The administration said the United States faces “large and serious balance-of-payments deficits” that threaten investor confidence, financial markets and the country’s ability to finance spending. Officials pointed to a persistent goods trade deficit of about $1.2 trillion in both 2024 and 2025, alongside a widening current account deficit equivalent to 4.0 per cent of GDP.
US President Donald Trump has imposed a temporary 10 per cent global import surcharge effective February 24, 2026, citing large balance-of-payments deficits.
The measure, authorised under section 122 of the Trade Act, will remain for 150 days unless extended.
Several sectors, including energy, pharmaceuticals, vehicles and select FTA-linked textile imports, are exempt.
According to the proclamation released by the White House, senior advisers concluded that “fundamental international payments problems within the meaning of section 122 exist and that special import measures to restrict imports are required to address these problems.” The President determined that a surcharge in the form of ad valorem duties is necessary to counter the imbalance and stabilise external accounts.
The White House highlighted that the United States’ balance on primary income turned negative in 2024 for the first time in decades, weakening a traditional buffer against trade deficits. In addition, the country’s net international investment position deteriorated sharply to negative 90 per cent of GDP by end-2024, reinforcing concerns over external sustainability.
Invoking section 122 of the Trade Act of 1974, Trump authorised a 10 per cent duty on most imported goods, stating the action is “required to deal with the United States’ large and serious balance-of-payments deficit.” The surcharge will apply in addition to existing tariffs and will be treated as a regular customs duty.
However, the proclamation outlines a wide range of exclusions reflecting domestic supply constraints and strategic considerations. Exempt categories include critical minerals, energy products, pharmaceuticals, selected electronics, aerospace goods and vehicles. Duty-free imports under the US-Mexico-Canada Agreement and textile and apparel goods qualifying under the Dominican Republic-Central America Free Trade Agreement are also excluded.
The administration emphasised that the action is not intended to shield specific domestic industries but to address macroeconomic imbalances. “Restricting imports through the surcharge imposed in this proclamation is required to address the fundamental international payments problems,” the document stated.
The United States Trade Representative has been tasked with monitoring economic conditions and the impact of the surcharge, with authority to recommend suspension, modification or termination before the July 24 expiry date.
The move marks one of the most sweeping US trade interventions in recent years and is expected to trigger strong reactions from trading partners and global markets, particularly given its near-universal scope.
Fibre2Fashion News Desk (RKS)
