Guest Post: President Trump Cannot Legally Impose Tariffs Using Section 122 of the Trade Act of 1974
Hacker News
February 22, 2026
AI-Generated Deep Dive Summary
President Trump’s ability to impose tariffs using Section 122 of the Trade Act of 1974 has been called into question by legal experts. According to a detailed analysis by Bryan Riley of the National Taxpayers Union’s Free Trade Initiative, Section 122 is designed to address “fundamental international payments problems” that arise under fixed or managed exchange rate systems. However, the U.S. has operated under a floating exchange rate since the early 1970s, rendering this provision largely irrelevant today.
The statute was created in response to the economic challenges of the 1960s and 1970s, including President Nixon’s 1971 import surcharge and the breakdown of the Bretton Woods system. Section 122 allows for temporary tariffs or import quotas under specific circumstances: a significant U.S. balance-of-payments deficit, an imminent devaluation of the dollar, or cooperation with other nations to fix international imbalances. These conditions are no longer applicable to modern economic realities, as floating exchange rates eliminate the need for such measures.
The implications for tech and startups are significant. Tariffs can impact global supply chains, trade negotiations, and market access—key factors for innovation-driven industries. If the Supreme Court rules against Trump’s use of IEEPA tariffs, his administration’s reliance on alternative trade laws like Section 122 would face legal challenges, potentially limiting its ability to impose new trade restrictions.
Understanding these nuances is crucial for businesses and policymakers. The tech sector, in particular, relies on open markets and international collaboration, making the outcome of such legal battles a matter of economic interest.
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Originally published on Hacker News on 2/22/2026