WASHINGTON, D.C. — Consumers and U.S. businesses are expected to bear much of the cost of President Donald Trump’s newly announced 15% global tariff, imposed under Section 122 of the Trade Act of 1974, following the Supreme Court’s decision limiting his earlier tariff authority.
Trump invoked Section 122 to address what he described as balance-of-payments deficits. The temporary tariff can remain in effect for 150 days unless extended by Congress. The move comes after the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act did not grant Trump broad authority to impose tariffs, citing the major questions doctrine.
The Yale Budget Lab estimated that before the Court’s ruling, consumers faced an effective tariff rate of 16%. That rate dropped to 9.1% after the ruling but rose again to 13.7% once Trump imposed the Section 122 tariffs. Researchers projected the new tariffs would cost the average U.S. household between $600 and $800.
Alan Wolff of the Peterson Institute for International Economics noted that no previous president has used Section 122 to impose broad global tariffs and said the expiration requirement could create political challenges.
Treasury Secretary Scott Bessent said the administration would rely on alternative legal authorities, including Sections 232 and 301, to restructure import taxes.
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