Trump to Roll Out New Tariffs as He Refunds Old Ones
Businesses continue to pay tariffs on goods from nearly every country, even as the U.S. Treasury refunds billions in unlawfully collected duties. In May, nearly US$22 billion was reimbursed to importers, marking a historic reversal where tariff revenue flows out faster than it comes in.
American consumers should not expect relief, however. The U.S. Supreme Court struck down President Donald Trump's emergency tariffs in February, but the administration is already crafting new import duties to replace them. A temporary 10 percent global rate expires at the end of July, and White House officials have pledged to restore revenue with more durable measures.
A proposal released earlier this month, stemming from a forced labor investigation into dozens of U.S. trading partners, is seen as the first step. According to Bloomberg Economics, if implemented as expected, these new levies would raise the average U.S. tariff rate by 0.6 percentage points to about 11 percent. That is below the 13.5 percent rate under the reciprocal tariffs, but several other investigations are underway to expand presidential tariff powers.
The U.S. Trade Representative has proposed duties on goods from Brazil under Section 301 of the Trade Act of 1974, targeting unfair trade practices. Another Section 301 investigation into excess capacity and production is ongoing.
Economic Impact and Consumer Sentiment
It remains unclear how quickly refunds will reach consumers, and fresh duties will hit as the U.S. economy absorbs higher costs for oil, plastics, and other goods tied to the Iran war, though an interim peace agreement was signed this week. Economic indicators flash warnings: the University of Michigan's consumer sentiment index hovers near a record low, while inflation accelerated in May to its fastest pace in over three years. Businesses have paused investments and expansions due to trade uncertainty.
RSM Chief Economist Joe Brusuelas noted that pricing pressures have not abated and will not anytime soon, citing higher energy prices and AI infrastructure costs. The new duties rest on more solid legal footing than those imposed under the International Emergency Economic Powers Act, which the U.S. customs agency and Treasury Department are currently refunding.
