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The fate of the Trump administration’s tariff regime hangs in the balance before the Supreme Court, and no one seems more concerned about the likelihood of a major defeat than President Donald Trump himself.
“Evil, American hating Forces are fighting us at the United States Supreme Court,” Trump recently wrote on his social media site. “Pray to God that our Nine Justices will show great wisdom, and do the right thing for America!”
If Trump’s request for divine intervention falls flat, the administration will, in fairly short order, have to figure out a way to salvage the president’s signature economic policy initiative. For months, top administration officials like Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hassett have brushed off the prospect of a loss at the Supreme Court by claiming that they will simply use other trade statutes to replace the tariffs that have been issued under the purported authority of the International Emergency Economic Powers Act.
Their outward nonchalance raises some obvious questions, not the least of which are why, if they are right, the president is asking God to step in, or why the administration spent all year using the wrong legal authority to support the president’s policy initiative. Their seeming indifference, however, also obscures the new legal and political obstacles that the Trump administration would confront. The fallback effort would not be as simple or straightforward a matter as they have claimed.
It is true that the administration could use other statutes to replicate (largely, though probably not entirely) the current tariff regime in the short term. But a new set of questions would immediately emerge — concerning both the process for importers to obtain refunds on previously imposed tariffs and the legal scope of the statutes that the Trump administration might use going forward.
In terms of dealing with what has already transpired, we have seen a host of businesses — most notably Costco — file lawsuits to ensure that they can obtain refunds from the government in the event that the IEEPA tariffs are thrown out. One reason for this is to position themselves ahead in the line of companies that would receive refunds.
But another reason — one that has gotten comparatively little attention — is that the companies may not fully trust the Trump administration to manage the refund process in good faith without judicial oversight, according to Timothy Meyer, a law professor and expert on international trade law whom I first spoke with shortly after the very first round of IEEPA tariffs in February. In October, he published a white paper on what could happen if the Supreme Court rules against the Trump administration.
In particular, Meyer told me, Bessent and other members of the administration have spent months telling the public and the courts that refunding the IEEPA tariffs would lead to a fiscal calamity. The efforts by Bessent and others “to use refunds as a weapon in the litigation, kind of ham-handedly,” Meyer said, “has really just eviscerated any confidence that anyone would have that the administrative process would be administered efficiently, quickly and in good faith.”
The administration would also have to take a position on whether the injunction on collecting IEEPA tariffs that may result from the Supreme Court’s ruling would apply only to the small number of businesses and states that have sued in court, or whether it would apply on a nationwide basis. That issue arises from the Supreme Court’s decision earlier this year limiting the availability of nationwide injunctions, and it is one that the U.S. Court of Appeals for the Federal Circuit explicitly left open in its ruling against the government on Trump’s tariffs.
The litigants have good arguments in favor of a nationwide injunction — in particular, that the states require one to obtain complete relief, and that the trial court here (the U.S. Court of International Trade) is entitled to broader injunctive authority because it is a specialized court that was created by Congress for the specific purpose of administering our trade laws. But it is possible for the White House to put up a fight on this question, which could drag out the refund process even further.
“People increasingly suspect the Justice Department will drag this out for as long as possible,” Meyer told me. In fact, as two of my POLITICO colleagues reported over the weekend, the administration is rushing to deposit the IEEPA tariff revenue into the U.S. Treasury as part of an apparent bid to make it more difficult for companies to obtain refunds if the administration loses before the Supreme Court.
Things could also get murky on how the Trump administration seeks to fill the gap in legal authority for Trump’s tariff regime if the Supreme Court rules against him. Two statutes may come into play quickly.
The first is Section 122 of the Trade Act of 1974, which authorizes the president to impose a tariff of up to 15 percent in order to address “large and serious United States balance-of-payments deficits.” This could be used to replicate the administration’s 10 percent baseline tariff in the short term.
Under the terms of the statute, however, the tariff must be “nondiscriminatory,” which would seem to prevent the administration from making any one-off concessions with trading partners — something the United States has done in negotiations with a host of countries. The tariff also cannot be imposed for more than 150 days “unless such period is extended by Act of Congress,” and it seems extraordinarily unlikely the votes are there on Capitol Hill.
Perhaps the Trump administration would try to unilaterally implement these tariffs in consecutive 150-day increments without congressional approval. That would be challenged on obvious textual grounds, but as Meyer told me, the Court of International Trade has often been very deferential to the executive branch in its interpretation of the tariff laws. As wild as it may seem, the administration could win this particular dispute in court.
The second key statute is likely to be Section 338 of the Tariff Act of 1930, which authorizes the president to impose tariffs of up to 50 percent if another country is discriminating against U.S. trade, but this too could precipitate a variety of legal questions. Section 338 has never been used before to impose tariffs (though, to be clear, there is no question that the statute authorizes them), so the relevant legal questions have not been resolved by courts.
One question likely to arise is whether the government can immediately impose tariffs under the statute or must first undertake an investigation concerning the alleged discriminatory practices at issue in the relevant countries.
“The way the statute is written, it calls for [an investigation by the U.S. International Trade Commission],” Meyer said, “but it doesn’t appear to make the ITC investigation a predicate to the president’s actions.”
Here, too, the Trump administration could be the beneficiary of the Court of International Trade’s historical deference to the executive branch in interpreting tariff statutes. But there is “a plausible argument,” as Meyer put it, that the government must first undertake the sort of investigation that other statutes explicitly require. That would take some time, preventing Trump from immediately reimposing tariffs.
Those two statutes — Section 122 and Section 338 — could form the basis of a stopgap framework for tariffs across the world if the administration loses before the Supreme Court, though it could be messy.
The administration also has a few other options to achieve much of its trade policy objectives through other, more narrowly tailored statutory provisions — but they would lack the sweeping nature that Trump clearly prefers.
These include Section 232 of the Trade Expansion Act of 1962, which authorizes the president to impose tariffs when the secretary of Commerce determines after an investigation that goods are being imported in a manner that threatens to impair national security. The Trump administration has already used this provision — for instance, as the basis for tariffs on steel, aluminum and derivative products like cars and car parts — and it has a number of Section 232 investigations that are already underway.
Another provision that the Trump administration has already used and is likely to fall back on is Section 301 of the Trade Act of 1974, which authorizes the government to impose tariffs on foreign countries when the U.S. Trade Representative determines after an investigation that they have used “unjustifiable,” “unreasonable” or “discriminatory” trade practices against the U.S. There are a variety of Section 301 investigations that are already pending, including as to China.
“You can get as much negotiating leverage as you need from targeting individual sectors and individual countries — individual sectors under 232, individual countries under 301 — without needing these broad-based tariffs,” Meyer said.
Using those tools more expansively, he said, would allow the Trump administration to achieve “relatively more well-defined negotiating objectives, as compared to the IEEPA tariffs, where the negotiating objectives seem to basically be to extract something” — even just “vague promises” — from trading partners.
Given all this, why did the administration spend all year using IEEPA in the first place if they had these other legal tools available to them?
One possibility is that administration officials understood the litigation risks surrounding IEEPA but wanted to quickly impose sweeping and punitive tariffs upon entering office, secure a bunch of trade deals and simply see what happens in the courts. Another possibility is that they misjudged the situation entirely and actually thought that they were on firmer legal ground than they really were.
Either way, if the Supreme Court rules against the administration, this will have turned out to be very subpar lawyering — a persistent theme of Trump’s second term already.
Beyond the legal fallout of a ruling against Trump, there are key political and policy implications to confront.
For starters: What happens to the various “trade deals” with foreign countries that were announced following negotiations that were held under the threat of IEEPA tariffs?
None of these deals are legally binding — the Trump administration has not even asked Congress to enact them into law — so it is possible that those foreign governments will want to reopen negotiations and withdraw some of their concessions. And it is not clear how effective the Trump administration would be in managing these negotiations given their very spotty record to date. (Remember “90 deals in 90 days”?)
On top of that, the administration — and some of its most senior officials — will have lost serious credibility both domestically and on the global stage.
In May, for instance, Bessent, Secretary of State Marco Rubio, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer all submitted declarations to the Court of International Trade that claimed, in a variety of ways but in consistently over-the-top language, that a court ruling against the IEEPA tariffs would plunge the U.S. into domestic and international turmoil.
What will they have to say if — or when — that does not come to pass? They will have bungled the president’s signature policy initiative while misleading the courts and the public and antagonizing our allies and adversaries alike all year.
Last but not least: How will Republicans in Congress respond to a loss at the Supreme Court?
Trump may, for instance, want them to try to legislatively extend the duration of Section 122 tariffs beyond the 150 days specified in the statute. That would put them squarely on the hook for facilitating an economic policy that is wildly unpopular. Roughly two-thirds of Americans have repeatedly told pollsters that they oppose Trump’s tariffs.
Even if congressional Republicans avoid passing legislation to shore up Trump’s agenda, they face a potentially serious electoral liability if he keeps up his aggressive push for tariffs. They have largely let Trump have his way all year — on tariffs, on spending and beyond — but the 2026 midterms are fast approaching, and “affordability” is on the top of voters’ minds. Trump is also very unpopular at this point, with one polling aggregator pinning his net approval rating at -11 points as of this writing, thanks in large part to voters’ persistent dissatisfaction with the economy.
Under the circumstances — heading into a midterm election that could easily cost Republicans their House majority — you might expect the president’s allies in Congress to lobby the White House to back off the endless tariff saber-rattling. That would serve the political interests of both congressional Republicans and the president, who is likely to face an onslaught of investigations from Democrats if they retake the House and perhaps even a third impeachment.
By all accounts, however, Trump is a true believer on tariffs, and he appears poised to plow forward even if he suffers a major setback at the Supreme Court. In the process, he could end up dragging his own party down with him.
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