The anniversary

On 2 April 2025, President Trump signed Executive Order 14257, imposing sweeping reciprocal tariffs on nearly every trading partner. He called it Liberation Day. One year later, the policy has been rewritten by courts, challenged by markets, and debated by economists with no consensus on whether it achieved its goals.

Why it matters: The tariff regime touches almost every imported good Americans buy. According to the Yale Budget Lab, the average household faces an additional $1,500 in costs this year, and between 650,000 and 875,000 more people could fall below the poverty line.

What the courts did

The Supreme Court ruled 6-3 in February 2026 that the International Emergency Economic Powers Act does not authorise tariffs. The decision required the government to refund roughly $166 billion to importers — more than the $151 billion it had collected — leaving the Treasury net negative on its original tariff strategy.

Within 96 hours, the administration pivoted. It invoked Section 122 of the Trade Act of 1974, the “balance of payments” authority, to impose a new 10 per cent global tariff. Additional duties on steel, aluminium, and copper were restructured under Section 232.

The economic scorecard

The administration claims the goods trade deficit fell 24 per cent between April 2025 and February 2026, and that private sector wages grew by more than $1,400 per worker on average.

Critics point to different numbers. According to the National Taxpayers Union, US manufacturing shed roughly 100,000 jobs from January 2025 to April 2026. The goods trade deficit hit an all-time high in calendar year 2025, with imports rising 4 per cent to $3.4 trillion.

The effective US tariff rate stands at 11 per cent, the highest since 1943. The tariff schedule has changed more than 50 times since Liberation Day — suspensions, reversals, new duties, and exemptions.

What happens next

The Section 122 tariffs face their own legal challenges, with trade groups arguing the balance-of-payments justification does not apply to the current economic situation. The first hearings are expected this summer. Meanwhile, several trading partners have filed complaints with the World Trade Organisation, though WTO rulings take years to enforce.