The trade landscape is facing escalating uncertainty as the impact of tariffs initiated during the administration of former President Donald Trump continues to resonate in 2026. According to Chad Bown, a senior fellow with the Peterson Institute for International Economics, the policy environment may change drastically due to potential court rulings or new trade agreements. This assessment was shared during a briefing with the Port of Los Angeles on February 17, 2026.
In early 2025, the U.S. imposed a 10% tariff on imports from China, signaling what many thought would be a straightforward trade policy. However, the subsequent year brought a dramatic increase in tariffs, marking the most aggressive series of trade actions since World War II. Duties were extended to Canada and Mexico, alongside the controversial “Liberation Day” tariffs introduced in spring 2025. As the pace of new tariff announcements slowed later that year, the ramifications of these policies became increasingly complex.
Bown highlighted that the current challenge is not solely the tariffs themselves, but the unpredictable nature of the White House’s trade strategy. He noted, “Some of the tariffs you can motivate as potentially being important parts of U.S. government policy for national security resilience. But a lot of them don’t necessarily make a whole lot of economic sense.” This approach has created a turbulent environment for businesses, which must navigate shifting sourcing strategies while remaining alert to potential new policy changes.
Research from the Federal Reserve Bank of New York, released on February 12, revealed that approximately 90% of the economic burden from these tariffs has fallen on American companies and consumers, contrary to President Trump’s claims that other nations would primarily bear the costs.
The situation could become even more fluid in 2026 if the U.S. Supreme Court decides to overturn the majority of Trump-era tariffs. A lawsuit presented to the justices in November 2025 challenges these duties, and a ruling could compel the Treasury Department to refund billions of dollars in tariff revenue collected over the past year. Such a development would likely lead to additional chaos for businesses already grappling with instability.
Another significant event on the horizon is the review of the U.S.-Mexico-Canada Agreement (USMCA), scheduled for July 2026. While stakeholders emphasize the importance of maintaining the agreement’s core provisions, reports indicate that Trump is contemplating withdrawal from the pact, which he referred to as “irrelevant” during a visit to Detroit, Michigan, in January 2026. This potential shift could provoke significant tensions with the United States’ closest trading partners.
Bown emphasized the necessity of closely observing how these developments unfold throughout 2026, stating, “Watching how all of that plays out over the course of 2026 will be important.” The coming months will undoubtedly shape the future of trade relations in North America and beyond, making it essential for businesses and policymakers to remain vigilant amid ongoing uncertainty.
