Tariffs have become an increasingly important part of global trade policy and supply chain planning. For manufacturers, importers, and product developers, understanding how U.S. tariffs are created and enforced can help clarify why certain materials or components suddenly become more expensive or harder to source.
Several legal authorities allow the U.S. government to impose tariffs or import restrictions in response to trade practices, national security concerns, or economic pressures. The most used authorities today include Section 301 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962, and Section 122 of the Trade Act of 1974. Each mechanism serves a different purpose and carries its own procedures, limitations, and impacts on global trade.
Section 301 Tariffs and Trade Enforcement
Section 301 of the Trade Act of 1974 gives the U.S. Trade Representative the authority to investigate foreign trade practices that are considered unreasonable or discriminatory and that burden U.S. commerce. When such practices are identified, the government can impose remedies such as additional tariffs, quotas, or targeted sanctions.
These actions are not implemented in isolation. Section 301 investigations typically include a public comment process, administrative review opportunities, and the possibility of legal challenges through U.S. courts or the World Trade Organization.
One of the most well-known uses of Section 301 is the ongoing trade action against China. The investigation began in March 2018 and resulted in multiple tariff rounds implemented between July and September of that year. These rounds became known as Lists 1 through 3, followed later by Lists 4A and 4B. Although a Phase One trade agreement between the United States and China was signed in January 2020, most Section 301 duties remain in place today, and some have even increased.
Certain product exclusions still exist under Section 301. For example, two-layer and four-layer printed circuit boards continue to qualify for a tariff exclusion. Lithium-ion batteries that fall under List 4A increased to 25 percent on Jan. 1, 2026.
Section 301 activity continues to evolve. There is currently an open investigation into China’s compliance with the Phase One agreement. In addition, six new Section 301 investigations have been launched since January 2025. The current administration has also announced plans to pursue expedited Section 301 actions intended to replace tariffs previously imposed under IEEPA within a 150-day window.
Section 232 Tariffs and National Security
Section 232 of the Trade Expansion Act of 1962 allows the Department of Commerce and the President to restrict imports that are determined to threaten national security. Unlike Section 301, which targets unfair trade practices, Section 232 focuses specifically on the security implications of import dependence.
Under Section 232, the government can impose tariffs or quotas that are targeted by product, country, or exporter. These actions are subject to consultations and may also be challenged through the courts or through international trade dispute mechanisms.
Recent Section 232 actions have expanded significantly. Since January 2025, tariffs on steel and aluminum have increased from 25 percent and 10 percent to 50 percent and 50 percent, respectively, although some trading partners, such as the United Kingdom, remain subject to a 25 percent rate under existing trade agreements.
In August 2025, a new 50 percent tariff was introduced on semi-finished copper and certain copper derivative products. At the same time, multiple new Section 232 investigations are underway. These investigations cover a wide range of industries, including automotive products and auto parts, timber, aircraft, pharmaceuticals, semiconductors, critical minerals, drones, polysilicon, wind turbines, medical equipment, robotics, and industrial machinery.
Section 122 Tariffs and Temporary Trade Measures
Section 122 of the Trade Act of 1974 provides the President with the authority to impose temporary import surcharges or quotas when the United States faces serious balance-of-payments deficits or significant dollar depreciation. Unlike other tariff authorities, Section 122 measures are strictly limited in both size and duration.
If tariffs are applied under Section 122, they cannot exceed 15 percent and may only remain in place for up to 150 days unless Congress passes legislation to extend them. This limit is intended to ensure that the tariffs remain temporary and subject to legislative oversight.
Historically, Section 122 had never been invoked until recently. The current administration has implemented a global 10 percent tariff under this authority, with plans to increase the rate to 15 percent. These tariffs are being used to replace the previously implemented IEEPA tariffs. Certain exemptions exist under the White House fact sheet and mirror the exemptions that previously applied under IEEPA.
How Tariffs Are Applied and Stacked
One of the more complex aspects of modern trade policy is the way tariffs can overlap. In some cases, multiple tariff authorities apply simultaneously to the same product. This is commonly referred to as tariff stacking.
Under current rules, Section 232 tariffs based on material content are applied first. For example, copper content may be taxed at a 50 percent rate. After this content-based tariff is applied, additional tariffs such as Section 122 may apply to the remaining value of the product. If applicable, Section 301 tariffs may then apply to the total value.
There are currently no drawbacks or exclusion provisions for Section 232 copper tariffs. As a result, the cumulative effective duty rate can become significant depending on the materials and components involved.
Impacts on Manufacturing and Supply Chains
For manufacturers and importers, tariffs can create both financial and operational challenges. Higher tariffs on key materials such as steel, aluminum, copper, polysilicon, and semiconductors often translate into increased production costs. These costs can then cascade through supply chains and eventually raise prices for finished products.
Trade policy also introduces uncertainty. Tariff lists are revised frequently, new investigations are launched, and exclusion processes open and close over time. Changes in administration priorities can further shift the direction of trade policy, creating instability in long-term pricing strategies.
Another important factor is the payment timeline. U.S. importers are responsible for paying tariffs within approximately 12 to 15 days of importation. This can create cash flow pressures for companies importing large volumes of materials or components.
Compliance can also become complex when multiple tariffs apply simultaneously. Determining the correct duty rate may require detailed analysis of HTS classifications, value-content calculations, and customs strategies to understand the total landed cost of imported goods.
What to Watch Going Forward
Several developments could soon influence tariff policy. Businesses should watch for announcements from the Office of the U.S. Trade Representative regarding new Section 301 investigations, tariff list changes, and updates to the exclusion process. A current case before the Court of International Trade is examining the procedures required to add HTS codes to existing Section 301 investigations.
Additional decisions may also emerge from the Department of Commerce and the President regarding ongoing Section 232 investigations. These could include new product categories, expanded scopes, or additional derivative articles.
Legal and policy challenges may also shape future tariff structures. The Supreme Court of Maryland is currently hearing a case challenging the legality of the De Minimis rule based on the Supreme Court’s earlier ruling on IEEPA.
Finally, the current Section 122 tariffs are scheduled to expire on July 24, 2026. The Secretary of Commerce has indicated that the administration intends to rebuild the IEEPA tariff structure before Aug. 1, 2026.
Understanding these mechanisms and their timelines can help businesses anticipate potential cost changes and plan supply chain strategies more effectively.
Summary
Tariffs are a powerful policy tool that can influence global trade, manufacturing costs, and supply chain decisions. Authorities such as Section 301, Section 232, and Section 122 allow the U.S. government to respond to unfair trade practices, national security concerns, and economic pressures through targeted import restrictions.
As recent actions show, these measures can change quickly and may overlap, creating complex duty structures that directly affect importers and manufacturers. By understanding how these tariff authorities work and how they are applied, businesses can better anticipate cost shifts, manage compliance obligations, and make more informed sourcing and production decisions.
Key Takeaways
- The United States usesseveral legal authorities to impose tariffs, including Section 301, Section 232, and Section 122, each designed to address different trade, security, or economic concerns.
- Section 301 tariffsprimarily target unfair trade practices, most notably those related to China, and remain in effect across multiple product lists with some limited exclusions.
- Section 232 tariffsfocus on national security risks and have recently expanded to include materials such as steel, aluminum, and copper, along with investigations into additional industries.
- Section 122 tariffsare temporary measures capped at 15 percent and limited to 150 days unless Congress approves an extension.
- Multiple tariff programscan apply to the same product through tariff stacking, making compliance complex and requiring detailed analysis of HTS classifications, material content, and total landed costs for imported goods.
