, and instead remained unemployed long term. Research indicates that these regions became more politically polarized and that their legislators increasingly supported protectionist policies.
During the 2000s, public opinion surveys and political rhetoric began to reflect growing skepticism toward international economic integration, a trend that intensified following the Great Financial Crisis. In 2008, Barack Obama blamed NAFTA for the loss of a million jobs and stated, "we can’t keep passing unfair trade deals like NAFTA that put special interests over workers’ interests."
According to Jeffry Frieden, 2016 "was the first time since the 1930s that both major parties had candidates for the presidential nomination who were openly hostile to economic integration, and that any major party had an actual nominee with similar views. The victory of Donald Trump in the 2016 presidential election marked the victory of an economic nationalism that had long been far from the mainstream of American politics." Trump’s embrace of restrictive trade policies and broad tariffs represented a sharp departure from the Republican Party’s general support for free trade over the preceding 70 years, and a partial return to the party’s protectionist orientation in the early 20th century.
First Trump administration
In 2018, Trump imposed tariffs on steel and aluminum imports. He also initiated the China–United States trade war, which subjected 60% of US-China trade to 20% tariffs. Most sources say that the trade war did not achieve its goals: instead, the U.S. trade deficit widened, growth slowed, manufacturing jobs did not return, and prices rose.In May 2019, Trump used tariff threats of up to 25% on Mexico to negotiate an expansion of his "Remain in Mexico" policy and the deployment of Mexican soldiers to help control illegal immigration. The Mexican government, led by Andrés Manuel López Obrador, deployed nearly 15,000 troops to the Mexico–US border and 6,500 troops to the Guatemala–Mexico border.
In 2020, the US, Mexico and Canada renegotiated the North American Free Trade Agreement as the US–Mexico–Canada Agreement and recommitted to 0% tariffs on most products traded between them. Five weeks after the USMCA went into effect, Trump used an exemption for national security concerns to implement a 10% tariff on Canadian aluminum after claiming it was flooding the US market. He withdrew the tariff a month later, three hours before the 29th Canadian Ministry planned to retaliate.
2024 presidential campaign
During his 2024 presidential campaign, Trump pledged to impose even larger tariffs than in his first term, including 60% on China, 100% on Mexico, and 20% on all other countries. He also proposed tariffs to penalize US companies that outsourced manufacturing, such as a 200% tariff on John Deere. He proposed using tariffs to achieve a wide range of goals, including preventing war, reducing trade deficits, improving border security, and subsidizing childcare.In April 2025, Trump suggested tariff revenues could eventually replace income taxes, at least for those making less than $200,000 per year, although others estimated it would cover less than 25% of that cost and less if import volumes fell. The Tax Foundation deemed the idea "mathematically impossible".
On November 5, 2024, shortly after the 2024 United States presidential election, Trump acknowledged that tariffs might cause "some pain" for Americans but said, "it will all be worth the price that must be paid".
In December 2024, Trump appointed tariff hard liner Peter Navarro as his Senior Counselor for Trade and Manufacturing. Stephen Miran, another tariff hard liner, was appointed chair of the Council of Economic Advisers.
Legality
Trade law
The U.S. Constitution was written in part because of tariffs. Under the Articles of Confederation, the United States could not effectively prevent states from imposing tariffs and regulations that conflicted with the Congress' efforts to regulate trade with foreign nations. In Michelin Tire Corp. v. Wages, the U.S. Supreme Court explained the purpose of tariffs:The Tariff of 1789 was the first major piece of legislation passed in the United States, and signed into law by President George Washington. The Constitution has detailed provisions regarding tariffs, particularly the Import-Export Clause and the Taxing and Spending Clause, including prohibiting states from imposing tariffs. In Federalist No. 12, Alexander Hamilton made the argument that tariffs on imports would need to be the primary source of revenue for the new federal government and that the federal government could more effectively impose tariffs on imports than the states could separately.
In Federalist 12, Hamilton argues that the formation of the union will lead to greater wealth for the states. The government, by establishing currency, would encourage industry and all Americans would enjoy the benefits. Hamilton continues by arguing that there is no rivalry between commerce and agriculture – rather each benefits when the other prospers. Taxes should be levied on commerce and the union will be more efficient than the states at collecting revenue. In fact, the article predicts that revenue will triple with the new federal government administering tax collection. The states had been unable to establish an adequate way to collect taxes. Hamilton claims that direct taxation is not a reality for the new government. Instead, taxes should be levied on imports and exports, mainly on imports. Hamilton also points out that if the federal government administers tax collection instead of leaving the task to states, it will reduce the amount of resources needed to ensure that the tax is not being evaded. It will be easier for the federal government to protect one border – the Atlantic coast – than it would be for each state to protect its borders. A few ships stationed outside of Americas ports would ensure the collection of duties. Hamilton concludes that funding the government is essential and if Americans fail to do so then the Revolution itself will have been in vain.
Although the Constitution grants Congress the sole authority to levy taxes, including tariffs, Congress has passed laws allowing the President to impose tariffs for national security reasons unilaterally. In his second term, Trump added tariffs to steel, aluminum, and auto imports under Section 232 of the Trade Expansion Act, which allows the President to modify imports if the Secretary of Commerce conducts an investigation, holds public hearings, and determines that the imports threaten national security. Trump directed the USTR to initiate similar investigations to impose tariffs under Section 301 of the Trade Act of 1974.
Trump also invoked unprecedented powers under the National Emergencies Act and the International Emergency Economic Powers Act by declaring multiple "national emergencies" related to border security, energy, and trade deficits. Declaring these emergencies allowed Trump to enact tariffs quickly without following the complex procedures required by TEA or other trade statutes and did not require congressional approval. While the IEEPA had been used to enact economic sanctions, it had never before been used to enact tariffs. As he signed the orders, Trump stated that declaring an emergency "means you can do whatever you have to do to get out of that problem."
To terminate a national emergency under the NEA, a member of Congress may file a privileged resolution requiring their chamber to vote on the topic within 15 days. Democratic representatives introduced resolutions to end several of Trump's national emergencies justifying tariffs, but these efforts were blocked by the Republican congressional majority. JD Vance cast a tie-breaking vote in the Senate to uphold the emergency underpinning the "Liberation Day" tariffs.