Truth in Tariffs Act

Bill Number

S. 1741

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Commerce

Status

Introduced

Latest Action

2025-05-13: Read twice and referred to the Committee on Commerce, Science, and Transportation. (text: CR S2897)

Last Updated

2025-06-09T14:45:37Z

AI-Generated Summary

Purpose

The Truth in Tariffs Act aims to promote transparency by requiring sellers to disclose how specific tariffs—imposed by the President—increase the price of goods sold to consumers in the U.S. This helps consumers understand the direct impact of these tariffs on retail prices.

Key Provisions

• Disclosure Requirement: Starting 30 days after the law's enactment, any person selling goods to U.S. consumers must clearly and conspicuously show the portion of the price caused by a "covered tariff," labeled as a "tariff surcharge." A covered tariff is defined as one imposed by the President on an emergency or discretionary basis that takes effect on or after January 20, 2025.
• Exemption for Small Businesses: The disclosure rule does not apply to small businesses, as defined under the Small Business Act (generally, businesses with fewer than 500 employees, depending on the industry).
• Enforcement by the Federal Trade Commission (FTC): Violations are treated as unfair or deceptive practices under the Federal Trade Commission Act. The FTC can investigate, penalize violators, and issue regulations to implement the law, using its existing powers without limiting other authorities.

Significant Changes to Existing Law

• This introduces a new federal mandate for tariff-related price disclosures, which does not previously exist in U.S. consumer protection or trade laws. It builds on the FTC's authority to regulate deceptive practices but specifically targets tariff impacts, linking trade policy (tariffs) directly to consumer sales transparency.

Potential Impacts

• On Consumers: Provides clearer information on how tariffs raise prices, potentially influencing purchasing decisions and awareness of trade policy effects.
• On Businesses: Larger sellers and importers may face added compliance costs for calculating and displaying surcharges, while small businesses are exempt, reducing burden on them. Could lead to more uniform pricing practices across the market.
• On Government Agencies: The FTC gains a specific enforcement role, requiring resources for rulemaking, oversight, and potential investigations, but leverages its existing framework.
• On International Relations: May indirectly highlight the costs of U.S. tariffs on imported goods, potentially affecting trade negotiations or perceptions of U.S. protectionist policies, though it does not alter tariff imposition itself.

Main Stakeholders Affected

• Consumers: Primary beneficiaries through increased price transparency.
• Sellers and Retailers: Non-small businesses must comply with disclosures, facing potential fines for non-compliance.
• Small Businesses: Exempted, avoiding regulatory costs.
• Importers and Manufacturers: Affected if tariffs on their goods require surcharge calculations.
• Federal Trade Commission (FTC): Responsible for enforcement and regulation.
• U.S. Government (Executive Branch): Tariffs imposed by the President after January 20, 2025, will trigger disclosures, possibly influencing future tariff decisions.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens consumer protection laws by treating non-disclosure as a deceptive practice, allowing FTC civil penalties (up to $50,120 per violation, adjusted for inflation) without needing new criminal statutes. Enables standard rulemaking under the Administrative Procedure Act for clear implementation.
• Constitutional: No apparent challenges; aligns with Congress's commerce clause authority to regulate interstate trade and consumer protections, without infringing on executive tariff powers under Article II.
• Political: Could foster debate on tariff effectiveness by making their costs visible to voters, potentially pressuring policymakers on trade policies. Introduced by Senate Majority Leader Schumer, it reflects Democratic priorities on transparency amid ongoing U.S. trade tensions.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Schumer, Charles E. [D-NY]

Cosponsors (3)

Sen. Van Hollen, Chris [D-MD], Sen. Kim, Andy [D-NJ], Sen. Blumenthal, Richard [D-CT]

Recent Actions

• 2025-05-13: Read twice and referred to the Committee on Commerce, Science, and Transportation. (text: CR S2897)
• 2025-05-13: Introduced in Senate

Bill Versions

• Truth in Tariffs Act — issued 2025-05-13 — PDF (3 pages)