WASHINGTON (AP) – President Donald Trump is facing challenges in replacing the revenue lost by the federal government following the Supreme Court's ruling that invalidated his major tariffs last month. According to a study released by congressional Democrats, if the administration's efforts succeed, American households could see an average increase in import taxes to $2,512 by 2026, up from $1,745 in 2025, reflecting a 44% hike. This situation unfolds amidst rising consumer dissatisfaction regarding high living costs, exacerbated by the ongoing war with Iran, which is driving up energy prices.
Senator Maggie Hassan of New Hampshire, the leading Democrat on the Joint Economic Committee, criticized the Trump administration for failing to relieve families from the financial burden of tariffs. She stated, “As American families continue to struggle with high costs, the President keeps choosing to institute new tariffs that will push prices even higher.”
In response, White House spokesman Kush Desai dismissed the Democrats' report as “phony,” emphasizing that President Trump will persist in using tariffs to renegotiate trade deals, lower drug prices, and secure significant investments for Americans. The tariffs imposed last year, invoking the 1977 International Emergency Economic Powers Act (IEEPA), targeted nearly all countries and were met with a Supreme Court ruling on February 20 that declared this approach illegal, thus obligating the government to provide refunds around $175 billion to importers impacted by the unlawful tariffs.
The administration is taking swift action to enforce new tariffs, with Treasury Secretary Scott Bessent indicating that these measures are expected to maintain virtually unchanged tariff revenues by 2026. Trump has initiated a 10% tariff under Section 122 of the Trade Act of 1974, with plans to potentially escalate it to 15%. However, these tariffs have a lifespan of only 150 days unless Congress consents to extending them, and they are currently facing legal scrutiny.
Moreover, a more robust strategy involves Section 301 of the same 1974 trade law, which empowers the president to impose tariffs due to “unjustifiable,” “unreasonable,” or “discriminatory” trade practices. Previously, Trump utilized Section 301 to impose tariffs on Chinese imports during his first term, successfully withstanding legal challenges. Recently, U.S. Trade Representative Jamieson Greer announced an extensive Section 301 investigation targeting 16 trading partners, including China and the European Union, concerning alleged overproduction and flooding of the market with goods detrimental to American manufacturers.
Greer articulated a commitment to protecting the industrial base of the United States from foreign nations exporting their excess production problems. The inquiry’s broad scope has drawn attention among trade experts, with growin expectations of a new wave of substantial tariffs. Additionally, another Section 301 investigation is planned, focusing on banning imported goods produced through forced labor, while addressing issues like digital service taxes, pharmaceutical pricing, and ocean pollution.
The Trump administration also intends to leverage Section 232 of the Trade Expansion Act of 1962, which grants the president authority to impose tariffs on goods posing national security threats. Presently, the U.S. has enacted Section 232 tariffs on steel, aluminum, and automobiles, among other products.
The report from the Joint Economic Committee asserts that the new tariffs will worsen the financial situation for American households this year, largely because tariff revenue will be collected throughout the year, in contrast to previous years when tariffs were sometimes postponed or suspended. The Democrats believe that households will bear the full weight of these tariffs, citing a Congressional Budget Office (CBO) report indicating that importers typically pass along about 70% of the tariff costs to consumers. This also allows domestic producers to raise prices due to decreased competition, leading to higher consumer costs overall.
The renewed push for tariffs by the Trump administration occurs in a context where escalating gasoline and commodity prices due to the war with Iran are already unsettling voters ahead of the upcoming midterm elections. Analysts warn that if affordability issues continue to worsen, they could significantly impact the political landscape. Trade attorney Ryan Majerus points out that the global situation may evolve drastically in the near future.
