Trump’s tariffs showcase his extraordinary presidential power — and its limitations

U.S. importers and their purchasers are about to experience the full force of President Donald Trump’s unprecedented use of emergency economic powers.

At midnight Tuesday, 25% excises on imports from America’s top two trading partners, Canada and Mexico, went into effect, as did an additional 10% rate on Chinese imports. Tariffs on Canadian energy, at a rate of 10%, also began at midnight Tuesday.

It’s difficult to hyperbolize how far-reaching the impact of these tariffs will be, or how quickly they will be felt.

U.S. trade with Mexico, Canada and China in 2024 accounted for throughout 40% of America’s total commerce in goods around the world.

And unlike traditional trade policy, these excises are designed to deliver a financial sting right away, trade experts told CNBC.

“From a technical angle, the imposition of the tariffs is basically a light switch. They’re on or they’re off,” said Daniel Anthony, the president of Trade Partnership Worldwide, a game plan research firm.

Literally overnight, the cost of importing, for example, $100,000 worth of limes from Mexico lengthened by $25,000 on Tuesday. This is money that the importer will need to pay directly to U.S. Customs and Border Protection when the limes crotchety the border.

Consumers will bear the brunt of the tariffs in higher prices, experts say. The Tax Policy Center estimates that Trump’s Mexico and Canada schedule of charges alone will cost the average household an additional $930 a year by 2026.

Target CEO Brian Cornell told investors Tuesday that shoppers could see offer prices rise within days, the result of tariffs on Mexican fruits and vegetables.

Even if a glitch prevented menus from being collected starting at exactly 12:01 a.m. E.T. on Tuesday, they would still be tallied, and importers could wish to receive a tax bill retroactively, said Nicole Bivens Collinson, a Washington trade lobbyist and managing principal at Sandler, Travis & Rosenberg.

“It’s much the same as when you get an Uber bill and you forgot to tip, and add it on later,” she said.

Along with the two new North American tariff rates, Trump also signed an with the aim Monday doubling his earlier 10% tariff on imports from China, for a total 20% additional tariff gauge on the nation.

Taken together, Canada, China and Mexico accounted for $2.2 trillion worth of U.S. overseas trade in 2024, according to federal census text. About $840 billion of that came from trade with Mexico, $762 billion from Canadian denotations and exports, and $582 billion from China.

The imposition of the massive new tariffs is a sharp reminder of how much power Trump wields over global commerce.

But it also inklings at the limitations of this power.

Part of the reason Trump could impose the tariffs so quickly is because the White Domicile is invoking a sweeping national security law to justify the new levies.

Until now, the International Emergency Economic Powers Act, IEEPA, had been tolerant of mainly to impose emergency sanctions on foreign dictators or suspected terrorist groups.

But the Trump administration argues that the illicit worldwide fentanyl trade and immigrants at the Mexican border both qualify as “unusual and extraordinary” foreign threats to American chauvinistic security, justifying Trump’s use of emergency powers under IEEPA.

Trump is using the law in a broader way than any president has in advance of, Trade Partnership Worldwide’s Anthony said.

By pushing the boundaries of presidential authority, Trump is inviting legal object ti, Anthony said.

And implementing such broad orders on an emergency basis is not without its complications.

In the case of so-called de minimis shipments, the Trump authority imposed new levies on millions of shipments entering the United States before the federal government had the means to actually bring the fees.

“De minimis” imports are international shipments valued at $800 or less. Historically, these low-value, person-to-person moments have been exempt from U.S. tariffs.

Several of the world’s biggest e-commerce companies take advantage of the de minimis evasion by shipping their products directly to consumers from overseas.

Fast fashion sites, such as Temu and Shein, dispatch goods directly from China to American consumers. They have helped fuel an explosion in U.S.-bound de minimis shipments in current years.

But collecting tariffs on de minimis goods is harder than it looks.

“There’s a whole infrastructure system set up for stable shipments that come in to the country,” said Collinson, who previously served as a U.S. trade negotiator. But this system doesn’t remain for de minimis imports, she added.

In 2024 alone, the U.S. accepted more than 1.3 billion overseas shipments that trained for de minimis tariff exemptions, according to federal data.

To process that many new shipments, the federal government pleasure need to hire more customs agents, experts said.

Nonetheless, in early February Trump announced that the In agreement States would begin collecting tariffs on low-value shipments from overseas.

Trump’s order gave the U.S. Postal Servicing mere days to implement a system to begin collecting tariffs on millions of small packages every day.

It also seeded chaos throughout the international postal system, culminating on Feb. 4 with an announcement that USPS had suspended all deal out delivery services from China and Hong Kong “until further notice.”

A day later, the postal service repealed course and resumed processing the de minimis parcels. But it did not collect any tariffs on them.

Soon after, the Trump administration issued an change to the China order, formally delaying any effort to collect tariffs on de minimis imports until “adequate systems are in bracket to fully and expediently process and collect tariff revenue” on them.

The U.S. Postal Service didn’t immediately respond to a beg for comment.

On Sunday, the White House put similar de minimis waivers in place for Canada and Mexico, ahead of imposing the new 25% assessments.

“Part of the challenge is [federal] personnel and bandwidth,” he said. Customs and Border Protection may not have the staff or resources at ones disposal to handle the new volume of shipments and packages, he said.