President Trump is reportedly preparing to unleash a fresh wave of tariffs under alternative trade laws if the Supreme Court strikes down the levies he imposed using emergency powers.
The administration is expected to use decades-old trade statutes to keep its tariff regime going if the high court rules against the president as soon as January — potentially reissuing levies under different legal rationales, according to the Financial Times.
Markets are already bracing for turbulence, with traders warning a ruling against the tariffs could leave the federal government on the hook for billions of dollars in repayments and force the White House to move quickly to reissue levies to avoid a sudden revenue hit.
The contingency plans include expanded use of arcane laws like Section 232 of the Trade Expansion Act, which allows tariffs on national security grounds and has already been used to target steel, aluminum, autos, copper and lumber.
The White House is weighing additional statutes that give the president broad authority to penalize foreign trade practices.
“Nobody thinks the tariffs are going away,” Ted Murphy, a trade lawyer at Sidley Austin, told the FT.
“They are just going to be reissued under a different umbrella. They will reissue tariffs the same day.”
Several Section 232 investigations are already underway — including probes into semiconductors, pharmaceutical goods and medicines, critical minerals and aerospace parts, according to the Financial Times.
The findings of those investigations are yet to be released, giving the administration a ready-made pipeline to justify new tariffs if the court strips away its emergency authority, the publication reported.
The other laws being mulled by the White House include Section 301 of the Trade Act of 1974 — which targets unfair foreign trade practices — along with Sections 122 and 338, trade lawyers told the FT.
While Section 301 is considered a workhorse statute that is often invoked, the other two — Sections 122 and 338 — are dormant laws that have been on the books for decades but have been rarely implemented.
The laws could allow the president to slap temporary tariffs — even ones with higher rates than the status quo — on trading partners if other legal avenues are cut off, analysts told FT.
The fallback options appear to come with some constraints, with trade lawyers noting that alternative statutes would require more formal findings and procedural steps — limiting the president’s ability to rapidly raise or lower tariffs as leverage against major trading partners, according to the FT.
“If the Supreme Court rules against the administration, Trump’s power to use tariffs both as punishment and reward will be significantly diminished,” Lori Wallach, director of the Rethink Trade group and a lawyer, told FT.
“With other laws, the administration would have to make a case for using tariffs,” she said.
The administration has warned of harm to the economy if the highest court in the land rules against the tariffs, with a White House spokesperson telling the FT that the “economic and national security consequences” of the Supreme Court striking down the levies would be “enormous.”
“President Trump lawfully exercised the emergency tariff powers granted to the Executive Branch by Congress, and the Administration is confident in ultimate victory on this matter by the Supreme Court,” White House spokesman Kush Desai said in a Tuesday statement to The Post.
The US has collected an estimated $200 billion in tariff revenue this year, but importers are already scrambling to protect their claims. Companies have been hiring lawyers and preparing refund appeals — including retail giant Costco, which has sued to preserve its right to reclaim the costs of tariffs if the levies are struck down, the FT reported.
Any ruling against Trump’s use of emergency powers is expected to ripple through financial markets, with analysts warning that bond prices could fall and yields may rise as investors brace for higher government borrowing to plug a potential hole left by lost tariff revenue, according to the FT.
Trump last week credited his tariffs for fueling a surging US economy after new data showed GDP grew at a robust 4.3% annual rate in the third quarter, the fastest pace in two years.
