Trump administration reimposes global tariffs under Section 122

After a U.S. Supreme Court decision in February 2026 struck down earlier emergency tariffs, the Trump administration invoked Section 122 of the Trade Act of 1974 to impose a 10 percent tariff on most imports from all trading partners, later raising it to the statutory maximum of 15 percent. The administration argues the duties address a “balance‑of‑payments” deficit, citing trade imbalances and a declining net international investment position.

Legal scholars and economists contend that the cited indicators do not meet the original intent of Section 122, which was designed for monetary emergencies under the Bretton Woods system. The Court of International Trade ruled on May 7, 2026 that the tariffs are unlawful for relying on trade deficits rather than a qualifying balance‑of‑payments crisis, a decision the administration is appealing. The move has sparked criticism from foreign governments and business groups, who warn of supply‑chain uncertainty and reduced confidence in the United States as a reliable trading partner.