Truth in Tariffs Act
- Sponsor
- Sen. Schumer, Charles E. [D-NY]
- Committees
- Commerce, Science, and Transportation Committee (primary)
- Last action
- May 13, 2025
Bottom line
The bill aims to increase consumer awareness of the costs of recent presidential tariffs by requiring non-small businesses to explicitly disclose these costs as a "tariff surcharge" at the point of sale.
What it actually does
This bill mandates that most businesses selling goods to consumers in the United States must clearly display a "tariff surcharge" on the price of goods. This surcharge must represent the portion of the price attributable to certain tariffs imposed by the President on an emergency or discretionary basis after January 20, 2025. Small businesses are explicitly exempt from this requirement, and the Federal Trade Commission is empowered to enforce the Act and promulgate necessary regulations.
Proponents argue
Proponents argue that the "Truth in Tariffs Act" empowers consumers by making the often-hidden costs of tariffs transparent, allowing them to make more informed purchasing decisions. They contend it fosters accountability for presidential trade policies and highlights the direct impact of these decisions on household budgets, promoting economic transparency.
Opponents contend
Opponents might contend that this mandate places an undue and complex administrative burden on businesses, particularly those with intricate global supply chains, to accurately calculate and display tariff costs. They may argue that such a requirement could lead to inaccurate or confusing disclosures for consumers and ultimately increase operational costs that are passed on to consumers.
The bill text is very concise and can be read in a few minutes, but its implications for businesses and consumers are substantial and warrant careful consideration beyond a quick review.
Section 2(a)
Mandatory Tariff Surcharge Disclosure
This section requires any person (excluding small businesses) selling a good to a consumer in the United States to clearly and conspicuously display the portion of the price attributable to a "covered tariff" as a "tariff surcharge." This means consumers would see an explicit line item or clear indication of how much of the price is due to specific tariffs imposed by the President after January 20, 2025.
Supporters argue
Supporters argue this provision empowers consumers with critical information, allowing them to understand the true cost of goods and the impact of trade policies on their wallets. It fosters accountability for presidential tariff decisions and promotes market transparency.
Critics contend
Critics contend that accurately calculating and displaying a "tariff surcharge" for every good, especially those with complex supply chains and multiple components, would be an immense and potentially impossible burden for businesses. This could lead to inaccurate disclosures or significant compliance costs that would ultimately be passed to consumers.
Tradeoffs
The bill balances the desire for consumer transparency regarding tariff costs against the practical challenges and administrative burdens placed on businesses to accurately identify, calculate, and display these specific costs for a wide array of goods.
Section 2(c)
Federal Trade Commission Enforcement and Rulemaking
This section designates the Federal Trade Commission (FTC) as the primary agency responsible for enforcing the tariff transparency requirements. It grants the FTC the authority to treat violations as unfair or deceptive acts or practices, allowing them to use their existing enforcement powers. The FTC is also authorized to promulgate regulations necessary to carry out this section, providing flexibility for detailed implementation rules.
Defines "covered tariff" as a tariff (including a tariff rate change) imposed on an emergency or other discretionary basis by the President, and that entered into force on or after January 20, 2025.
Section 2(d)(2)
Why it matters:While placing definitions at the end is standard legislative practice, the specific date cutoff and the 'emergency or discretionary' criteria are highly consequential policy choices that could be overlooked.
Case for: Supporters would argue this precise definition targets specific, recent tariffs that are often perceived as politically motivated or having immediate economic impacts, ensuring the transparency mandate focuses on the most relevant and current trade policy decisions.
Case against: Critics might argue that limiting the scope to tariffs imposed *after* a specific date arbitrarily excludes other significant tariffs that also impact consumer prices, creating an incomplete picture of tariff costs. The 'emergency or discretionary' clause could also be subject to interpretation, leading to ambiguity.
Estimated impact: This definition significantly narrows the scope of tariffs requiring disclosure, potentially excluding many existing tariffs that also contribute to consumer prices and thereby limiting the overall impact of the transparency mandate.