Business & Economics
Trump Invokes Unused 1974 Section 122 to Impose 10-15% Global Tariffs After Supreme Court Defeat
Days after the Supreme Court voided his emergency-powers tariffs, President Trump used Section 122 of the 1974 Trade Act—never before tested in court—to slap a 10 % duty on almost all U.S. imports, pledging to lift it to 15 %.
Focusing Facts
- The 10 % blanket tariff entered into force at 00:01 a.m. ET on 24 Feb 2026 and was justified by the White House as addressing a “large and serious” balance-of-payments deficit.
- Under Section 122, any tariff above normal rates is statutorily limited to 15 % and automatically lapses after 150 days unless Congress affirmatively extends it.
- Although Trump promised a 15 % rate, the administration has so far issued an executive order only for the 10 % level, with no timetable for the hike.
Context
Presidential tariff improvisation echoes Richard Nixon’s surprise 10 % “import surcharge” of Aug 15 1971—also framed as a payments crisis during the collapse of Bretton Woods. But unlike 1971’s fixed-rate world, today’s floating dollar and deep U.S. capital markets make a classical balance-of-payments drain improbable; the capital account surplus offsets the current-account gap. Trump’s maneuver reflects a longer trend—since the 1934 Reciprocal Trade Agreements Act—of Congress delegating, then watching presidents stretch, trade powers, recently accelerated as courts curtail Chevron deference (e.g., Biden’s 2023 student-loan losses). If judges now police Section 122 as strictly as they did IEEPA, this episode could further narrow executive leeway and push tariff authority back toward Congress, reshaping U.S. trade governance for decades; or, if upheld, it could normalize broad, time-limited tariffs as a routine policy lever, reviving an early-20th-century protectionist cycle on a century horizon.
Perspectives
Left-leaning national media outlets
e.g., Washington Post, Philadelphia Inquirer — Argue the United States faces no balance-of-payments crisis, so Trump’s Section 122 tariffs are legally unsound and will likely be struck down. Coverage stresses presidential overreach and constitutional guardrails, reflecting an adversarial stance toward Trump that may minimize any genuine macro-financial vulnerabilities.
Business-focused free-market press
e.g., The Wall Street Journal, Bloomberg Law — Contends Section 122 was written for a bygone fixed-exchange-rate era and cannot lawfully support blanket tariffs, warning of economic distortion and probable court defeat. Free-trade ideology and corporate readership interests drive strong emphasis on market disruption and legal technicalities, possibly overlooking political appeal of protectionism to some voters.
Administration-aligned protectionist commentators highlighted in general coverage
e.g., AsiaOne quoting Brad Setser, NYT piece citing Busch & Trefler — Maintain that the statute was deliberately crafted to give presidents a broad tool to curb modern trade and current-account deficits, so Trump is within his rights to act. Accept the White House framing and deploy selective historical parallels, downplaying today’s floating-rate environment and the thin legal precedent to defend a politically popular tariff agenda.
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