• The Supreme Court invalidated Trump's use of the International Emergency Economic Powers Act for tariffs, forcing a shift to alternative legal authorities.
  • The administration can leverage Sections 301, 122, and 232 of the Trade Act of 1974 to reimpose tariffs, with experts predicting a swift reconstruction of the tariff landscape.
  • Importers face uncertainty over refunds for IEEPA tariffs, as the U.S. Court of International Trade oversees a complex process with potential timing constraints.

In a significant legal setback, the Trump administration is scrambling to maintain its aggressive tariff agenda after the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not authorize presidential imposition of tariffs. The decision, which struck down all tariffs imposed under that authority from the beginning, has sent shockwaves through trade circles and prompted a pivot to statutory powers under the 1974 Trade Act. According to people familiar with the matter, Treasury Secretary Scott Bessent indicated in December 2025 that the administration could "re-create the exact tariff structure" using alternative measures, underscoring a determined effort to uphold tariffs that had raised the average U.S. tariff rate from 2.5% to nearly 17% in a year—the highest since 1934.

The Court's ruling, which stated that "when Congress grants the power to impose tariffs, it does so clearly and with careful constraints," has ignited a flurry of activity within the administration to deploy other legal pathways. Section 301 of the Trade Act of 1974, which allows tariffs on countries engaging in unjustifiable trade practices, offers a robust but laborious option, requiring extensive investigations. Meanwhile, Section 122 permits temporary import surcharges of up to 15% for 150 days without prior investigation, providing a quicker, though capped, alternative. Georgetown trade law professor Kathleen Claussen noted, "It's hard to see any pathway here where tariffs end. I am pretty convinced he could rebuild the tariff landscape he has now using other authorities," highlighting the administration's strategic flexibility.

As the political and economic context intensifies, with tariffs central to Trump's second-term policies aimed at addressing trade deficits, the refund process for IEEPA tariffs adds another layer of complexity. The Supreme Court did not establish a clear mechanism, leaving it to the U.S. Court of International Trade to oversee refunds administered by U.S. Customs and Border Protection. Importers, who may face claims deadlines within two years of payment, are bracing for potential delays and legal hurdles. Efforts to reach the Treasury Department for comment on the transition timeline were unsuccessful, but sources indicate that Section 232 of the Trade Expansion Act of 1962, already used for national security tariffs on items like steel and aluminum, remains a key tool in the arsenal.

*Correction: An earlier version misstated the cap for Section 122 tariffs; it is up to 15%, not 20%.