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Trump could impose tariffs on day one, with few checks on that power

Donald Trump clapping his hands at a rally.
NATIONAL HARBOR, MD, USA- February 24, 2024: Donald Trump speaks at a campaign event. Shutterstock / Jonah Elkowitz

President-elect Trump has suggested that he will impose a wide-range of tariffs when he takes office, including a blanket tariff of 10–20% on all imported goods, an additional tariff between 60 and 100% on Chinese goods, a 100% tariff on countries within the BRICS alliance if they attempt to undermine the U.S. dollar’s status as a global reserve currency, and a 25% tariff on all products imported from Mexico and Canada. Notably, he wants to impose at least some of these tariffs on day one. Can he impose tariffs that quickly? Potentially, yes.

The executive branch has an unusually broad menu of options when it comes to tariffs—the president is able to dictate tariff rates, which countries and goods they apply to, and when and how to impose them without Congressional approval and sometimes without public input or judicial review. We can’t think of another economic policy issue where the executive has so much power and escapes the checks and balances that apply elsewhere to executive branch actions. This is a choice made by the U.S. Congress. 

To be clear, we—like most economists—have a dim view of unilateral tariffs. Tariffs increase the cost of consumption for domestic consumers, and they inefficiently shift economic activity towards sectors where production is more expensive. Moreover, tariffs often provoke retaliation from our trading partners and escalate into trade wars. Putting the economic issues aside, the proposed tariffs by the president-elect raise procedural and institutional questions about whether and how the executive branch should have the authority to unilaterally impose tariffs, and how quickly it can act. 

Without meaningful reform, unchecked tariff authority has the potential to destabilize economic and diplomatic relationships.

The power to impose taxes, including tariffs, unequivocally resides with Congress according to the U.S. Constitution. This authority is essential for funding government operations, such as national defense, public services, and infrastructure. The development of tax legislation—jointly managed by the House Ways and Means and Senate Finance Committees—is a process that ideally includes careful study and public debate and can take months or even years. This means that the legislative process cannot realistically impose new taxes on day one of a new administration.

Tariffs are unusual in that they are a tax that is not implemented by congressional legislation, and thus circumvent a potentially lengthy and deliberative journey through the House and Senate. Instead, tariffs are imposed by executive branch regulation—but unlike most federal regulations, tariffs avoid almost all the legislated guardrails, administrative procedures, and judicial reviews that apply to other executive regulations. This means implementing new tariffs can proceed much more quickly than other significant regulatory actions implemented by the executive branch. How fast depends on which authority Trump chooses to invoke. 

The executive branch has the authority to impose tariffs through two different processes. First, a series of Trade Acts—enacted between the 1930s and 1970s—empower the executive branch to proclaim tariff rates to protect American workers and consumers from unfair trade practices. This is the authority that empowered President Trump to impose limited tariffs on products like solar panels and washing machines during his first administration. To invoke this authority, an investigation is initiated by either the Department of Commerce or the Office of the U.S. Trade Representative to determine whether tariffs are necessary to remedy unfair trade practices. These investigations take some minimal time—including a 30-60 day notice-and-comment period that allows the public an opportunity to raise concerns—meaning that these authorities cannot realistically be used to impose new tariffs on trading partners on day one.

Instead, if President Trump wishes to impose tariffs more quickly, he will likely need to invoke the authority under the International Emergency Economic Powers Act (IEEPA) of 1977. Under the IEEA, Congress grants authority to the executive branch to address “unusual and extraordinary” peacetime threats to national security, foreign policy, or the economy. In May, 2019, President Trump threatened to use the IEEPA to implement  escalating tariffs on Mexican imports in May 2019. He withdrew this threat after Mexico committed to specific measures aimed at curbing immigration. 

Unlike tariffs enacted under the various trade acts, those imposed under the IEEPA bypass departmental reports, reviews, and public notice-and-comment periods. This streamlines implementation but bypasses essentially all regulatory checks and balances. The IEEPA’s speed makes it a likely tool for imposing new tariffs on day one. However, this path also raises legal questions, as seen in 2019, when skepticism emerged over its appropriateness for tariffs on Mexican imports. These criticisms are likely to resurface if the IEEPA is again invoked to justify now-broader tariffs on Mexican and Canadian imports. 

To restore the balance of power, Congress could consider reforms to restore oversight and accountability in trade policy. In a new research brief, we trace the evolution of executive authority in determining tariff rates, highlighting how this authority bypasses the rigorous process that is already in place to provide a check on executive authority to impose other regulations, and we outline what options are on the table to restore oversight. While several bipartisan legislative efforts to address this imbalance have surfaced, they have gained little traction. Without meaningful reform, unchecked tariff authority has the potential to destabilize economic and diplomatic relationships. As the threat of sweeping, unilateral tariffs looms, the need for a more balanced and accountable system has never been more urgent.

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