This executive order was passed to address trade deficits between the United States and its trading partners. The basis for the order includes a lack of reciprocity in bilateral trade relationships, and disparate rates and non-tariff barriers between the United States and its trading partners. The order imposes additional duties on imports starting at 10%, with higher duties on specified trading partners. This order (section 3(b)) has exceptions to its rates, including imports from Canada and Mexico which will continue to be subject to separate tariffs for those countries and products that are subject to section 232 of the Trade Expansion Act of 1962 (products that pose a national security threat).

This executive order, as well as Executive Orders 14193, 14194, 14195, 14197, 14198, 14200, 14226, 14227, 14228, 14231, 14232, 14256, 14259, 14266 and 14298, have been challenged, and the Court of International Trade (a federal court) enjoined enforcement of all of these executive orders. The United States Court of Appeals for the Federal Circuit stayed the lower court’s injunction. Executive Orders 14257, 14259, 14266 and 14298 deal with worldwide tariffs. The others were promulgated to deal with narcotics trafficking from Mexico, Canada and China. On August 29, 2025, the United States Court of Appeals for the Federal Circuit affirmed the decision of the Court of International Trade that the trafficking and worldwide tariffs imposed by those executive orders exceed the president’s authority and are invalid as contrary to law. It did not rule upon executive orders on tariffs that were issued after those set out above. The Court of Appeals stayed enforcement at its ruling until Oct. 14, 2025 to give the parties time to file a writ of certiorari in the U.S. Supreme Court.

On Feb. 20, 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act, 50 U.S.C. §§1701-1706 does not authorize the president to impose tariffs on imported goods (Learning Resources, Inc. v. Trump). The decision effectively invalidates the sweeping “reciprocal tariffs” and “drug trafficking tariffs” that President Trump began to impose in early 2025 on imports from virtually every U.S. trading partner. For more information, please see our client alert here.