What happens when a president’s major policy faces a potential roadblock from the highest court in the land? President Trump is preparing a clever backup plan as the Supreme Court weighs whether his emergency tariff powers are legal.
Trump develops strategic backup plan as Supreme Court deliberates on contested emergency tariff authority legality.
The Court heard arguments on November 5, 2025, about Trump’s use of the International Emergency Economic Powers Act to impose tariffs. This 1977 law lets presidents regulate imports during national emergencies, but it never explicitly mentions tariffs. Trump’s team argues that regulating imports naturally includes adding extra costs through tariffs.
The administration justified these tariffs by declaring emergencies over fentanyl trafficking and trade deficits with countries like China, Mexico, and Canada. However, critics question whether long-standing trade imbalances really count as “unusual and extraordinary threats” that warrant emergency powers.
While waiting for the Court’s decision, Treasury Secretary Scott Bessent revealed in September that the administration is eyeing Section 338 as a backup option. This little-known provision sits within trade law and offers a completely different legal foundation for tariffs. Think of it as having a spare key when your front door might be locked.
Section 338 has never been used before, making it uncharted territory. Unlike emergency powers, this approach would require different justifications but might face fewer legal challenges. The administration also has other trade law sections available, creating multiple pathways to the same destination. Section 338 allows tariffs up to 50% for discriminatory practices.
The Supreme Court’s decision timeline remains uncertain. After their November 7 conference, justices typically spend weeks or months crafting opinions. The Court granted fast-track review for two combined cases challenging the tariffs. If invalidated, the tariffs have already collected over $100 billion in revenue, creating massive refund challenges for the government.
Lower courts have consistently ruled against the emergency tariff approach. The Federal Circuit affirmed these rulings in August, prompting the Supreme Court appeal. If the justices agree with lower courts, Trump’s backup plans become vital.
This situation resembles having multiple routes to reach your destination when traffic might block your preferred highway. While Section 338 and other trade authorities offer narrower paths than sweeping emergency powers, they could provide more solid legal ground for achieving similar policy goals. Investors should focus on defensive strategies when market volatility increases due to policy uncertainty.
