Introduction

Donald Trump, our current president, was elected on November 5, 2024, and then inaugurated for his second term as president on January 20, 2025. Following his inauguration, many executive orders have been issued, a majority of which have been tariffs. After campaigning on a platform of immigration reform, lowering the cost of living via retaliatory measures, and the dismantling of many government branches to shrink costs, Trump’s second term was expected to lower the cost of living and grow America’s manufacturing sector. A common way to do this worldwide is to implement tariffs. A tariff is defined as a tax imposed by the government on foreign goods and is designed to increase the price of foreign goods, so that American consumers choose cheaper goods produced in the United States, which bolsters our manufacturing sector. 

History

With this in mind, Trump entered office ready to sign into law a variation of tariffs on both our allies and almost every country in the world. Beginning almost immediately, Trump issued tariffs through the International Emergency Economic Powers Act (IEEPA) on key trading partners such as Canada, Mexico, and China, citing the tariffs as a way to prevent the flow of illicit drugs into America. On April 2, a day President Trump proclaimed as Liberation Day, it was announced that large tariffs, affecting almost every American trading partner, would be imposed. The rates for each country vary from at least 10% up to 41% in key industries. The motivation for these tariffs is most likely the reciprocation of tariffs placed on our goods or an attempt to promote the growth of our slowing industrial sectors; as our manufacturing shrinks, we become increasingly reliant on other countries, something Trump has been adamantly opposed to. Throughout 2025, the administration continued adjusting these tariffs, often after negotiating for lower rates at around 15% with our allies, such as countries within the European Union. However, despite adjustments, the heaviest tariffs have remained on metals, vehicles, and electronics, the sectors that Trump has emphasized growth in the most. Finally, because of ongoing tensions with countries like Cuba and Iran (these were imposed before the escalation of conflict with Iran), tariffs have additionally been imposed as a negotiation tactic.

On February 20, 2026, the Supreme Court ruled President Trump’s emergency trade tariffs unconstitutional. The Supreme Court, the head of the judicial branch, has the final say on the interpretation of the Constitution and the ability to ensure checks and balances in the government. In the 6-3 ruling of Learning Resources Inc v. Trump, the Supreme Court declared that Trump, as the leader of the executive branch, exceeded his presidential authority, as only Congress can enact taxes and therefore impose tariffs. This has invalidated his original tariffs against many countries, such as Canada, Mexico, and China, and now poses the question of what to do with the 160 billion dollars collected by these tariffs. Further discussion will be needed to decide if refunds are required and possible, or if an alternate course will be taken. 

Current Position

In response to the tariffs being invalidated, President Trump has passed new, separate tariffs that cite other parts of legislation. He has enacted a 15% tariff against the same countries targeted under the unconstitutional International Emergency Economic Powers ACT (IEEPA); however, this time, he has cited Section 122 of the Trade Act, which has allowed him to create tariffs for the next 150 days, until they must be either repealed or approved by Congress. Furthermore, it is important to remember that tariffs, tensions, trade agreements, and more are constantly being renegotiated and shaped by the global geopolitical issues, so any position taken or taxes imposed can be changed in the near future.

Results

A question often asked about these unprecedented tariffs is why they were instituted in the first place. Trump, both in his campaign and presidency, has cited that his goals have been to lower the cost of living and promote the American manufacturing sector, which for the past decade has been slowing and has led to increased reliance on foreign companies and countries. Overall, the base line 10% tariffs are expected to raise around 5 trillion dollars over the next 10 years. However, this money is expected to come out of American pockets and increase the cost of living, which is the opposite of what Trump promised during his campaign. A report by The Wharton Business School at the University of Pennsylvania reports that consumers will bear 100% of the burden of these tariffs, not foreign importers, as consumer households are expected to pay an extra $2,400 to $5,300 as a direct result of increased prices. Whether or not this sacrifice by consumers will be worth it to pay off the federal debt, another original goal of tariffs, is yet to be seen. 

Within the manufacturing sector and the stock market, negative effects have also been felt. Because of increased prices for raw materials imported from overseas, American manufacturing companies such as General Motors are expected to be negatively impacted at least in the short term. For example, General Motors’ profit dropped 32% in the quarter after tariffs were implemented due to an extra $1.1 billion in costs. Although the tariffs are creating extra costs currently, the goal is to make imports so much of an expense that American companies are forced to create more factories in America and source them internally. While this is a possibility for the future, the tariffs were created so fast that these large companies were not able to find other sources for raw materials or transition their major labor force from being outsourced to American labor. Additionally, major companies such as General Motors have been hit hard and are experiencing major quarter losses; combined with the uncertainty of President Trump’s term, the stock market has been unstable and unsuccessful.

Conclusion

Overall, Trump’s tariffs are extremely complicated and constantly changing. The rates vary for each country and trade sector, and with the original tariffs being ruled unconstitutional, whether or not Congress will repeal them is still to be seen. The prevailing effects of the tariffs economically have been negative, especially for middle-class consumers, but there is still time to see growth if American manufacturers expand their factories in the future.