Congress, the Balance of Payments, and Tariff Reform

In the wake of the February 2026 Supreme Court ruling on the legality of the International Emergency Economic Powers Act (IEEPA) tariffs, the Trump administration has used alternative authorities to reimpose tariffs, including a 10 percent global tariff under Section 122 of the Trade Act of 1974.

As written, Section 122 allows the president to impose a temporary import tariff of up to 15 percent to: (1) deal with large and serious US balance of payments deficits, (2) prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or (3) cooperate with other countries in correcting an international balance-of-payment disequilibrium. Many experts have questioned, however, whether any of these conditions apply today and thus whether the administration’s new tariffs are, like the IEEPA levies, unlawful.

This policy forum will feature a fireside chat with Representative Jimmy Panetta (D‑CA) and the Cato Institute’s Clark Packard on Section 122 and congressional tariff authorities, followed by an expert panel discussion on the legality of Section 122, whether its conditions exist today, and the role of Congress in reforming executive branch tariff authority.

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