President Donald Trump has a “plan B” to impose 10% tariffs on all countries if the Supreme Court overturns his higher “Liberation Day” tariffs, Kevin Hassett, director of the White House National Economic Council, declared this Friday. The high court could rule on the president’s signature economic policy next week.
Key data
The Supreme Court is deliberating the legality of Trump’s sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA), including tariffs on China, Mexico and Canada, and “Liberation Day” tariffs on almost all other countries.
If the court declares those tariffs invalid, the White House has a “really solid plan B,” Hassett told Fox Business on Friday, saying Trump would immediately impose 10% tariffs “to make up for most of the margin” of the IEEPA tariffs that are being rescinded.
Those 10% tariffs would likely be imposed under Section 122 of the Trade Act of 1974, which allows presidents to impose tariffs of up to 15% for up to 150 days to resolve trade imbalances.
Trump would also impose longer-lasting tariffs under other laws, which allow tariffs to be imposed on specific industries or countries, Hassett said; However, these take longer to implement, so the 10% tariffs would be a stopgap measure in the meantime.
Plan B comes after Trump repeatedly expressed alarm about the possibility of the Supreme Court striking down his tariffs, calling them an existential threat to the U.S. economy and saying he will “go to hell” if the court rules against him.
Hassett said the administration has “high confidence” that the Supreme Court “will support us,” even as the justices noted during oral arguments in November that they were skeptical of the president’s enormous fees.
More context: US Supreme Court is about to issue rulings; Trump tariff case still pending
When will the Supreme Court rule on tariffs?
It is not clear: they do not announce when specific rulings will be issued. But the ruling on tariffs is likely to be issued as early as Tuesday. The decision will be known before the court’s term ends at the end of June.
What we don’t know
If the Supreme Court strikes down Trump’s tariffs, it is still unclear what will happen to the tariffs already paid by companies.
More than 1,000 companies have already filed preventive lawsuits asking the government to refund the tariffs they paid, if the Supreme Court determines that they were never legal.
It’s still possible that the court could rule that the tariffs are illegal, but only apply the ruling from now on and say that the government can keep the money it already collected in tariffs before the ruling was issued.
Read more: It would be practically impossible to return money raised by tariffs: Trump
Key context
Trump made tariffs the centerpiece of his economic agenda, imposing broad levies despite warnings from economists that this would raise consumer prices and hurt the economy.
After taking office, the president imposed tariffs on Canada, Mexico and China, before implementing more tariffs on imports from almost all other countries at a “Liberation Day” commemorative event in April.
These tariffs did not come into full effect until August, after the administration reversed the policy following the stock market destabilization that caused economic activity to plummet.
The Supreme Court addressed the legality of Trump’s tariffs after two lower courts struck them down, ruling that Trump had no authority under the IEEPA to impose them.
The IEEPA gives presidents the power to impose sweeping economic sanctions during national emergencies, but does not specify anything about tariffs.
Small businesses and Democratic-led states argued that Trump therefore has no legal authority to impose tariffs, and even if he did, there is no national emergency that would justify such a large-scale policy.
This article was originally published in Forbes US
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