• President Donald Trump introduced tariffs with the aim to protect United States industries and reduce the trade deficit, but they created uncertainty, raised costs for businesses and consumers.
• The tariffs have lost momentum because of Supreme Court rulings, growing opposition from Congress and transatlantic allies.
• If continued, Trump’s tariffs will become less effective as a bargaining tool and the U.S. will lose influence in global trade and businesses.

Why is Trump’s heat level FREEZING?

Answer: On April 2, 2025, Donald Trump fundamentally reshaped global trade by announcing “economic independence” for the US, imposing tariffs on every country in the world.

On April 2, 2025, US President Donald Trump imposed a 10% baseline tariff on imports from almost every country, with higher rates applied to 85 countries that exported more to the United States (U.S.) than they imported. After a 90 day pause for negotiations, country specific rates finally came into effect on August 7, 2025. For example, Vietnam, Thailand, and Taiwan were subject to tariffs of 46%, 36%, and 32%, respectively.

Trump invoked IEEPA to impose country-specific tariffs declaring that large and persistent trade deficits and a lack of reciprocity in trade relationships posed a national emergency. He calculated the tariffs by taking the trade deficit for the U.S. in goods with a particular country, dividing that by the total goods imports from that country and then dividing that number by two. The basis of this formula lacks any defensible economic basis.

In fact, Trump broke away from the formula in imposing tariffs on countries without a trade deficit, such as the UK, which was hit with a 10% tariff. Separately, he invoked Section 232 of the Trade Expansion Act of 1962 to impose product-specific tariffs on national security grounds, including tariffs on steel, aluminum, automobiles and auto parts, copper products, and certain wood products. 

Although Trump implemented the tariff policy, it never operated with stability due to its repeated revisions and exemptions, creating significant uncertainty for businesses and investors. The continuous revisions and negotiations indicate that the policy was announced before its economic, legal, and operational implications had been fully assessed, leading the Supreme Court to strike it down on February 20, 2026, resulting in the cancellation of the tariffs imposed by Trump on the basis of IEEPA. 

What is changing Trump’s heat level?

Answer: Trump’s heat level is freezing as legal setbacks, congressional opposition, public dissatisfaction, and allies such as Canada and the UK pursuing alternative trade paths weaken his tariff policy. 

The Supreme Court struck down the tariffs imposed by Trump under the International Emergency Economic Powers Act (IEEPA) on February 20, 2026, requiring the government to refund more than half of the $260 billion in tariff revenues it had collected. According to budget data, the U.S. has already paid out $81 billion in tariff refunds this fiscal year.

However, rather than abandoning his tariff agenda, Trump announced the same day imposition of new tariffs under Section 122 of the Trade Act of 1974, a 10% global tariff, which Trump announced he would raise to 15% but never formally implemented. Unlike IEEPA, Section 122 limits tariffs to a maximum of 15% and a duration of 150 days. However, the tariffs imposed under Section 122 were  struck down by the U.S. Court of International Trade on May 7th 2026.

At the same time, the administration continued pursuing tariffs under Sections 301 and 232. While Section 301 requires investigations, public comment periods, and formal determinations before tariffs can be imposed, Section 232 continues to provide a separate legal basis for product-specific tariffs on national security grounds. 

The tariffs have pushed traditional trading partners and allies away from the US, such as Canada and the UK increasingly looking to other markets and trade partners. The growing threat of U.S. isolationism is a greater concern than the direct economic impact of the tariffs themselves. At the same time, countries such as China have responded with reciprocal tariffs forcing Trump to back down, while new trade agreements such as EU–Mercosur, EU–India, and UK–India show a shift away from U.S. centred trade, weakening American influence. 

Trump’s tariff policy has also faced growing resistance within Congress. Several Republicans joined Democrats in opposing the tariffs, reflecting increasing concern that the policy is hurting American businesses, consumers, and their electoral prospects. 

Trump’s tariff policy has deepened divisions among US voters while weakening his overall public support. Public preference for free trade rose from 31% in 2024 to 46% in 2025, while support for import restrictions fell from 66% to 52%. While 78% of Republicans remain supportive of tariffs, Democrats and Independents support has declined to 24% and 37%, respectively.  While the policy strengthened Trump’s standing within the core Republican base, it has reduced broader public confidence in his trade agenda, limiting its appeal among moderate voters. 

What is driving Trump?

Answer: Trump’s tariff policy is driven by personal grudges and based on the weaponisation of trade and the unprecedented use of executive powers. 

As a businessman, Trump treats every policy and every relationship as a transaction to be weighed on a trade scale.  Also, the tariffs are motivated by personal grudges and political motives. He wanted the subservience of other countries to him in the world and for that he decided to weaponise trade. However, these aims have not been met. In fact, the dwindling of US soft power and lack of support on major issues like the Iran war are the far reaching effects of tariffs.

Even the aims of better trade deals and making the goods cheaper for customers have not materialised. Higher tariffs have increased the prices of imported goods, forcing the government to offset these increased prices through tax cuts, resulting in tariff revenues being used to finance tax relief, limiting the overall economic benefit to both the government and its citizens.

Further, the higher tariffs make the imported goods more expensive resulting in lower demand, reducing trade volumes and tariff revenues. At the same time, a stronger U.S. dollar makes American goods and services more expensive for foreign buyers, weakening exports and widening the trade deficit, which the tariff policy wanted to reduce.

Many companies such as pharmaceutical companies announced plans to invest in the U.S. after Trump introduced tariffs but in 2025, U.S. manufacturing contracted. These announcements did not lead to an overall increase in foreign investment; in fact, it fell, suggesting that the announcements created a stronger political message than a real economic impact.

The primary fallout from the tariffs in the U.S. has been business strains and higher prices for consumers. As per Goldman Sachs 55% of the tariff costs were passed on to consumers, increasing the inflation rate from 2.5% to 3% overall, imposing measurable economic and political costs. For example: The tariffs have affected the U.S. in different ways like a 20% reduction in Canadian travel to the U.S., costing the U.S. economy more than $4 billion. 

What does this mean for you?

Answer: Trump’s FREEZING tariff policy demonstrates that trade weaponisation can generate short-term political leverage, but it cannot be sustained in the long term. 

Trump’s tariff policy will become more constrained due to the Supreme Court ruling, the requirement to rely on slower legal mechanisms of Section 301, and increasing congressional resistance. The future tariffs will face greater institutional scrutiny and Trump’s discretion alone will no longer be sufficient to implement tariff policies. 

The economic costs will become more visible over time. Firms initially absorbed tariff costs, delayed price increases through stockpiling, and benefited from repeated policy reversals. As these buffers disappear, businesses will pass costs on to consumers, while continued uncertainty will discourage investment and weaken the competitiveness of U.S. exports. 

In the long term, countries will reduce their dependence on U.S. trade and will deepen trade agreements with other partners making tariffs less effective as a bargaining tool and undermining America’s central role in the global trading system.