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, negotiations, and the invalidation of certain tariffs by the Supreme Court of the United States, the overall average effective tariff rate was 12.1% as of July 21, 2026. The items most affected by the tariffs are metals, items mostly made of metal, and vehicles.
Although the Constitution of the United States grants Congress the sole authority to levy taxes—including tariffs—since 1930, Congress has passed laws allowing the president to impose tariffs unilaterally for national security reasons.
Under Section 232 of the 1962 Trade Expansion Act, Trump raised tariffs on cars, steel, aluminum, copper, and related derivative products as high as 50%. New tariffs on large-scale batteries, cast iron and iron fittings, plastic piping, industrial chemicals and power grid and telecom equipment are under consideration.
In April 2025, Trump also claimed unprecedented authority under the International Emergency Economic Powers Act (IEEPA) to impose Liberation Day tariffs of at least 10% on goods from nearly all countries. Trump also used the law to impose punitive tariffs against several countries and to order the early closure of the de minimis exemption. In February 2026, the Supreme Court ruled the IEEPA tariffs illegal in the case Learning Resources, Inc. v. Trump. The government collected an estimated $166 billion in IEEPA tariffs from more than 330,000 businesses that was required to be refunded.
After the decision of the Supreme Court, Trump announced a global tariff of 10% under Section 122 of the Trade Act of 1974, to remain in effect for 150 days, until July 24, 2026. After a lawsuit, the United States Court of International Trade ruled that these tariffs are also illegal and the case is being appealed.
Trump invoked Section 301 of the Trade Act of 1974, which allows the USTR to investigate and penalize foreign trade practices deemed unfair, to impose or threaten tariffs on goods produced using forced labor in 60 countries. He also used Section 338 of the Tariff Act of 1930 (Smoot–Hawley) to impose tariffs of 50% on motor vehicles, dairy, and alcohol imports from Canada, not presently effective.
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. Studies have shown that the tariffs have increased expenses and reduced earnings for companies, and have increased costs for households. The promised growth in manufacturing jobs has not been realized. Corporate bankruptcies increased to the highest level since 2010. However, although many economists predicted slower growth and even a possible recession due to the tariffs, US GDP has continued to grow. This was partially attributed to Trump's backtracking on the initial high tariff rates. There has also been no definitive indication of a significant aggregate effect on the labor market so far; however, industries most exposed to tariffs show some signs of weakness relative to the pre-2025 trend.
Background
During the 1990s and 2000s, globalization and international trade expanded as improvements in communications and shipping technology made offshoring more feasible and trade deals reduced tariffs and other barriers to commerce. Although the aggregate gains to the United States were substantial, the benefits 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 2008 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 (NAFTA) as the United States–Mexico–Canada Agreement (USMCA) and recommitted to 0% tariffs on most products traded between the three countries. 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. Citing President William McKinley and his legislation on tariffs on multiple occasions, Trump would use the example to emphasize his perceived benefits from tariffs.
In April 2025, Trump suggested tariff revenues could eventually replace income taxes, at least for those making less than $200,000 per year. Economists disagreed; the Tax Foundation deemed the idea "mathematically impossible".
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.
Section 232 tariffs
Section 232 of the Trade Expansion Act (TEA) 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 ordered a probe into copper imports in February 2025.
In March 2025, the US imposed 25% tariffs on all steel and aluminum imports, including and derivative products, aiming to strengthen domestic production; in 2023, the US imported 44% of its aluminum and 26% of its steel, mostly from Canada. The measures expanded Trump's first-term steel and aluminum tariffs by eliminating all exemptions and raising the aluminum tariff from 10% to 25%. Trump also mandated that steel be "melted and poured" and aluminum "smelted and cast" in the US to qualify for duty-free status to prevent tariff circumvention.
In April 2025, aluminum tariffs were expanded to include empty aluminum drink cans and canned beer.
Tariffs on steel and aluminum imports were increased to 50% in June 2025, with the exception of tariffs on imports from the UK, which remained at 25%. On June 12, 2025, the White House expanded steel tariffs to include many major household appliances, effective on June 23.
In July 2025, Trump announced a 50% tariff on copper imports, effective August 1, 2025. Later that month, Trump clarified that the tariffs would not apply to cathode copper; most of the copper imported to the US is cathode copper from Chile.
The steel and aluminum tariffs were expanded to include 407 additional products in August 2025.
In April 2026, Trump clarified the tariffs on metals as follows: Articles made entirely or almost entirely of aluminum, steel, or copper will pay a flat 50% on their full value — for example, steel coils and aluminum sheet.
Derivative articles substantially made of steel, aluminum, or copper will pay a flat 25% on their full value.
Certain metal-intensive industrial equipment and electrical grid equipment will pay 15% through 2027. Products made abroad but entirely with American steel, aluminum, and copper will be subject to lower tariffs of 10%. Products made of 15% or less steel, aluminum, or copper will no longer be subject to Section 232 metals tariffs.
Automobiles and auto parts
In January 2025, Trump announced broad tariffs on Canada and Mexico, threatening the highly integrated North American auto supply chain. Due to decades of free trade agreements including USMCA, factories in the US, Canada, and Mexico were accustomed to shipping auto parts back and forth multiple times during the manufacturing process. The Big Three automobile manufacturers lobbied for exemptions, warning the tariffs would hurt American companies more than foreign competitors. Trump agreed to delay tariffs on USMCA-compliant vehicles. Non-USMCA compliant brands manufacturing in Canada or Mexico, such as BMW, were affected starting March 4, 2025.
In April 2025, Trump imposed a new 25% tariff on all imported cars, including those from Mexico and Canada; car prices were expected to increase.
While the 25% tariff extended to auto parts in May 2025, Trump exempted parts made in Mexico or Canada that were compliant with the USMCA. In April 2025, he exempted carmakers that pay a 25% on imported cars from paying other tariffs, such as those on steel and aluminum, and provided a rebate on a proportion of tariffs paid for the next two years.
Solar panels from Southeast Asian countries
In April 2025, in support of American manufacturers complaining of dumping and subsidies, the Commerce Department furthered plans first issued by the Biden Administration to tariff Chinese solar panel makers with factories in Malaysia, Cambodia, Vietnam, and Thailand. Proposed tariff rates ranged from 41% to 3,521% in the case of Cambodia because its producers did not cooperate with the US investigation.
In February 2026, the Commerce Department announced tariffs on solar cells and panels imported by companies in India, Indonesia and Laos to counteract subsidies offered by those countries.
Lumber and furniture
In September 2025, Trump announced 10% tariffs on imports of softwood timber and lumber. He also announced 25% tariffs on kitchen cabinets, bathroom vanities, and upholstered furniture effective October 14.
Also in September 2025, Trump announced tariffs on large trucks, kitchen cabinets, bathroom vanities, and upholstered furniture, to begin on October 1.
Pharmaceuticals
In April 2025, the United States Department of Commerce initiated a Section 232 investigation into pharmaceuticals, including "both finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items."
In September 2025, Trump announced, effective on October 1, 2025, a 100% tariff on "any branded or patented" pharmaceutical product, unless the companies were "breaking ground" or had "under construction" pharmaceutical manufacturing plants in the US. The tariff was expected to have limited impact because most large drug manufacturers already had or were building American facilities. Trump also agreed to honor previously negotiated trade deals that capped pharmaceutical tariffs at 15%. Following the announcement, several large branded pharmaceutical companies announced or accelerated U.S. manufacturing investments to qualify for tariff exemptions tied to domestic production.
In December 2025, the UK secured a 0% tariff on its pharmaceutical and medical technology exports in exchange for a commitment to invest more money into the US. The country also pledged to spend around 25% more in new and effective treatments, the first major increase in over two decades.
Semiconductors
In April 2025, the Department of Commerce initiated a Section 232 investigation into "imports of semiconductors and semiconductor manufacturing equipment."
In January 2026, Trump issued 25% tariffs on a narrow range of semiconductor imports, primarily advanced computing chips, including the Nvidia H200 and the AMD MI325X, with the exemption of chips imported to support the buildout of the U.S. technology supply chain or to bolster domestic manufacturing capacity for derivatives of semiconductors. Semiconductors used for data centers, research and development, and non-data center consumer applications are exempted.
Country-specific tariffs implemented under Section 301 of the Trade Act of 1974
Trump imposed tariffs under Section 301 of the Trade Act of 1974, which allows the President to modify imports to penalise foreign trade practices deemed unfair if the Secretary of Commerce conducts an investigation and holds public hearings.
Under the law, the U.S. imposed phased-in tariffs on imports from Nicaragua that do not qualify under the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR). The tariff rate is 10% in 2027 and 15% in 2028. The tariffs "address Nicaragua's acts, policies, and practices related to abuses of labor rights, abuses of human rights and fundamental freedoms, and dismantling of the rule of law".