It has been three weeks since the so-called “Liberation Day” on April 2, yet uncertainty surrounding global trade policy remains high. The tariffs introduced by the current administration have exceeded both the scope and scale previously discussed on the campaign trail or during the presidency.
The Realities of Tariff Collection
While policy announcements often grab headlines, the reality of enforcing tariffs is far more complicated.
The U.S. Customs and Border Protection (CBP) is tasked with collecting these duties, but the agency’s staffing and systems are not designed for the scale currently proposed. With roughly 2,500 tariff officers overseeing hundreds of entry points, the ability to accurately assess and collect increased duties is limited. Expanding this workforce is a long-term process, not a quick fix.
Moreover, the process of tariff collection is largely based on self-reporting by importers, with only about 3% to 5% of containers undergoing physical inspections annually. Random checks, not exhaustive audits, are the norm — meaning that a significant portion of goods likely pass through without adjusted tariff assessments.
These operational realities help explain why reported tariff revenues have fallen well short of political projections. While the administration suggested new tariffs could add billions daily to government revenues, actual collections have been far more modest. Treasury data show customs duties totaling approximately $8.16 billion in March — the first full month under the new policy — a figure broadly in line with previous years rather than dramatically higher.
Legal Challenges and Constitutional Questions
The tariffs also face growing legal challenges from various entities, including the New Civil Liberties Alliance, the Liberty Justice Center, members of the Blackfeet Nation, and the state of California. At the heart of these lawsuits is a critical constitutional issue:
Does the executive branch have the authority to unilaterally impose broad-based tariffs without Congressional approval?
Historically, the president’s authority to levy tariffs has been limited to specific cases, such as sanctions against particular countries or punitive measures for currency manipulation or unfair trade practices. This time, the administration invoked the International Emergency Economic Powers Act (IEEPA), declaring the U.S. trade deficit a “national emergency” to justify sweeping tariffs.
Critics — and many legal scholars — argue that this interpretation stretches the intent of IEEPA beyond recognition. Under the “major questions” doctrine, the Supreme Court has ruled that significant economic policy shifts require clear authorization from Congress. Given that the Senate, including several members of the president’s own party, has already voiced opposition to these measures, the legal challenges are credible and worth monitoring closely.
Implications for Investors
While uncertainty remains, it is important to maintain perspective. Even under a worst-case scenario where all proposed tariffs are fully implemented, the economic impact would still represent a fraction of overall U.S. trade and GDP. Thus far, tariffs have been disruptive to global commerce — creating additional planning challenges for businesses — but they have not triggered the widespread economic upheaval some feared.
From an investment standpoint, it is critical to ask:
Is there material, negative information about tariffs that markets have not already priced in?
In our view, the answer is likely no. Markets are highly efficient at absorbing known risks, and tariff concerns have dominated headlines for months. The possibility of a positive surprise — whether through legal challenges, negotiated reductions, or logistical delays — appears stronger than the risk of further negative shocks.
Therefore, we continue to recommend patience and discipline. Tariffs may present near-term headwinds, but long-term investors are better served by focusing on broader economic fundamentals rather than reacting to headlines.
We will continue to monitor this evolving situation and update you should conditions materially change. For now, we believe remaining invested with a clear, strategic focus remains the wisest course.
Prepared by the Peak American Financial Investment Research Team.
Data Sources: U.S. Customs and Border Protection, U.S. Treasury, Washington Post, Politico.
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