Treasury Secretary Discusses Backup Plans for Tariffs Amid Legal Uncertainty
On Monday, Treasury Secretary Scott Bessent stated that the Trump administration has multiple strategies in place to impose tariffs on foreign trading partners if the Supreme Court decides to eliminate fees set by the International Emergency Economic Powers Act (IEEPA).
“I would support the Supreme Court… the president’s authority under IEEPA,” Bessent mentioned in an interview released that day. He added, “There are also several other authorities available—though they’re not as effective or powerful.”
He pointed out that Section 338 of the Smoot-Hawley Act from 1930 could allow for new or additional requirements against countries that discriminate against U.S. commercial interests. This measure would enable tariffs of up to 50% on imports for a span of five months, he indicated.
Bessent expressed that, given the worsening deficit, they would keep exploring alternative measures to tackle trade imbalances.
His remarks came right after a 7-4 decision from the Court of Appeals on Friday, which dismissed the Trump administration’s claim that an emergency warranted sudden tariffs. The president has criticized this ruling.
“If this decision stands, it could potentially ruin the United States. As we enter this Labor Day weekend, let’s remember that tariffs are the best means to support American workers and businesses,” Trump stated.
The ruling by the Court of Appeals won’t take effect until October 14th, offering the administration an opportunity to appeal the decision to the Supreme Court.
The IEEPA requires that the country faces “an extraordinary threat” for the president to impose economic sanctions. Trump has claimed that the rise in fentanyl trafficking constitutes such an emergency, advocating for import taxes on foreign partners to address it.
“If this isn’t a national emergency, then what qualifies?” Bessent asked. “If there’s no fentanyl issue, when could I invoke IEEPA?”
He further noted that in light of increasing mortality rates and the growing trade deficit, leaders need to take decisive action to avoid potential crises.
Research from the Centers for Disease Control and Prevention (CDC) estimated that over 80,000 Americans—more than half due to fentanyl—died from drug overdoses last year.
Later that day, Bessent conveyed the administration’s confidence in the Supreme Court during another interview with Fox News. “I think we’ll prevail at the Supreme Court. We are approaching a crisis point, with massive trade deficits leading to financial instability,” he remarked. “So we need to navigate away from this looming crisis.”
