Trump’s Tariff Gamble Faces Supreme Court Judgment

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Trump’s Tariff Gamble Faces Supreme Court Judgment

Bitget-RWA2025/11/22 15:34

By:Bitget-RWA

- Trump's administration prepares alternative tariff strategies under Sections 301/122 if Supreme Court invalidates IEEPA-based duties, risking legal and enforcement challenges. - IEEPA-derived tariffs (55% of 14.4% average rate) face judicial scrutiny, with lower courts already deeming country-based levies unlawful over "economic emergency" claims. - Potential $88B duty refunds and renegotiations with China/Brazil loom, while crypto markets price in 24% odds of SCOTUS upholding Trump's emergency powers. -

The Trump administration is discreetly developing backup strategies in case the Supreme Court strips away its broad tariff authority, indicating a tactical shift to preserve its trade stance amid legal ambiguity. The White House, which has enacted historic tariffs using the International Emergency Economic Powers Act (IEEPA), is

considering alternatives like Sections 301 and 122

of the Trade Act. These provisions permit unilateral tariffs but are more limited in scope and carry additional legal uncertainties. This approach highlights the administration’s resolve to maintain its protectionist policies, even as skepticism from the justices in recent hearings has

sparked concerns about possible upheaval

in global commerce and business strategies.

Courts have already challenged the administration’s use of IEEPA.

Lower courts have determined

that the president’s tariffs, justified as responses to “economic emergencies,” are not lawful—a position the Supreme Court has yet to address. Should the justices overturn the IEEPA-based tariffs, the administration would need to quickly reestablish duties under different laws. While Sections 301 and 122 provide options, they involve lengthy review processes or are capped at 150 days,

making sustained enforcement more difficult

Trump’s Tariff Gamble Faces Supreme Court Judgment image 0

According to Bloomberg Economics

more than half of the current 14.4% average tariff on U.S. imports is due to IEEPA measures, which would need to be swiftly replaced to prevent revenue loss and policy gaps.

The implications go beyond legal debates. A decision against the tariffs could result in over $88 billion in refunds and force new negotiations with countries such as China and Brazil.

The recent easing of tariffs for Brazil

, which lowered the percentage of its exports facing a 40% surcharge from 36% to 22%, demonstrates the administration’s efforts to balance international relations with domestic political demands. At the same time,

cryptocurrency markets currently reflect

a 24% chance that the Supreme Court will rule in the administration’s favor, showing investor unease about regulatory unpredictability.

The administration’s backup plans also encounter internal obstacles. Section 232 tariffs on steel, aluminum, and vehicles—already a source of friction with Europe—could be broadened, risking breaches of trade agreements.

Wendy Cutler, a former U.S. trade official

has cautioned that expanding these sector-specific tariffs could become the default backup if IEEPA is struck down. However, such actions could lead to lawsuits and further strain relations with trading partners.

Experts in law and economics warn that these fallback measures lack IEEPA’s adaptability. For example, Section 122 tariffs expire after 150 days and would need continual renewal, potentially prompting new legal challenges.

Peter Navarro, a senior trade adviser

, has called this approach unrealistic, while Kevin Hassett, head of the National Economic Council, remains hopeful that the administration can work within these limits.

The Supreme Court’s verdict, expected by early summer, will reveal how well the administration can adjust.

James Blair, Deputy Chief of Staff

estimates there’s an even chance of success, and officials are prepared to “rebuild everything” if the decision goes against them.

At present, the White House maintains

that it possesses “legal authority” and is confident in its legal position.

As the deadline approaches, companies and foreign governments are preparing for ongoing unpredictability. The administration’s contingency plan, though ready, highlights the vulnerability of a trade policy reliant on extraordinary emergency powers.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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