What Are Tariffs?
Tariffs are charges made to importers for buying products from certain countries. These costs are usually passed on to the ultimate consumer of these goods through higher prices. When products are raw materials, equipment or other goods not directly used by a consumer, the tariff costs take a more indirect route to the consumer. Sometimes the importer will eat some of the cost, temporarily, but the point is that tariff costs are not paid by the foreign country selling these goods, they’re paid by Americans. This makes tariffs essentially a tax.
Historically, tariffs have been used to protect domestic industries from foreign competition that’s deemed “unfair”, such as when a nation sells products at or below their cost (known as “dumping”). They can also be used to counter a tariff imposed by another country or as a tool of foreign policy to pressure a foreign government to do something.
Can the President Impose a Tariff?
The Constitution gives Congress the power to levee tariffs, but since the 1930s they have delegated some of these powers to the President, subject to specific conditions. These laws are designed to enable the President to react to serious threats from foreign countries, typically involving trade or economics. One of these is the International Emergency Economic Powers Act of 1977 which has never been invoked, until 2025 when President Trump did so. There are generally four other laws that address tariff powers assigned to the President.
When the President has the authority (given or assumed) to impose a tariff, it can be changed or repealed at their discretion. This flexibility allows the President to change or remove tariffs as dynamic market conditions dictate, for maximum effect. But it also enables tariffs to be used capriciously or for reasons other than the nation’s interests, the grounds Congress used to bestow this power to begin with.
Why Did Trump Levee These Tariffs?
“The president and his advisers say their goal is to make the tariffs so painful that they force companies to make their products in the United States.” They have also described tariffs as “an all-purpose tool to extract concessions from other countries… to “rake in huge sums of revenue that the government can use to pay for domestic tax cuts.” (NYT July 28. 2025)
As it turns out, balancing trade or even raising money for the government may not be the reason Trump imposed these tariffs. The real reason for the tariffs may be to give Trump control over others, and use this control to extract (or extort) favors and money from them. According to the democratic activist group Indivisible, “These tariffs are designed to inflict pain — on consumers, on businesses, on entire communities — so that Trump can dole out relief in exchange for obedience. He’s creating a crisis that only he can ‘solve,’ and he’s holding the economy hostage to get what he wants.”
The Democrats in Congress have accused the President of a potential conflict of interest by using the stock market increase when these tariffs were paused to make money for himself and others. However, this discussion over ‘why tariffs’ may be moot, since a Supreme Court ruling in late February.
“On February 20th, 2026, the Supreme Court decided that the President’s use of the International Emergency Economic Powers Act (IEEPA) to impose reciprocal tariffs on other countries exceeded his authority under that law and held that the IEEPA tariffs must be vacated”, according to The Budget Lab at Yale University. This could open the way for the government to refund some or all of the estimated $142 billion collected to date.
As mentioned above, there are still avenues through which the administration could impose tariffs, which Trump committed to the day after this ruling. Overall, the question of the use of tariffs by this President is far from settled, although this ruling by the Supreme Court is a significant loss for the administration.