TAG Industrial Watch: July 18, 2026

When President Trump’s reciprocal tariffs went into full effect last August, annual imports began to fall. That is, until the Supreme Court ruled the tariffs unconstitutional in February. Despite the short-term emergency 10% tariff rate levied by the president in lieu of higher reciprocal tariff rates, imports immediately rebounded. Merchandise imports rose to $312 billion in May, marking the highest level since March of 2025 (U.S. Census Bureau). Thanks to the AI boom, computer-related goods have served as the main driver of the recent recovery in imports.

Prior to the Supreme Court’s decision, customs duties overtook corporate income taxes as the third-highest source of federal revenues for the 2026 fiscal year. But in May, customs duties became a drain on government coffers due to tariff refunds. All of this could change starting in August when the president is expected to announce a new round of tariffs backed by Section 301 of the Trade Act of 1974. With tariff policies still uncertain, importers are taking this time to frontload potentially higher tariffs to come, much like they did during the first quarter of 2025. Given that the AI boom could easily go bust, it is questionable whether the resurgence in imports will be sustainable, especially if the U.S. dollar resumes its decline against foreign currencies. However, due to the ongoing war with Iran and the damage to oil infrastructure in the Middle East, the oil-driven boom in U.S. exports may just be getting started, opening a window for industrial real estate investors seeking new opportunities.

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