Tariffs: How US Import Duties Work, and What 2025 to 2026 Changed
A tariff is a tax on imported goods, usually charged as a percentage of their value and paid to US Customs and Border Protection by the importer when the goods enter the country. Congress sets the base rates; specific laws let the President add more, and which laws allow that was tested in court in 2026.
US tariff policy changed more between April 2025 and September 2026 than in the decades before it, and it is still changing. This page explains the mechanism, then dates each legal change from the document that made it and measures the money from the Treasury’s own monthly statement. Every figure carries a date because many of them may not hold a few months from now.
How it works
The importer pays. When goods enter the United States, the importer of record owes the duty to US Customs and Border Protection. The rate for each product sits in the Harmonized Tariff Schedule, and most duties are ad valorem: a percentage of the goods’ declared value.
There is a base rate and there are added layers. The base, often called the most-favored-nation rate, is set through law and trade agreements. On top of it, particular statutes let the executive branch add duties for particular reasons: Section 232 of the Trade Expansion Act of 1962 for national security, Section 301 of the Trade Act of 1974 for unfair foreign practices, and Section 122 of the same act for balance-of-payments problems, capped at 15% and 150 days unless Congress extends it.
Who bears it, and what markets react to
Who ends up bearing it is a separate question. A foreign seller can cut its price, the importer can absorb the cost, or the price on the shelf can rise. The collection data below shows what was paid at the border; it cannot show that split. Where the cost reaches consumer prices, it shows up in inflation figures later, which is one route from tariffs to interest rates.
Markets move on the path, not the rate. A tariff changes expected costs and profits across whole industries at once, and the uncertainty about what comes next moves prices as much as the rate itself. That is why announcements, effective dates and court rulings each show up in index volatility.
The legal changes, dated
2 Apr 2025: Executive Order 14257. Signed under the International Emergency Economic Powers Act (IEEPA), it put an additional 10% duty on imports from all trading partners from 5 Apr 2025, with higher country-specific rates listed for many partners.
9 Apr 2025: Executive Order 14266. It suspended the country-specific rates for 90 days except for China, leaving the 10% in their place from 10 Apr 2025; as signed, the pause ran to 9 Jul 2025.
20 Feb 2026: the Supreme Court. In Learning Resources, Inc. v. Trump, decided with Trump v. V.O.S. Selections, the Court held that IEEPA “does not authorize the President to impose tariffs.” The case covered both the reciprocal duties and the earlier drug-trafficking duties on Canada, Mexico and China.
20 Feb 2026: two documents signed the same day. Executive Order 14389 said the IEEPA duties “shall no longer be in effect” and would stop being collected as soon as practicable. Proclamation 11012 imposed a Section 122 surcharge of 10% on imports, with exceptions, from 24 Feb 2026 for 150 days, through 24 Jul 2026.
4 Mar 2026: refunds ordered. A CBP notice published on 8 Jul 2026 describes a Court of International Trade order of that date telling CBP to settle entries “without regard to the IEEPA duties”, suspended two days later to give CBP time to build an automated tool for what the notice calls an “unprecedented volume and value of refunds”.
24 Jul 2026: Section 301 replaces Section 122. After 60 investigations, opened on 12 Mar 2026, into whether trading partners ban and enforce a ban on imports made with forced labor, the Trade Representative applied tariffs of 10% or 12.5% to goods of the economies found actionable, from 24 Jul 2026, with product exemptions. Section 232 duties on products such as steel and aluminum rest on a separate statute and were not part of the IEEPA case.
As of 25 Sep 2026, narrower measures sit alongside these. They include Section 232 duties on commercial aircraft, jet engines and parts (Proclamation 11040, signed 9 Jul 2026) and Section 338 duties on some products of Canada (Proclamations 11046 to 11048, signed 20 Jul 2026), changed again by proclamations published 24 Aug and 14 Sep 2026. The list above follows the IEEPA, Section 122 and Section 301 measures only.
A worked example
A hypothetical $10,000 shipment of a product from the European Union with a base duty of 2.5%.
- Before any added layer: $10,000 x 2.5% = $250 of duty.
- From 24 Feb 2026 under the Section 122 surcharge: $250 plus 10%, or $1,000 more, for $1,250 in total, unless the product fell under an exception.
- From 24 Jul 2026 under Section 301: the memorandum caps European Union goods so that the base rate and the Section 301 tariff add up to 10%. The Section 301 part is 7.5%, $750, and the total is $1,000.
- A product already carrying a base rate of 10% or more gets a Section 301 tariff of zero under that cap.
The same goods therefore owed $1,250 of duty from 24 Feb 2026 and $1,000 from 24 Jul 2026, against $250 with no added layer, without any change to the goods, which is the practical meaning of dating every tariff figure.
The original data
The data: customs duties from the Monthly Treasury Statement, January 2024 to August 2026, and goods imports from the Census Bureau’s current trade release, January 2024 to July 2026, both downloaded on 25 Sep 2026. Gross receipts are what was collected; refunds are paid back; net is the difference. The series is published as a CSV of monthly customs receipts.
Receipts more than quadrupled, then refunds arrived. Gross customs receipts totaled $86.1 billion in 2024, an average of $7.17 billion a month. They were $16.30 billion in April 2025, $22.82 billion in May and peaked at $33.09 billion in October 2025. After the ruling they eased to between $21.93 billion and $24.83 billion a month from March to August 2026. Refunds were $49.18 billion in June 2026 alone, and net receipts were negative in May, June and July 2026. For fiscal 2026 through August, gross receipts were $292.5 billion, refunds $125.2 billion and net receipts $167.3 billion, against refunds of $6.7 billion in the same months a year earlier.
Set against imports, the rise is clearer. Gross receipts were 2.56% of goods imports from January to July 2024, 5.70% in the same months of 2025 and 8.27% in 2026. That is a rough measure: the imports are seasonally adjusted and duties are paid some days after goods arrive.
The market record, by date. The S&P 500 closed at 5,670.97 on 2 Apr 2025, then fell 4.84% and 5.97% on the next two sessions, 10.53% in two days. It reached 4,982.77 on 8 Apr, 12.14% below the 2 Apr close, rose 9.52% on 9 Apr, the day of Executive Order 14266, and first closed back above its 2 Apr level on 2 May 2025. On 20 Feb 2026 it rose 0.69%, and on 24 Jul 2026 it moved 0.05%. It closed at 7,704.13 on 24 Sep 2026. The prices show what moved on each day; they cannot prove why. The closes are in a CSV of the dated sessions, and the legal steps in a CSV of the timeline.
When it fails
Reading receipts as a tariff rate fails. Customs receipts lag the goods, include duties from many laws at once and, in 2026, were offset by refunds of duties from 2025. A single month’s ratio can say more about payment timing than about policy.
Trading the announcement as the effective date fails. Executive Order 14257 was signed on 2 Apr 2025, applied its 10% from 5 Apr and published in the Federal Register on 7 Apr. The Section 122 proclamation was signed on 20 Feb 2026 and applied from 24 Feb. Each of those gaps is a window in which the rule on paper and the rule in force differ.
Assuming a tariff stays in place fails. Between April 2025 and July 2026 the same imports moved from IEEPA duties to a Section 122 surcharge to Section 301 tariffs, with a Supreme Court ruling and a refund order in between. A thesis built on one rate needs a plan for its reversal.
Assuming the importer’s cost is the consumer’s cost fails. The Treasury data measures what was collected at the border. How much of it reached shelf prices, supplier margins or company profits is a separate question the collection figures cannot answer.
And reading one day’s index move as a verdict on the policy fails. The 9.52% rise of 9 Apr 2025 came one session after a 12.14% slide, and an index move on any day carries every other piece of news from that day as well.
Related
Inflation explains how import costs can reach the prices central banks target, and the S&P 500 page sets the April 2025 slide against the index’s longer record of falls. Volatility covers how moves like those measured here are sized, and the interest rate page covers the other lever policy changes pull on stock prices.
Check the effective date and the legal authority of a tariff before reacting to the headline. The announcement, the signing, the date the duty applies and any court ruling are four different days, and prices can move on each of them.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.