President Trump Has a Backup Plan if the Supreme Court Strikes Down His Tariffs

The Supreme Court is likely to issue a ruling on President Donald Trump’s so-called reciprocal tariffs early in 2026, and the administration is reportedly preparing contingencies if the high court doesn’t go its way.

In May, a federal appeals court allowed Trump’s tariffs to stay in place while the case wound its way through the legal system.

The president imposed his “Liberation Day” tariffs in early April, relying on the 1977 International Emergency Economic Powers Act, citing the record trade deficit of $1.2 trillion in 2024.

White House Press Secretary Karoline Leavitt said following the appeals court ruling, “Congress had created the National Emergency Act to provide the congressional framework to strike down improper IEEPA use. And any questions over whether Trump improperly imposed these IEEPA tariffs were already adjudicated in Congress following Liberation Day.”

On April 30, the Senate voted down a Democrat-introduced resolution seeking to rescind Trump’s tariffs.

Treasury Secretary Scott Bessent told Fox Business in mid-December that the administration has “plenty of revenue alternatives” if the Supreme Court strikes down the tariffs, but he added it is also a national security issue.

“We are rebalancing trade, and this year, for the calendar year, we are going to shrink the deficit by several hundred billion dollars,” he said. “So economic security is national security.”

Tariff revenue is running $236 billion for the calendar year to date, up from $118 billion during President Joe Biden’s last fiscal year in office.

Additionally, “President Trump is using the IEEPA tariffs to fortify our supply chains,” bringing manufacturing of key items like pharmaceuticals back to the U.S., Bessent argued.

The Financial Times reported that Trump is preparing to impose tariffs using other statutes should the Supreme Court rule against the administration.

“Nobody thinks the tariffs are going away,” Ted Murphy, a trade lawyer at Sidley Austin in Washington, said. “They are just going to be reissued under a different umbrella. They will reissue tariffs the same day.”

The Financial Times explained the administration could use “an obscure national security law known as Section 232 of the Trade Expansion Act of 1962, which has already been activated to apply levies to cars, steel, aluminium, copper and lumber.”

“Investigations into semiconductors, pharmaceutical goods and medicines, critical minerals and aerospace parts are all under way using Section 232, but their conclusions have remained unpublished,” the outlet further noted.

Trump’s team could also use a measure known as Section 122 of the Trade Act of 1974, allowing for up to 15 percent tariffs to be imposed on trading partners for 150 days as an immediate stopgap measure while other levies are prepared.

Meanwhile, “A separate provision, Section 338 of the Tariff Act of 1930, could also be triggered, although it has been used very rarely in recent history. It allows the government to immediately issue levies of up to 50 per cent on a foreign country that discriminates against US commerce, and can be used to respond to any ‘unreasonable charge, exaction, regulation, or limitation,’” the Financial Times said.

The outlet noted a ruling against the Trump administration would be likely to rattle the U.S. Treasury bond market, with the prices dropping as buyers anticipate the federal government borrowing more money to make up for lost tariff revenue in the short term.

Further, the Supreme Court could rule that the levies collected to date using IEEPA be refunded.

White House representative Kush Desai told the Financial Times that “the economic and national security consequences” of a Supreme Court ruling opposing Trump’s tariffs would be “enormous.”

He added, “The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”

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