The U.S. attack on Iran has diverted attention from the tariffs the United States has applied liberally since Donald Trump took office in January 2025. While tariffs based on the International Emergency Economic Powers Act were overturned by the Supreme Court in February, those imposed under other laws remain in place. Last week, the U.S. Trade Representative announced investigations that could lead to yet more. The Trump administration’s aggressive use of tariffs has set precedents that seem likely to affect U.S. trade policy in the future.
Ever since the first Congress convened in 1789, the United States has employed import tariffs for one of two purposes: to raise revenue — the federal government had no power to tax incomes until 1913 — and to protect specific U.S. industries. The Trump Administration has applied them for other purposes, viewing tariffs as “a powerful, proven source of leverage for protecting the national interest.” Among other actions, it imposed tariffs on Canada, China, and Mexico for allegedly facilitating the flow of fentanyl, on Brazil for “politically persecuting” its former president Jair Bolsonaro, and on countries importing Venezuelan oil. While the Supreme Court invalidated these particular measures, its ruling may not inhibit future presidents from employing tariffs to pursue non-economic goals.
In another departure from historic practice, tariff rates under Trump have changed frequently as tariffs are imposed or suspended. Some rates rose unexpectedly as new tariffs were “stacked” atop earlier ones, while other rates suddenly fell as a particular company or country reached an understanding with the United States. If tariff volatility becomes the norm, it will be far more difficult for manufacturers and retailers to sensibly plan their value chains in the future.
The third newly established precedent is the use of tariffs to force trading partners to accept “reciprocal” trade agreements. These agreements, which have been signed by countries as distant as Argentina and Indonesia, are very one-sided, imposing numerous requirements on other countries while the United States commits only to roll back tariffs it has recently increased. These agreements are unlikely to last for long as people in other countries ask why their leaders offered so many concessions and obtained so little in return.
Notably, none of the bilateral agreements to date obliges the United States or its trading partners to lower tariffs on one country’s exports if it lowers them on another’s. Commitments to such “most favored nation” treatment led the bilateral agreements of the 1930s to spur a large increase in international trade. By design, the Trump Administration’s bilateral trade agreements are unlikely to have such an impact.
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