The Trump Administration has taken many actions which have raised questions about its support for free trade, including tariffs under the International Emergency Economic Powers Act of 1977, Section 122 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962, and Section 301 of the Trade Act of 1974.
However, even with this protectionist agenda, it is important to recognize that the Administration has also taken steps that reduce costs for consumers, producers, and taxpayers. These actions show that the Administration recognizes that imports remain essential to the U.S. economy.
There are several cases where tariff relief, targeted exemptions, and investment promotion have helped limit the damage of protectionist policies. While it is encouraging that the government recognizes the cost of tariffs in some instances, these exceptions represent the government picking industry-wide winners and losers. Although these actions decrease costs for the targeted beneficiaries, there should be no need for the government to establish exemptions in the first place. Each section below addresses measures which alleviate costs for the American consumer.
1. Suspending Protectionist Policies and Duties in Times of Need
Jones Act
The Jones Act, a section of the Merchant Marine Act of 1920, is a protectionist policy which requires that all merchandise shipped by water between U.S. ports must be transported by ships that are U.S.-built, owned, registered, and predominantly crewed. Drafted after wartime, the legislation sought to support domestic shipbuilding and ensure a strong domestic merchant marine industry in case of war or national emergency.
However, this century-old law has proved entirely burdensome. A foreign vessel carrying goods from Asia may unload some cargo in Hawaii and continue to the continental United States with cargo that remains aboard. However, if merchandise is unloaded in Hawaii and then reloaded for transportation to another U.S. port, the domestic leg generally must be completed by a Jones Act-qualified vessel.
Overall, U.S.-produced vessels cost four to five times more to construct, and U.S.-flagged ships are over four times more expensive to operate. The Jones Act stands as one of the most restrictive pieces of global cabotage legislation and limits free trade, creating an artificially high transaction cost for domestic transportation.
Previous administrations have waived the Jones Act in periods of war and natural disaster, including eight times between 2005 and 2023. The Trump Administration most recently waived the Jones Act for 60 days on March 17, and later extended this an additional 90 days on May 17. Set to expire August 16, the Jones Act will be waived for a total of 150 days.
This waiver is the longest pause of the Jones Act since the Korean War. It was granted to ease the disruption of available energy and other commodities in the wake of the Iran war. At the time of the waiver, the Administration stated that insufficient Jones Act-qualified tanker capacity was available to meet the relevant shipping demand. 120 days since the waiver, 172 total voyages have been completed across 124 unique vessels which would have previously been noncompliant. Across all cargo, 10 of the top 16 shipped items remain different fuel types.
Since the Jones Act was waived, ships have transported U.S. goods between U.S. ports at a higher rate. One vessel, the Green Planet, a chemical and oil product tanker under a Liberian flag, transported 45,080 barrels of diesel fuel from the U.S. Virgin Islands to Puerto Rico, moving fuel that previously would not have been accessible to Puerto Rico. The ship continued to a port in Jamaica and then Houston. This is representative of more efficient trade routes that would not have been possible without the Administration’s Jones Act waiver.
Suspension of Duties on Moroccan Phosphate Fertilizer
The federal government affirmed countervailing duties on phosphate fertilizers on February 16, 2021, for Morocco and Russia because of domestic subsidies. This ruling was issued following a complaint by the Mosaic Company, an American agricultural business which is the largest U.S. producer of phosphate fertilizers. Mosaic alleged that subsidized Moroccan imports undercut domestic prices, resulting in reduced demand for domestically produced fertilizer, harming U.S. producers.
As a result of the countervailing duties, U.S. phosphate fertilizer prices increased by approximately 34% compared to a no-duty baseline, increasing downstream prices for corn, cotton, and sorghum by about 10%. The countervailing duties increased the price of fertilizers by an estimated $6.9 billion between the 2021 and 2025 growing seasons.
To respond to increasing fertilizer costs resulting from the Iran war, the Administration declared an emergency and temporarily suspended the duties on Moroccan fertilizers for eight months, or until the emergency is terminated. The presidential declaration specifically cited the benefits of “duty free importation” of phosphate fertilizer, a position that should apply broadly to tariffs on all imported inputs used by U.S. farmers and manufacturers.
Based on the $6.9 billion cumulative cost of duties over the five growing seasons, farmers can expect annual savings of $1.38 billion from the temporary removal of countervailing duties on phosphate fertilizers. This alleviates pressures on the agricultural sector and supports lower costs for consumers.
2. Specific Exceptions to Tariffs
The Administration has argued that import tariffs can increase U.S. manufacturing, create jobs, reduce the trade deficit, and provide leverage against foreign governments for a greater political agenda. However, tariffs are taxes on imports, and the cost is often passed through to U.S. consumers, businesses, and producers. For this reason, some of the Administration’s better trade decisions have come from not the tariffs, but the exceptions which limit economic damage.
International Emergency Economic Powers Act (IEEPA) Tariffs
In April 2025, the Administration imposed broad IEEPA tariffs through its reciprocal tariff schedule. The Supreme Court invalidated the IEEPA tariffs in February 2026. The tariffs collected $166 billion in revenue through an international duty rate. While the tariffs were sweeping, they still held numerous exceptions.
The clearest example of tariff restraints came from Annex 2, which listed products excluded from the Administration’s reciprocal tariff schedule. The Annex excluded over 1,000 line item product classifications, including pharmaceuticals, semiconductors, timber, metals, and chemicals.
The exceptions were especially concentrated in critical sectors, with a 100% share of all petroleum products, coal derivatives, and copper products, along with 96% of wood-based sheets and panels, 95% of energy raw materials, 94% sawn wood, 87% raw timber, 84% pharmaceuticals, 72% basic pharmaceutical products, 65% minerals for the chemical industry, and 58% precious metals.
The Administration later exempted more than 200 agricultural items and food products from IEEPA tariffs.
Section 122
After the Supreme Court invalidated IEEPA tariffs, the Administration turned to Section 122 tariffs on February 24, 2026. Section 122 tariffs are temporary, lasting 150 days, and are intended to address balance-of-payments concerns. These tariffs therefore function as a temporary replacement for invalidated IEEPA tariffs, and will expire on July 24, 2026.
The Section 122 exemptions were nearly identical to the IEEPA exemptions in place at the time and included 1,098 general line item exceptions. These exceptions were for general energy products including petroleum, coal, and natural gas, as well as agricultural products such as beef products, fresh vegetables, fresh and dried fruits, nuts, staple grains, starches, and seeds, and lastly industrial materials such as metal ores and concentrates. In total, 30 new exemptions were added, and 16 removed.
Section 232
Section 232 authorizes the President to adjust imports based on whether those particular imports threaten to impair national security. Unlike IEEPA or Section 122, Section 232 tariffs require an investigation under the authority of the Secretary of Commerce before actions can be taken.
The first Trump Administration imposed Section 232 tariffs on steel and aluminum on March 23, 2018. In the second term, the Administration expanded the use of Section 232 tariffs to cover additional derivative products, including agricultural equipment, heating, ventilation, air conditioning systems, and industrial construction equipment. In recognition of the harm these tariffs inflict on Americans, the Administration reduced, but did not eliminate, Section 232 tariffs on machinery and equipment on June 1, 2026.
Section 301
Section 301 tariffs are country-specific tariffs designed to combat and penalize unfair foreign trade practices that harm U.S. commerce. Similar to Section 232 tariffs, Section 301 requires an investigation, but is administered by the United States Trade Representative (USTR).
During Trump’s first term, Section 301 tariffs were used against China during the U.S.-China trade war over intellectual property theft and technology transfer. However, the Administration also exempted these tariffs on certain medical equipment during the outbreak of COVID-19, recognizing that tariffs on essential medical goods could raise costs during a public health emergency.
In 2026, USTR initiated 60 parallel Section 301 investigations concerning failures to restrict forced-labor imports, investigations involving 16 economies concerning structural excess capacity, and four country-specific investigations into Germany, Vietnam, Brazil, and China. These investigations propose specific tariff rates and exemptions. For example, the Brazil investigation includes exemptions on beef, coffee, metals, energy products, aircraft parts, and agricultural products.
All Exemptions
While each tariff authority varies in scope, purpose, and legal structure, these exemptions all represent an understanding that international trade supports U.S. production. The Administration is indirectly acknowledging that tariffs do increase costs through the utilization of these exceptions.
The United States relies on imported inputs for medicine, energy, construction, agriculture, transportation, and manufacturing. Exempting pharmaceutical and medical inputs can help limit medical cost increases. As the American Hospital Association recently commented:
Building domestic manufacturing capacity is a complex, years-long process entailing significant logistical complexity and resources for manufacturers, distributors and purchasers such as hospitals and health systems. In the meantime, patients’ lives depend on the ready availability of medications, medical devices, equipment and supplies, PPE, and countless other products necessary to deliver safe and effective care. We are concerned that broad tariffs on these critical goods — and any retaliatory action from the countries on which tariffs are imposed — could inadvertently disrupt the availability of diagnostic and treatment tools essential to delivering high quality, safe and effective care.
Exemptions for fuel and energy products can reduce pressure on transportation and consumer prices. Exemptions on lumber support lower housing construction costs, and exemptions for copper, minerals, and industrial materials reduce costs for U.S. manufacturing.
These exemptions do not make the Administration’s broader tariff agenda pro-free trade. However, they are examples of restraints within an otherwise protectionist policy. They recognize the most critical inputs that would hurt Americans and producers if tariffs were applied.
3. Attracting Investment
Trump has suggested he has secured a lofty $18 trillion in new investment commitments. The White House tracker suggests $9.6 trillion in total new investments (including domestic). Of this, $2.6 trillion are bilateral trade agreements and purchases. This means that only $7 trillion constitutes actual investment, with $3.5 trillion as sponsored investment projects from foreign nations (with more than half of that funding undefined), and $3.5 trillion from private and domestic investments.
While some people view foreign investment as conquest by purchase and others as a balance of payment emergency, the Administration is correct to view it as beneficial to the United States.
The Federal Reserve Economic Data platform indicates that the stock of foreign direct investment in the United States increased by roughly $270 billion from Q1 2025 to Q1 2026, compared to $346 billion between Q1 2024 and Q1 2025.
Encouraging investment is always a welcome policy that promotes trade and bolsters the economy. Trump’s international trade deals have created large quantities of investment announcements that have yet to directly materialize. Should these commitments become investments, they would undoubtedly benefit the U.S. economy and promote increased international trade.
Conclusion
The Administration’s broader trade agenda remains costly for taxpayers. Tariffs imposed under IEEPA, Section 122, Section 232, and Section 301 have raised costs for consumers, producers, and businesses. However, the Administration deserves recognition when it does implement trade policies acknowledging that these tariffs come at a cost and providing exemptions.
Jones Act waivers, temporary suspensions of duties, tariff exemptions, and promoting foreign investment all acknowledge the same point—the U.S. economy benefits from international trade and investment. The Administration should consider additional tariff relief to benefit American farmers and encourage increased domestic manufacturing. While these actions do not fully offset the costs imposed by the President’s broader tariff agenda, and still act as a means of the government selecting winners and losers, they show that targeted relief can support industries in need.