How the Current U.S. Tariff System Works: A Complete Guide

How Does the Current U.S. Tariff System Work?

The U.S. tariff system currently operates through four overlapping authorities: MFN base duties set by the Harmonized Tariff Schedule, Section 232 national security tariffs on specific products (steel, aluminum, autos, copper, lumber, semiconductors), Section 301 tariffs on Chinese-origin goods, and a 10% Section 122 surcharge on most imports from all countries. Each authority has different legal foundations, different product and country scopes, and different expiration timelines.

What Changed After the Supreme Court Struck Down IEEPA Tariffs?

On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. This invalidated all IEEPA-based tariffs, including the country-specific reciprocal tariffs, fentanyl-related tariffs on China, Canada, and Mexico, and tariffs linked to India's Russian oil purchases. Within hours, the administration imposed a 10% Section 122 surcharge as a replacement, and announced new Section 301 investigations to establish more durable tariff authority.

The current U.S. tariff system is the product of rapid policy shifts over the past 14 months. Since January 2025, importers have navigated new tariffs imposed under IEEPA, multiple rounds of Section 232 expansion, IEEPA tariff negotiations with dozens of countries, the Supreme Court invalidation of IEEPA authority, and the transition to Section 122 as a bridge tariff. The Yale Budget Lab estimates the overall effective tariff rate at 10.5% under the current Section 122 regime, the highest since 1943 (excluding 2025).

Understanding how each authority works, which products and countries it covers, and how the layers interact is essential for accurate duty calculation.

Last updated: March 2026

The Four Tariff Authorities Explained

Authority 1: MFN Base Duty (Harmonized Tariff Schedule)

The foundation of U.S. tariffs. Every imported product is classified under a 10-digit HTS code, and the corresponding Column 1 (General) duty rate applies. These rates were set through decades of trade negotiations under the WTO and range from 0% to 30%+ depending on the product.

MFN rates apply to all WTO members. Non-WTO countries face higher Column 2 rates. Products covered by Free Trade Agreements (KORUS, USMCA, etc.) may qualify for reduced or zero rates.

Authority 2: Section 232 (National Security Tariffs)

Section 232 of the Trade Expansion Act of 1962 authorizes tariffs on imports that threaten national security. The Commerce Department investigates, and the President decides on action.

Product	Rate	Scope
Steel	50%	All countries, all steel products and derivatives
Aluminum	50%	All countries, all aluminum products and derivatives
Autos/parts	25%	All countries (reduced to 10-15% for deal countries)
Copper	50%	All countries, semi-finished and intensive derivatives
Lumber/timber	10-25%	All countries (including USMCA)
Semiconductors	25%	All countries, narrow scope (advanced computing chips)

Section 232 tariffs were not affected by the Supreme Court ruling. They remain the most durable tariff authority in the current system, with no statutory expiration.

Authority 3: Section 301 (Unfair Trade Practice Tariffs)

Section 301 of the Trade Act of 1974 authorizes tariffs in response to unfair trade practices. Existing Section 301 tariffs target Chinese-origin goods at rates of 7.5% to 100%.

In March 2026, USTR launched new Section 301 investigations targeting 16 economies (including India, the EU, Japan, South Korea, and others) for excess manufacturing capacity, and 60 economies for forced labor practices. These investigations are designed to replace the invalidated IEEPA tariffs with Section 301 tariffs that have no statutory rate cap or duration limit.

Authority 4: Section 122 (Temporary Import Surcharge)

Section 122 of the Trade Act of 1974 authorizes temporary tariffs to address balance-of-payments deficits. The current 10% surcharge was imposed on February 24, 2026, and expires after 150 days on July 24, 2026, unless extended by Congress.

Key features of Section 122:

Applies uniformly to all countries (no country-specific rates)
Does not stack with Section 232 (Section 232 takes primacy)
Does stack with Section 301 (Chinese goods face both)
USMCA-qualifying goods are exempt
Statutory maximum rate is 15% (currently at 10%)
Maximum duration is 150 days without congressional extension

How All Tariff Layers Interact

The interaction between tariff authorities follows a hierarchy. This table shows the effective tariff stack for common import scenarios:

Scenario	MFN	Section 232	Section 301	Section 122	Total Additional
Chinese consumer goods (List 4A)	Varies	N/A	7.5%	10%	17.5% + MFN
Chinese industrial machinery (List 1)	Varies	N/A	25%	10%	35% + MFN
Chinese steel	Varies	50%	25%	N/A (232 primacy)	75% + MFN
Chinese EVs	Varies	N/A	100%	10%	110% + MFN
Indian textiles	Varies	N/A	N/A	10%	10% + MFN
Canadian goods (USMCA)	0% (USMCA)	N/A	N/A	0% (USMCA exempt)	0%
Canadian steel	Varies	50%	N/A	N/A (232 primacy)	50% + MFN
South Korean autos	Varies	15% (deal rate)	N/A	N/A (232 primacy)	15%
EU industrial goods	Varies	N/A	N/A	10%	10% + MFN

GingerControl's Tariff Calculator covers the full U.S. tariff stack across all four authorities. Enter any HTS code and country of origin to see every duty layer with a transparent breakdown.

What Happens When Section 122 Expires?

Section 122 expires July 24, 2026. The administration has outlined a two-track strategy:

Section 301 investigations: New investigations launched in March 2026 are designed to produce country-specific tariffs based on unfair trade practices. These investigations could result in rates similar to the invalidated IEEPA reciprocal tariffs, but with stronger legal grounding.
Section 232 expansion: Active and pending Section 232 investigations (pharmaceuticals, critical minerals, aircraft, drones, robotics) could expand product coverage and provide additional durable tariff authority.

If Congress does not extend Section 122 and no replacement tariffs are in place by July 24, the only additional tariffs in effect would be Section 232 (product-specific) and Section 301 (currently China-only, but potentially expanded). For countries not subject to either, the tariff rate would revert to MFN base rates only.

GingerControl is a trade compliance AI platform that helps importers, exporters, and customs brokers classify products, simulate tariff costs, and track policy changes. The Tariff Calculator is updated as tariff authorities change, providing date-sensitive calculations that reflect the rules in effect for any given entry date.

FAQ

What is the overall effective tariff rate in the U.S. right now?

The Yale Budget Lab estimates the overall effective tariff rate at 10.5% under the current Section 122 regime, the highest since 1943 excluding the IEEPA period. Before the IEEPA tariffs were struck down, the rate was 14.3%, the highest since 1939.

Are the bilateral trade deals still valid after the Supreme Court ruling?

The administration has stated its intent to honor legally binding Agreements on Reciprocal Trade. However, since these deals were structured around IEEPA tariff rates, their implementation is uncertain. Section 232-based deal terms (e.g., reduced auto tariffs for South Korea) remain in force because Section 232 was not affected by the ruling. Section 301 and Section 122 may serve as the legal basis for implementing remaining deal commitments.

Which tariff authority is permanent?

Section 232 tariffs have no statutory expiration. Section 301 tariffs must be reviewed every four years but can be renewed indefinitely. Section 122 expires after 150 days. MFN rates change only through trade negotiations or congressional action. Of the current additional tariff layers, Section 232 is the most durable.

What tariffs does a "typical" import face?

For a non-strategic product from a non-China, non-FTA country (e.g., manufactured goods from India or the EU), the typical stack is: MFN base rate (0-6% for most manufactured goods) + 10% Section 122 surcharge = 10-16% total. Products covered by Section 232 face much higher rates (25-50%).

How can I calculate my specific tariff rate?

You need three inputs: (1) your product's 10-digit HTS code, (2) the country of origin, and (3) the entry date. GingerControl's Tariff Calculator takes all three inputs and returns the complete duty stack, including MFN, Section 232, Section 301, Section 122, and any applicable bilateral deal rates.

Navigate the Tariff System

The current U.S. tariff system has more overlapping authorities and stacking rules than at any point in modern history. GingerControl's Tariff Calculator cuts through the complexity with transparent, date-sensitive calculations across all four tariff authorities for 200+ countries. Try it free →

GingerControl is not just a tool. We work with importers and trade compliance teams on process consulting, digital transformation strategy, and end-to-end custom system development. Talk to our team →

References

[REF 1] Yale Budget Lab — State of Tariffs: March 9, 2026 Data cited: Overall effective tariff rate of 10.5%, highest since 1943, Section 122 expiration analysis Source: Yale Budget Lab Published: March 9, 2026

[REF 2] White House — Section 122 Fact Sheet Data cited: 10% surcharge, 150-day duration, USMCA exemption, Section 232 primacy Source: White House Published: February 20, 2026

[REF 3] Holland & Knight — USTR Section 301 Investigations Data cited: 16 economies targeted for excess capacity, 60 for forced labor, April 15 comment deadline Source: Holland & Knight Published: March 2026

[REF 4] White & Case — Section 122 Tariff Analysis Data cited: Section 122 structure, Annex II exceptions, bilateral deal interaction Source: White & Case Published: February 2026

[REF 5] CRS — Presidential 2025 Tariff Actions Timeline Data cited: Complete timeline of tariff actions, bilateral deals, Section 232 investigations Source: CRS R48549 Published: 2026

[REF 6] Penn Wharton Budget Model — Effective Tariff Rates Data cited: Product-level ETR data, USMCA claim rate at 85% Source: Penn Wharton Published: March 16, 2026