Looking back on this year (as one does in December), there’s been an undeniably huge amount of virtual ink—from Capitolism and everyone else—devoted to U.S. tariff policy. This, of course, is perfectly understandable given the major recent changes to said policy, the tariffs’ substantial economic, political, and diplomatic implications, and the fact that a certain president can’t stop talking about all of it. Indeed, with average U.S. tariff rates now having reached historically high levels via an erratic and endless series of executive branch proclamations and trade deals (as the chart above from the Financial Times indicates), a lack of such coverage would be downright scandalous.
Nevertheless, even the best U.S. tariff analyses have typically focused on the big picture—average tariffs, big deals, major actions or exemptions—while ignoring an issue that’s just as important, if not more so, for the tens of thousands of American businesses now forced to grapple with U.S. tariffs every day: their unprecedented, crippling, and truly insane complexity.
Beginning in Trump’s first term and dramatically accelerating this year, navigating the U.S. tariff system has gone from relatively easy to mind-numbingly difficult for even the most skilled technicians and biggest corporations. For the little guys, on the other hand, it’s become virtually impossible. And the overall economic cost is likely staggering.
Charting U.S. Tariff Complexity
The chart above is admittedly cool, but by focusing on just average tariff rates, it arguably hides as much as it reveals. That’s because U.S. tariff rates aren’t just one number but instead vary widely by product, country, and the legal regime under which these taxes have been applied, and such differences—as well as how they came about—matter a lot for any U.S. business buying stuff from abroad.
During his first term, Trump applied tariffs under three rarely used statutory provisions—Section 201 (global safeguard measures on solar panels and washing machines); Section 232 (global “national security” protection for steel and aluminum); and Section 301 (targeting around half of all Chinese imports). During just the first year of Trump’s second term, he’s added even more Section 232 actions (automotive goods, copper, wood, and trucks/buses), another Section 301 action (on ships), and several rounds of tariffs under the International Emergency Economic Powers Act (global “reciprocal” tariffs; fentanyl tariffs for China, Canada, and Mexico; extra punitive tariffs for Brazil and India; and around 10 IEEPA-related trade deals). As of today, 17 different U.S. tariff measures and seven different legal regimes now apply to significant commercial volumes of imports into the United States—up from just three in 2017.
Meanwhile, the total volume of imports now subject to one or more special tariff measures (designated in “Chapter 99” of the HTSUS and covering almost all of Trump’s unilateral tariffs) went from basically nothing in 2017 to almost half of all U.S. imports as of July of this year.
Each special tariff measure comes with its own legal rules, procedures, exceptions, and reviews—brand new regulations that demand American companies’ finite time, money, and attention. Second, the specific design of Trump’s tariff measures amplifies this complexity because—again, unlike the pre-Trump era—the tariffs can vary not only by country, product, and content, but also by how these tariffs interact with each other. IEEPA “reciprocal” tariffs, for example, apply a different baseline rate for imports from dozens of countries; these tariffs are typically added (“stacked”) on top of the general HTSUS tariffs but not for certain “trade deal” countries (which have negotiated different arrangements). They also stack atop other IEEPA tariffs and Section 301 tariffs, but they usually don’t apply to products covered by Section 232 tariffs. Some 232s, meanwhile, apply to both a covered product (e.g., steel) and a product containing a covered product (e.g., washing machines), but tariffs on the latter will depend on its exact content, with 232 tariffs on the covered materials and IEEPA tariffs on the rest—unless, of course, some other exception or penalty or “trade deal” term applies. (The IEEPA fentanyl-related tariffs, for example, apply to all products from Canada and Mexico, unless they comply with the U.S.-Mexico-Canada trade agreement.)
Got it?
This summary, however, doesn’t really do justice to how crazy and variable U.S. tariffs have become for trillions of dollars’ worth of annual commerce—and how hard it is for American importers to simply figure out how much they owe the government. Consider, for example, this framework from the trade gurus at Sandler, Travis, & Rosenberg showing when executive branch tariffs “stack” and when they don’t:
A Brutal Business Environment
This is just the tip of the complexity iceberg, and it’s hard to express how crazy it all is in practice—even for seasoned pros. In July, for example, trade wonk Samuel Marc Lowe walked through the pain of calculating the total amount of U.S. tariffs an importer would owe on a simple can of Belgian beer, showing that what used to be a boring and easy determination (at 0 percent) now requires the American company to have detailed knowledge—and provide detailed reporting to the U.S. government—of the item’s aluminum content, that aluminum’s country of origin (not where the can was made), and whether the beer is covered by a subsequent trade deal. Adding to the absurdity, Sam actually got the calculation wrong on his first pass, and his July article was then superseded by the U.S.-EU trade deal agreed to a couple weeks later (a deal that has already changed once and may now be in further trouble). Sam also omitted a crucial detail: a U.S. beer importer’s failure to know the aluminum’s origin would default it to Russia, thereby subjecting the beer’s entire value to a 200 percent duty—a penalty presumably intended to prevent U.S. companies from feigning ignorance so they can surreptitiously import sanctioned Russian metal via beer cans and other items. (No, really.)
All of this comes with a real economic cost, beyond the taxes and higher prices that U.S. companies are now paying. Most obviously, American firms have paid accountants, lawyers, customs brokers, and other supply chain experts to advise them on how to comply with the new U.S. tariff regime, to minimize their tariff liability, and to avoid steep penalties for getting something wrong.
Adding insult to injury, these regulatory burdens now apply to many more U.S. businesses because Trump this year also dramatically curtailed the “de minimis” rule that reduced customs formalities (tariffs, paperwork, etc.) for low-value, direct shipment goods that many U.S. small businesses have used for parts and materials they need in small volumes. In the past, these businesses—say, your local auto mechanic who needs a single part from Germany—didn’t need to worry about all these rules, regulations, exceptions, and processing fees. Now, they do.
Getting things wrong also carries the risk of civil and criminal penalties under a new enforcement push. The Departments of Justice and Homeland Security have established a joint trade fraud task force aimed at ensuring compliance with the president’s “America First” policy.
Summation
For the record, my best guess is that the administration isn’t actively trying to impose a regulatory blockade on most imports and to crush small businesses in the process. Instead, the tariffs’ seemingly impossible bureaucratic labyrinth is simply what happens when a mercurial president who just really likes tariffs is given a library of laws that let him apply and change those import taxes at any time and in whatever way he wants—and regardless of the laws’ original intent. The Supreme Court could trim those excesses in the coming weeks by invalidating the most reckless and uncertain tariffs under IEEPA, and that should be celebrated. But, given the other statutes on the books, we shouldn’t kid ourselves here: Until Congress acts to change U.S. trade law, tariffs will remain historically high, and their complexity will continue to impose a substantial, needless, and inequitable burden on the American economy.
Tariff Madness
Anyone rooting for this tariff madness to continue is economically illiterate, has Trump Worship Syndrome (TWS), or both.
Trump has surrounded himself with supporters, some of whom have to know better. I struggle to believe Treasury Secretary Scott Bessent is stupid enough to believe what he is saying. In contrast, Commerce Secretary Howard Lutnick probably is.
Regardless, it’s bad enough that huge corporations have to deal with this blatant economic stupidity, but small businesses do not stand a chance.
I have been predicting all year that small businesses would bear the brunt of this madness, and it’s coming to fruition now.
Trump Doubles Down on Economic Idiocy
November 28, 2025: Trump Doubles Down on Idiotic Idea of Using Tariffs to Replace Income Tax
Once again, Trump says tariffs can replace the income tax.
To replace income tax with tariffs, Trump would have to charge (and collect) $2.4 trillion in tariffs on $3.27 on imports.
That implies a tariff rate of 73.4 percent on all imports, without a decline in imports.
This is obvious economic idiocy, spouted by an obvious economic idiot.
Is Trump Really That Stupid?
Since Trump has repeated this nonsensical message many times, it’s at least possible, if not probable, that Trump really is as stupid as he sounds.
It’s also possible Trump is laying the blame for when the Supreme Court rejects his reciprocal tariff stupidity.
I suspect it is some of both.
Costco Sues Trump Administration for Full Refund of Reciprocal Tariffs
On December 3, 2025, I noted Costco Sues Trump Administration for Full Refund of Reciprocal Tariffs
If Trump loses, how messy will refunds be? PS Trump will lose.
My estimate is there is a 75 percent chance Trump will lose in the Supreme Court.
My further guess is 6-3 against is the most likely outcome. Click above link for details and rationale.
A reader comments “As with all things Trump, reducing business regulation was a lie!”
Good point. So, let’s discuss What Trump Has Done to the Tax Code.
