UPSC Prelims Practice Questions — Donald Trump’s new tariffs shift focus to balance of payments

Q1. In the context of the Section 122 surcharge invoked by the United States in February 2026, which of the following best describes a 'temporary import surcharge'?

  • A. A duty levied on selected imports as a countermeasure against unfair foreign trade practices, following an investigation by the U.S. Trade Representative.
  • B. An additional ad valorem charge on imports imposed by the President for a limited period to address balance-of-payments problems, without prior injury investigation.
  • C. A safeguard tariff imposed after the International Trade Commission finds that imports are causing serious injury to a domestic industry.
  • D. A retaliatory tariff imposed in response to a national security threat identified by the Department of Commerce under Section 232.

Q2. With reference to the tariff actions of the U.S. President in 2025-26, consider the following statements: 1. The 'Reciprocal Tariffs' announced in 2025 were imposed under the International Emergency Economic Powers Act (IEEPA), 1977, which the U.S. Supreme Court in 2026 held does not authorise the imposition of tariffs. 2. Unlike the IEEPA tariffs, the Section 122 surcharge of the Trade Act of 1974 is statutorily capped both in rate and in duration. 3. Section 122 had been used by every U.S. President since its enactment, whereas IEEPA had never previously been invoked for tariffs. Which of the statements given above is/are correct?

  1. The 'Reciprocal Tariffs' announced in 2025 were imposed under the International Emergency Economic Powers Act (IEEPA), 1977, which the U.S. Supreme Court in 2026 held does not authorise the imposition of tariffs.
  2. Unlike the IEEPA tariffs, the Section 122 surcharge of the Trade Act of 1974 is statutorily capped both in rate and in duration.
  3. Section 122 had been used by every U.S. President since its enactment, whereas IEEPA had never previously been invoked for tariffs.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q3. Proclamation 11012, signed by the U.S. President in February 2026 to impose a temporary global import surcharge, was issued under the authority of which one of the following?

  • A. Section 232 of the Trade Expansion Act of 1962
  • B. Section 301 of the Trade Act of 1974
  • C. Section 122 of the Trade Act of 1974
  • D. The International Emergency Economic Powers Act of 1977

Q4. Under Section 122 of the U.S. Trade Act of 1974, as invoked through Proclamation 11012 in February 2026, what is the maximum number of days for which the President may keep a temporary import surcharge in force without Congressional action?

  • A. 90 days
  • B. 120 days
  • C. 150 days
  • D. 180 days

Q5. The actual collection of the Section 122 import surcharge imposed by the United States in February 2026 at U.S. ports of entry is operationally carried out by which one of the following?

  • A. The Office of the United States Trade Representative (USTR)
  • B. U.S. Customs and Border Protection (CBP) under the Department of Homeland Security
  • C. The U.S. International Trade Commission (USITC)
  • D. The Bureau of Industry and Security under the Department of Commerce
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