Tariffs

The issue

President Donald Trump campaigned heavily on applying tariffs to U.S. trading partners, initially proposing a universal baseline of 10% to 20% on imports from all countries and a 60% to 100% tariff on imports from China.  

After taking office, the president signaled interest in a broad range of potential tariff actions, targeting specific countries such as Canada and Mexico, as well as the European Union and industry sectors such as steel, aluminum and automobiles. On Inauguration Day, President Trump signed the America First Trade Policy Memo, outlining a series of reports intended to shape a future trade and tariff strategy. 

The administration has emphasized tariffs as a key economic and strategic tool, citing several objectives:  

• Leveraging tariffs as a negotiating tactic to bring other countries to the table 

• Encouraging companies to diversify supply chains away from China  

• Revitalizing U.S.-based manufacturing  

• Generating federal revenue  

The administration initially imposed tariffs on Canada, Mexico and China under the International Emergency Economic Powers Act because of national security concerns (fentanyl and border issues). The president then moved to implement global reciprocal tariffs under IEEPA on “Liberation Day” in April 2025 and then set final tariffs in August. The administration has concluded several frameworks and agreements on reciprocal trade and continues to negotiate with other countries.

The IEEPA tariffs were challenged in federal court and ultimately struck down by the Supreme Court on Feb. 20, 2026. The court did not address refunds of the tariffs, but shifted the decision back to the Court of International Trade to provide guidance on how companies can proceed with refund claims.

The president quickly shifted and imposed a 10% global tariff under Section 122 of the Trade Act of 1974, with an intent to increase it to 15%. The Section 122 tariffs are limited to 150 days and require a vote from Congress to renew. The administration has also discussed quickly moving to a number of new Section 301 investigations as well.

The administration continues to move forward with a number of Section 232 tariff investigations as well. They have already announced 232 tariffs on steel/aluminum, autos/auto parts, lumber/kitchen cabinets/bathroom vanities and other products. Ongoing investigations include pharmaceuticals, semiconductors, robotics and drones.

These developments remain fluid and continue to generate uncertainty for retailers and other businesses. NRF is closely monitoring the situation and remains actively engaged with policymakers as it evolves.

Why it matters to retailers

Retailers and other U.S. businesses rely on the global supply chain for imports of both component parts and finished goods to provide U.S. consumers with a wide variety of affordable everyday goods. Tariffs are taxes paid by U.S. importers and ultimately passed along to U.S. consumers. There continues to be a great deal of uncertainty regarding the ongoing tariff actions and trade policy in general. Businesses are left with the unenviable task of trying to forecast and plan their orders — particularly for the all-important holiday season each year — while trying to deal with balancing rising costs, shifting consumer demand and the possibility of long-term damage to their operations.

Small and medium-sized businesses have been disproportionately affected by the tariffs, with many saying they have had to raise prices or shut down. Unable to absorb the cost of increased tariffs, small business retailers would be forced to pass those additional costs along to their customers in the form of higher prices. One estimate suggests these tariffs could cost the average household $3,800 — squeezing budgets and reshaping spending priorities. 

NRF’s position

Retailers are committed to working with Trump and his administration to advance shared goals — including strengthening the U.S. economy, keeping inflation in check and ensuring that American families benefit from lower prices. NRF supports trade policy that holds global trading partners accountable, enhances U.S. competitiveness and protects American households from inflationary pressures on everyday goods. NRF remains committed to leading the retail industry in these critical public policy conversations.