The Trump tariff fallback plan is quietly moving into high gear in Washington as the White House braces for a potentially damaging Supreme Court ruling on one of the president’s most powerful trade tools.
Key Points
While publicly projecting confidence, senior officials across the administration are mapping out ways to keep tariffs in place — and reimpose them quickly — if the justices decide to strip away a key authority that underpins many of the current levies. The outcome could reshape how the administration taxes imports, upend billions in tariff revenue and inject new uncertainty into global trade.
White House Quietly Builds Trump Tariff Fallback Plan
Behind the scenes, both the Commerce Department and the Office of the US Trade Representative have been studying backup options, according to US officials familiar with the effort. The Trump tariff fallback plan centers on alternative legal authorities, including Section 301 and Section 122 of the Trade Act, that give the president unilateral power to impose duties.
These tools are meant to step in if the Supreme Court curbs the administration’s use of the International Emergency Economic Powers Act, or IEEPA. Trump has leaned heavily on that statute to impose country-based “reciprocal” tariffs on imports worldwide and to target specific goods from China, Canada, Mexico and Brazil, including measures linked to fentanyl and an unsuccessful bid to halt the prosecution of former Brazilian president and Trump ally Jair Bolsonaro.
Officials know the alternatives are less sweeping. Some require lengthy investigations before tariffs can be implemented, while others come with time limits or caps on rates. They could also spark fresh legal fights of their own. Even so, one administration official, speaking on condition of anonymity, said tariffs will remain a core part of Trump’s economic strategy regardless of how the court rules.
“We’re waiting for a decision. We hope it’s going to be good, but if it’s not, we’ll do — we always find ways, you know, we find ways,” Trump said Wednesday, signaling how central the Trump tariff fallback plan has become to his trade agenda.
Supreme Court Case Puts IEEPA Powers and Revenue in Doubt
At the heart of the legal battle is Trump’s use of IEEPA to declare an economic emergency and impose broad, reciprocal tariffs on imports. During recent oral arguments, several justices appeared skeptical of that approach, raising the prospect that the court could roll back or even wipe out key IEEPA-based duties.
The stakes are high. Bloomberg Economics estimates that the effective tariff rate on US imports is about 14.4%, with more than half of that burden tied to IEEPA duties. A chart of tariff revenue shows roughly $159 billion collected through Sept. 23, including $51.6 billion from IEEPA reciprocal duties on imports from all countries and $36.6 billion from fentanyl-linked IEEPA tariffs.
Within that total, China and Hong Kong account for about $28.9 billion in fentanyl-related IEEPA duties, Mexico for $5.7 billion and Canada for $2.0 billion, along with smaller flows from countries such as Japan, Brazil and India. Much of that income could be at risk if the court strikes down the underlying authority.
An adverse ruling might also force the administration to refund more than $88 billion in duties already collected, according to Bloomberg Economics. That possibility adds another layer of urgency to the Trump tariff fallback plan, as officials look for ways to keep leverage over trading partners without triggering a wave of refunds and new litigation.
The timing and scope of the decision are uncertain. The justices could uphold the tariffs entirely, invalidate them in full or take a narrower path that trims Trump’s powers but leaves some measures intact. Any of those outcomes would reverberate through boardrooms and foreign capitals already wary of shifting US trade rules.
Trade Law Tools at the Center of the Trump Tariff Fallback Plan
With so much tariff revenue and policy influence on the line, the Trump tariff fallback plan leans heavily on existing but more traditional trade statutes. Chief among them is Section 301 of the Trade Act, the same authority the administration used in its first term to impose duties on a range of Chinese products.
Section 301 is designed to address unfair trade practices, but it typically requires a detailed investigation before tariffs can be imposed. The administration has already launched a 301 investigation against Brazil and maintains 301 tariffs on some Chinese goods, giving officials a base to build from if IEEPA is curtailed.
National Economic Council Director Kevin Hassett has said openly that Trump may turn to Section 301 or Section 122 to reimpose import taxes if the Supreme Court rules against the administration. “There are a lot of things that we could do so that we could reproduce the policies that we have right now with alternative authorities,” he said in a Nov. 13 interview with Carlyle Group co-founder David Rubenstein at an Economic Club of Washington event.
Section 122 would allow the president to impose tariffs of up to 15% — a rate Trump has favored in several deals with other nations — but only for 150 days unless Congress grants an extension. Trump trade adviser Peter Navarro has previously cited that strict time limit as a reason the administration has not leaned heavily on that tool so far. Still, it remains a key option inside the Trump tariff fallback plan.
Other laws already in use could also play a bigger role. Section 232 of the Trade Expansion Act has been the basis for tariffs on steel, aluminum, copper, autos, and auto parts, justified on national security grounds. The administration has announced new Section 232 investigations and duties, and some trading partners, particularly in Europe, complain that the expanding list of covered finished products undermines a cap on sectoral tariffs in the US-European Union trade pact.
Former US trade negotiator Wendy Cutler has suggested that this steady widening of Section 232 coverage may itself be part of an informal Trump tariff fallback plan. “I’m beginning to wonder whether this is part of the Administration’s Plan B should IEEPA be found unconstitutional,” she wrote on social media, adding that “it’s only a matter of time before the 232s cover most of our manufacturing base.”
Section 338 of the Tariff Act is another theoretical tool. It allows the US to retaliate against countries that discriminate against American commerce, with tariffs capped at 50%. But it has never been used and would likely face rapid legal challenges, making it a more speculative pillar of any Trump tariff fallback plan.
Legal Risks and Refund Fears Complicate Next Steps
Even if the administration can shift to Section 301, 122, 232 or 338, none of these paths is as straightforward as Trump’s current reliance on IEEPA. Many require formal investigations, public comment periods, and detailed findings before duties can be imposed or expanded. That makes the Trump tariff fallback plan slower and more complex to execute, especially if officials try to recreate a wide web of country-based levies.
Scott Lincicome, vice president of general economics at the Cato Institute, expects the administration to move quickly if the Supreme Court rules against it. “My expectation is they’ll move immediately to reinstate them,” he said, predicting that Trump’s team will “basically piece it all back together.”
But Lincicome also warned of the potential for confusion if officials push these authorities to — or beyond — their limits. He said Section 338 would be “subject to litigation, probably very quickly,” and expressed cautious optimism that the US might avoid a return to what he described as “2025 chaos.”
The legal questions around Section 122 are especially thorny. Officials must consider whether they can impose overlapping 122 tariffs, cancel them before the 150-day deadline and then restart the clock with new measures. Another issue is whether duties could be applied retroactively to sidestep the need to refund money collected under IEEPA if the court invalidates those tariffs.
“It would be a huge mess,” Lincicome said of the scenario in which the court strikes down IEEPA tariffs and the administration scrambles to replicate them through more constrained statutes. The complexity of such a move underscores why the Trump tariff fallback plan is being developed now, before the ruling arrives.
Businesses Brace for Uncertainty as Tariff Strategy Evolves
For companies that rely on global supply chains, the coming decision may determine not just their tax burden but also how predictable US trade policy will be in the months ahead. The Supreme Court’s ruling threatens to generate fresh uncertainty for businesses and foreign governments, even as the White House insists it will stay the course on tariffs.
The administration’s public stance has not wavered. “President Trump lawfully exercised the emergency tariff powers granted to the Executive Branch by Congress, and the Administration is confident in ultimate victory on this matter by the Supreme Court,” spokesman Kush Desai said. He added that officials are “always examining new ways to address America’s historic goods trade deficit and reshore the manufacturing that’s critical to our national and economic security.”
White House Deputy Chief of Staff James Blair recently put the administration’s odds of winning the case at “50-50, or better.” If the decision goes the other way, he said, officials would aim to restore any levies struck down. “There are tools that the president already has in existing authorities to pretty much just put it back through a different means,” Blair told an audience at a Bloomberg Government event. “We’ll see what they rule.”
Whatever the outcome, one thing is clear from the Trump tariff fallback plan: tariffs will remain at the center of the administration’s economic strategy. The question now is not whether the US will keep using duties as leverage, but which legal pathways it will rely on — and how much turbulence that shift will create for the global economy.
FAQ’s
What is the Trump tariff fallback plan?
The Trump tariff fallback plan is a set of backup strategies to keep or quickly reimpose tariffs if the Supreme Court limits his use of emergency powers under IEEPA. It leans on other trade laws like Sections 301, 122, 232 and 338.
Why is the Supreme Court reviewing Trump’s tariffs?
The Court is examining whether Trump’s use of the International Emergency Economic Powers Act to levy broad “reciprocal” tariffs is lawful. A ruling against the administration could erase key duties and force refunds of previously collected revenue.
What laws could replace IEEPA tariffs under the Trump tariff fallback plan?
Officials are eyeing Section 301 for unfair trade practices, Section 122 for short-term tariffs capped at 15%, Section 232 for national security cases and Section 338 for retaliation against discriminatory trade. Each has limits and may invite new legal challenges.
How could the Supreme Court decision affect businesses and tariff revenue?
If IEEPA tariffs are struck down, companies could see some import costs fall but face fresh uncertainty as new duties are rebuilt under other statutes. The government might also have to refund tens of billions of dollars in tariffs already collected.
