Donald Trump Imposes Sweeping Tariffs Under 1974 Trade Act

President Donald Trump implemented a new trade regime on February 24, invoking Section 122 of the 1974 Trade Act to impose sweeping tariffs on all imports for a period of 150 days. This action followed a ruling by the Supreme Court of the United States that declared his previous flagship trade policy illegal, a decision Trump described as "deeply disappointing."

The new regime establishes a nominal uniform tariff rate of 10% for all countries. However, the actual effective rates vary due to existing tariffs on cars and metals, as well as a list of exemptions known as Annex II. These variations resulted in the effective tariff for Canada dropping from 26.0% to 8.9%, while rates for Russia increased. Overall, the effective tariff for American importers decreased from 18.5% to 10.0%.

Some finished goods from China faced extreme effective rates under the new system, including a 58% rate for electric personal-care appliances in April 2025. Despite these high rates, analysis indicates a weak correlation between the tariffs and increased relative inflation across consumer spending categories.