UPSC Prelims Practice Questions — Trump says he has ‘absolute right’ to charge tariffs in another form

Q1. Under which one of the following U.S. statutes did President Donald Trump impose the temporary 10% global import surcharge in February 2026 after the U.S. Supreme Court struck down his earlier tariff regime?

• A. Section 232 of the Trade Expansion Act, 1962
• B. Section 201 of the Trade Act, 1974
• C. Section 122 of the Trade Act, 1974
• D. Section 301 of the Trade Act, 1974

Q2. In the context of recent U.S. tariff measures, the International Emergency Economic Powers Act (IEEPA) is best described as a statute that:

• A. empowers the U.S. President to levy retaliatory duties against foreign governments engaged in unfair trade practices
• B. empowers the U.S. President to regulate international economic transactions in response to an unusual and extraordinary foreign threat declared under a national emergency
• C. empowers the U.S. Secretary of Commerce to impose tariffs on imports that threaten U.S. national security
• D. empowers the U.S. President to impose temporary safeguard duties when an import surge causes serious injury to a domestic industry

Q3. In March 2026, the United States formally notified its invocation of Article XII of GATT (in support of its new global import surcharge) to which one of the following bodies?

• A. WTO Council for Trade in Goods
• B. WTO Committee on Balance-of-Payments Restrictions
• C. WTO Dispute Settlement Body
• D. Executive Board of the International Monetary Fund

Q4. With reference to U.S. tariff authorities recently in the news, consider the following statements comparing tariffs imposed under Section 122 of the Trade Act, 1974 with those that had earlier been imposed under the International Emergency Economic Powers Act (IEEPA): 1. Unlike IEEPA, Section 122 caps the tariff rate at 15 per cent ad valorem. 2. Section 122 tariffs are limited to 150 days unless extended by Congress, whereas IEEPA itself imposes no comparable statutory time limit on tariff duration. 3. Section 122 requires a declared national emergency arising from an unusual and extraordinary foreign threat, whereas IEEPA tariffs are triggered specifically by balance-of-payments deficits. Which of the statements given above is/are correct?

1. Unlike IEEPA, Section 122 caps the tariff rate at 15 per cent ad valorem.
2. Section 122 tariffs are limited to 150 days unless extended by Congress, whereas IEEPA itself imposes no comparable statutory time limit on tariff duration.
3. Section 122 requires a declared national emergency arising from an unusual and extraordinary foreign threat, whereas IEEPA tariffs are triggered specifically by balance-of-payments deficits.

• A. 1 and 2 only
• B. 1 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q5. Section 122 of the U.S. Trade Act, 1974 authorises the President to impose temporary import surcharges. Consider the following grounds: 1. To deal with large and serious U.S. balance-of-payments deficits. 2. To prevent an imminent and significant depreciation of the U.S. dollar in foreign exchange markets. 3. To cooperate with other countries in correcting an international balance-of-payments disequilibrium. 4. To retaliate against unfair trade practices of a foreign government injuring U.S. commerce. Which of the above is/are NOT among the statutory grounds specified in Section 122?

1. To deal with large and serious U.S. balance-of-payments deficits.
2. To prevent an imminent and significant depreciation of the U.S. dollar in foreign exchange markets.
3. To cooperate with other countries in correcting an international balance-of-payments disequilibrium.
4. To retaliate against unfair trade practices of a foreign government injuring U.S. commerce.

• A. 4 only
• B. 2 and 4
• C. 1 and 3
• D. 1, 2 and 4