A Tarriff by Any Other Name…Is A Tax That You Pay

Donald Trump Presenting the Countries and Assigned Percentages of Tariffs During His "Independance Day" Press Conference, April 2, 2025

Definition

Tariff (/teraf/) – Noun

1. A tax or duty to be paid on a particular class of imports or exports.

"I always say 'tariffs' is the most beautiful word to me in the dictionary. Because tariffs are going to make us rich as hell. It's going to bring our country's businesses back that left us."— Donald Trump, at a post-inauguration rally, January 2025

What a Tariff Actually Is

As most people may or may not be aware – although I am guessing that more are finally becoming aware – a “tariff” is literally a tax imposed by a government on imported goods and services, arguably designed to protect domestic industries, raise revenue, or influence foreign policy. The most important aspect of a tariff that affects consumers is that, while tariffs are ultimately paid for by importers, it always results in higher prices for those tariffed goods and services.

Tariffs During Trump’s First Term

Trump clearly thinks that tariffs are a “magic bullet” that will solve all of the United States’ financial issues.

He loves them.

During his first term (2017 – 2021), Trump utilized tariffs as a key part of his “America First” trade policy. In 2018, he imposed a 25% tariff on steel and 10% tariff on aluminum on several countries…including allies.

China was hit that same year with “Section 301” actions, initiating a trade war that subjected roughly 60% of US – China trade to duties.

Trump’s tariff actions during his first term resulted in China, the European Union, Canada, and Mexico leveling retaliatory tariffs against the US.

Trump claims the tariffs created a “great economy,” but the fact is the results increased costs for US consumers and businesses, led to retaliatory tariffs, and did significantly increase overall manufacturing jobs.

Trump’s Second Term Tariff Strategy

Fast forward to Trump’s second term.

Almost immediately upon taking office, Trump cited the International Emergency Economic Powers Act (IEEPA) and Section 232 to implement tariffs once again targeting China, Canada, Mexico, and the EU (among other countries), claiming doing so would boost domestic manufacturing.

As a result, tariffs were applied – or threatened – on a wide range of goods including automobiles, steel, aluminum, lumber, and pharmaceuticals.

In comparison to the 25% tariff he imposed on steel, aluminum, and copper imports during his first term, Trump was now levelling a 50% tariff, with importers facing a record $3.5 billion shortfall in customs bonds to cover the duties, generating 27,479 “insufficiencies” reported in fiscal 2025.

The Legal Authority Behind the Tariffs

At this point, dear reader, let’s take a moment to examine the IEEPA and Section 232 rules that Trump is using to impose these tariffs.

The IEEPA was enacted by the 95th US Congress on December 28, 1977, and signed by President Jimmy Carter. It effectively authorizes the president to:

“…regulate international commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has its source in whole or in part outside of the United States.”

“Section 232” refers to Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) that allows the president to impose tariffs or restrictions on imports if the Department of Commerce determines they threaten national security.

Here’s the thing about Section 232:

While the economic goal of using Section 232 to impose targeted tariffs, the law requires an investigation by the Commerce Department to establish that imports “threaten to impair” national security, which is the excuse Trump has cited to implement it.

While the Commerce Department did indeed initiate and complete investigations pertaining to the goods Trump wished to use Section 232 against, it can be argued that these investigations were tainted as they were heavily driven and, in some cases, directly influenced by Trump and his appointees.

Who Actually Pays for Tariffs?

When it comes to implementing tariffs – which have always been a key aspect of Trump’s “economic plan” (such as it is…) – he has consistently used the reasoning that they are necessary as part of “national security.”

Despite his claims that his tariffs have generated “$2 billion a day,” as of April 2025 they have actually generated closer to $192 million per day.

Sooooo…who actually pays for tariffs?

According to Trump, it is the countries he has imposed the tariffs against.

The reality? You do.

Analyses have found that American consumers and businesses bear nearly all (90–96%) of the costs of these tariffs as businesses turn around and raise the price of tariffed goods.

Impact on U.S. Manufacturing

The bottom line is that Trump’s love of tariffs extends from his approach to business and even people:

He craves control.

Imposing tariffs allows him to control and gain leverage over other countries, behind the guise of putting “America First” and bringing manufacturing jobs back to America.

In actuality, Trump’s strategy has undercut manufacturing, forcing employers to shed 8,000 manufacturing jobs in December 2025 nationwide, with payrolls in the sector shrinking by 72,000 positions overall between the April tariffs being imposed and December 2025.

Supreme Court Ruling

On February 20th, 2026, the United States Supreme Court, in a 6─3 decision, struck down the sweeping IEEPA-specific tariffs that Trump had imposed in a sweeping series of executive orders, ruling that Trump had exceeded the law.

This is a significant loss for Trump, who was informed of the decision by note as he was meeting with governors at the White House.

His response was typically Trumpian:

“The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the court, absolutely ashamed for not having the courage to do what’s right for our country.”

A New Strategy

It didn’t take Trump long to attack the tariff issue from a different angle, turning to Section 122 of the Trade Act of 1974 to impose new 10–15% across-the-board tariffs.

While these new tariffs are temporary (under Section 122, they can only be imposed for a period of 150 days), the Trump Administration is also leveraging Section 301 to investigate and potentially place tariffs on specific countries for “unfair trade practices.”

The Refund Question

The SCOTUS decision begs the question:

Will the Trump Administration be forced to give refunds to all affected companies?

The federal government collected more than $130 billion and may now be on the hook for refunds totaling up to $175 billion (per calculations by the Penn Wharton Budget Model).

Amidst an ever-growing list of filings for refunds, the administration has attempted to slow the process down, but was handed another defeat on March 2, 2026, when a federal court rejected their attempt, sending the next phase of the refund process to a lower court to sort out.

Trump’s Response

For his part, Trump has decided that the SCOTUS decision is not actually a loss in the end, claiming in a Truth Social post that the court had “accidently and unwittingly” given him “far more powers and strength” than before the “internationally divisive” ruling:

“I can use Licenses to do absolutely ‘terrible’ things to foreign countries, especially those countries that have been RIPPING US OFF for many decades, but incomprehensibly, according to the ruling, can’t charge them a License fee — BUT ALL LICENSES CHARGE FEES, why can’t the United States do so?”

The Strategy Behind It All

As Trump’s mentor, Roy Cohn, taught him:

Never apologize, never admit defeat, and — no matter the outcome — always declare a win to manage perception.

By: Sean Thompson

Democratic Club of Greater Tracy Member