Ahead of the Supreme Court’s ruling on tariffs, the US administration, led by Donald Trump, is exploring alternative solutions should the Supreme Court strike down the president’s top customs authorities.
The Commerce Department and the Office of the U.S. Trade Representative were analyzing other options in case the court ruled against the tariffs, Bloomberg reported, citing U.S. officials familiar with the development.
What options does the Trump administration have?
The White House is exploring alternatives, such as Section 301 and Section 122 of the trade code, which give the president unilateral authority to impose tariffs.
Section 301 is a law that gives the US Trade Representative the authority to investigate and address unfair trade practices by foreign countries that harm US trade. Section 122 powers would allow the president to impose a 15% tariff, a threshold he has agreed to in various negotiations, but only for up to 150 days.
But those methods tend to be either slower or more limited than the broad powers Trump has used so far, and are likely to face their own legal challenges.
The US administration still hopes to win the case, as Trump has repeatedly insisted on maintaining his tariffs on trading partners.
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But the preparations suggest the administration is preparing for a potentially unfavorable outcome after the court previously expressed skepticism about Trump’s country-by-country tariffs. It also reflects Trump’s determination to impose tariffs, including through unused funds. Tariffs remain a key part of the US president’s agenda regardless of the court’s decision, one official told the news outlet.
“We’re waiting for a decision. We’re hoping it’s going to be good, but if not, we’re going to — we’re always going to find ways, you know, we’re going to find ways,” Trump said Wednesday.
The White House acknowledged it is looking for “new ways” to preserve Trump’s trade policies, without sharing details of the plan.
The White House is hoping for a victory
“President Trump lawfully exercised the extraordinary tariff powers granted by Congress to the executive branch, and the administration is confident of a final Supreme Court victory on this matter. The administration is always exploring new ways to address America’s historic merchandise trade deficit and restore manufacturing that is critical to our national and economic security,” spokesman Kush Desai told Bloomberg.
It is not certain when the Supreme Court will issue its decision. Judges can uphold the tariffs, remove them entirely, or take a more targeted approach. This decision risks further unpredictability for businesses and foreign governments.
The Supreme Court case centers on Trump’s use of the International Emergency Economic Powers Act (IEEPA), under which he imposed reciprocal tariffs on imports around the world, as well as levies on Chinese, Canadian and Mexican goods related to fentanyl and levies on products from Brazil in a failed attempt to stop the prosecution of former president and Trump ally Jair Bolson.
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The total effective tariff rate on U.S. imports is about 14.4%, with more than half of that rate accounted for by IEEPA tariffs, according to Bloomberg Economics estimates. Economists “expect most tariffs to eventually be fully replaced” if the Supreme Court strikes down country-by-country fees.
Meanwhile, backup plans are already being implemented in certain cases. For example, Trump launched a 301 investigation against Brazil and has imposed 301 tariffs on some Chinese products since his first term. This provision usually requires an extensive investigation before duties are imposed.
National Economic Council Director Kevin Hassett said Trump could ask the 301 or 122 agencies to reimpose import tariffs if the Supreme Court rules against the administration.
“There are a lot of things we could do to reproduce the policy that we have right now with alternative authorities,” Hassett said during an earlier interview with Bloomberg.
Trump used Section 232 of the Trade Expansion Act to impose tariffs on industries such as metals and automobiles. The administration launched new investigations and imposed additional tariffs. In addition, the continued inclusion of finished products in those tariffs has upset some trading partners, including the European Union, which says it violates agreed limits on sectoral tariffs under the US-EU trade deal.
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Section 338 of the Tariff Act is another possible option for Trump, but it may be open to a new legal challenge because it has never been used before. The provision gives the US president the power to impose tariffs of up to 50% or bar imports from a country that engages in discriminatory practices against the US.
What are the concerns about other alternatives?
The new measures will be more difficult for Trump to implement because of their limitations. Officials would have to deal with complex legal questions, such as whether the administration could impose Section 122 tariffs all at once, repeal them before the deadline and then reimpose them in a new time frame, or whether to apply the tariffs retroactively to avoid refunds collected under the current system.
An unfavorable court ruling could force the administration to return more than $88 billion in tariffs already collected, according to Bloomberg Economics.
