Trump’s New Tariffs: What to Know

In February, when the Supreme Court struck down President Donald Trump’s sweeping global tariffs imposed under the International Emergency Economic Powers Act (IEEPA), some celebrated the decision as a check on the president’s penchant for tariffs. Such celebrations were premature at best.

At the time, I wrote that the court’s decision was likely to be a brief reprieve, and that we should expect the global economy to be defined by higher tariffs than existed prior to Trump. I also spelled out how the Trump administration might use other authorities which, though more time-consuming and cumbersome in process to invoke, would rest on stronger legal footing than IEEPA.

This brick-by-brick reconstruction of the great tariff wall is nearing completion. The new duties the administration has or plans to level on a broad range of imports from almost all of our major trading partners are close to those initially levied under IEEPA. But while the staying power and precise level of the current tariff policy has never been more clear, whether these tariffs are advancing the Trump administration’s stated goals remains an open question.   

Immediately after the Supreme Court’s decision, the administration imposed a 10 percent Section 122 tariff (a remedy initially intended to address balance-of-payment crises), which is set to expire a week from today on July 24. In the meantime, the administration has pursued a range of investigations under Section 232 on national security grounds and Section 301 on foreign unfair trade practices.

One Section 301 investigation recently found that sixty trading partners, including the European Union (EU), Japan, and all our major trading partners, engaged in unfair trade practices by not preventing the trade in products made of forced labor. The comment period on the proposed tariffs of 10–12.5 percent just closed, and those tariffs could be imposed at any time now.

A second Section 301 investigation targeted sixteen of the United States’ largest trading partners—China, the EU, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India—for engaging in unfair trade practices by creating excess capacity and, therefore, distorting fair competition. That investigation is ongoing, and the results are expected soon.

This is a particularly interesting investigation because, while there is a consensus that China pursues a concerted economic strategy to generate excess capacity to dominate foreign markets in sectors such as solar panels and electric vehicles, it is less obvious that other countries follow the same strategy or have the same tools at their disposal. Does the mere existence or persistence of a trade surplus in goods create a presumption that a country is generating excess capacity and engaging in unfair trade?

There are a number of other processes underway which could result in additional tariffs. For example, just this Wednesday, the Trump administration announced a 25 percent tariff on imports from Brazil under Section 301, citing unfair trading practices. There are notable exemptions for products like beef and orange juice. This tariff announcement comes after the Supreme Court invalidated the 50 percent IEEPA tariff imposed on Brazil over its treatment of former Brazilian president and Trump ally Jair Bolsonaro.

So, as expected, the administration is well on its way toward ensuring that, through a patchwork of investigations, the United States will ultimately have tariffs similar to those imposed under IEEPA. It remains an open question, however, whether the tariffs are achieving the administration’s objective of reindustrializing, increasing manufacturing’s share, and ideally increasing the number of manufacturing jobs in the U.S. economy.

Trump administration officials rightfully argue that it is likely to take time for companies to absorb the impact of the new tariff reality into their strategic planning and make the necessary investments in the United States for manufacturing to bloom. But what is the relevant timeframe? While the imposition of broad global tariffs started only with Liberation Day on April 2, 2025, the experiment with raising tariffs as a means of driving increased manufacturing and manufacturing jobs actually goes back to the first Trump administration, with the imposition of a 25 percent and 10 percent tariff on steel and aluminum imports, respectively, from around the world and a raft of additional tariffs on China. The Biden administration maintained those tariffs and added a few of their own. And the second Trump administration, of course, has gone much further.

What’s the impact thus far? Manufacturing as a percentage of GDP has fallen since Trump’s first term. In the first quarter of 2017, manufacturing accounted for 10.7 percent. Today, it accounts for only 9.4 percent of GDP. Moreover, manufacturing employment is effectively flat from January 2025 to date, and those workers’ real wages are also relatively stagnant, given the impact of inflation—to which tariffs have made some contribution.

Even if it is too early to see major changes in U.S. manufacturing, one would hope to see green shoots in the form of increased investments in the construction of factories in the United States. But the Wall Street Journal reported earlier this week that despite an increase in spending on data center construction, construction spending on manufacturing buildings is down 22 percent year-over-year—in part because of the increased costs of construction materials caused partly by, you guessed it, tariffs.

Let’s stipulate that increasing manufacturing as a share of the U.S. economy is important—for national security, competitiveness, and innovation, as well as a source of good jobs. The question remains whether, or to what degree, tariffs contribute positively to that objective—and at what price. Every policy, including tariffs, has its costs and benefits, its trade-offs. The costs of tariffs are evident now and whatever benefit they have on manufacturing might be evident only well down the road. That creates a real political challenge for the administration, particularly in the context of underlying affordability concerns: pay now, benefit (hopefully) later.

Earlier this week, I had the privilege of hearing from current U.S. Trade Representative (USTR) Ambassador Jamieson Greer, and discussing all this (and more) with former USTR Ambassador Robert Lighthizer at the Aspen Security Forum. I’d encourage you to give it a listen and let me know your thoughts. 

Let me know what you think about U.S. trade policy and what this column should cover next by replying to [email protected].

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy.