Trade Brief: Trump Imposes Temporary Import Surcharge
Trump imposed a temporary 10% import surcharge to address U.S. trade imbalances. Trump imposed the surcharge under Section 122, following the SCOTUS decision limiting tariff authority under IEEPA.
The Trump administration introduced a temporary global tariff surcharge to address structural imbalances in international payments and protect the stability of the U.S. economy. Trump impose the surcharge under Section 122 of the Trade Act of 1974, a rarely used provision that allows the president to restrict imports to address serious balance-of-payments problems.
The move follows the Supreme Court’s decision that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, even during a declared national emergency. Section 122 allows the president to impose temporary import surcharges of up to 15% for a maximum of 150 days when the United States faces significant balance-of-payments deficits.
What This Means
The new import surcharge represents a shift toward statutory trade authorities rather than emergency economic powers.
Key implications include:
The administration is replacing invalidated IEEPA tariffs with a temporary tariff under Section 122.
The new tariff is time-limited and capped by statute, unlike the open-ended tariffs attempted under emergency powers.
The surcharge may serve as a short-term bridge policy while the administration considers longer-term tariffs under other authorities such as Section 301 or Section 232.
What Happened
The administration previously imposed tariffs under the International Emergency Economic Powers Act (IEEPA) as part of its broader trade policy. Businesses and trade groups challenged those tariffs in court.
After the Supreme Court ruled that IEEPA does not authorize the president to impose tariffs, the administration responded by issuing a presidential proclamation imposing a temporary import surcharge under Section 122 of the Trade Act of 1974.
Under the statute:
The tariff can reach up to 15%
It can remain in place for up to 150 days without congressional approval
Congress may authorize additional measures if necessary
Why This Matters for Companies
A new tariff regime is now in effect: The new surcharge increases the cost of imported goods across many sectors, affecting manufacturers, retailers, and companies with global supply chains.
Trade policy volatility remains high: Although the Supreme Court limited emergency tariff authority, the administration still has several statutory tools available, including:
Section 122 balance-of-payments tariffs
Section 232 national security tariffs
Section 301 tariffs targeting unfair trade practices
Temporary tariffs may lead to longer-term measures: Section 122 tariffs are often used as short-term policy tools, potentially followed by longer investigations or new trade actions.
Macro Impact
Trade policy escalation: The new surcharge effectively raises U.S. tariff levels across many imports and may prompt retaliation from trading partners.
Balance-of-payments framing: The administration’s use of Section 122 reflects renewed emphasis on international payments imbalances and trade deficits, as described in the White House proclamation establishing the import surcharge.
Institutional shift: Following the Supreme Court ruling on IEEPA tariffs, the administration has moved toward traditional statutory trade authorities, which involve procedural limits and congressional oversight.
What Companies Should Do
Monitor the 150-day tariff window: Companies should track whether Congress extends the measure or whether the administration transitions to other tariffs.
Evaluate import exposure: Businesses should analyze tariff exposure by product category and supplier country.
Prepare for additional trade actions: Further tariffs could emerge under Section 301 or Section 232 authorities.
Strengthen trade policy monitoring: Rapid changes in legal authorities and trade policy tools make proactive monitoring critical.
Key Takeaway
The administration’s decision to impose a temporary import surcharge under Section 122 marks the next phase of U.S. tariff policy following the Supreme Court’s rejection of tariffs imposed under IEEPA.
Although the new tariff authority is limited to 15% and 150 days without congressional approval, it signals that tariffs remain a central tool of U.S. economic policy and that additional trade actions are likely.