Trump plans to replace tariffs, salvage trade deals after ruling

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(The Center Square) – President Donald Trump switched to his backup tariff plan after the U.S. Supreme Court said he couldn't use a 1977 law to impose sweeping tariffs.

Trump announced a fresh round of tariffs hours after the high court invalidated his use of the 1977 International Emergency Economic Powers Act to impose tariffs worldwide. Recent economic research found that Americans paid more than 90% of those import duties.

Trump said he would use other laws to keep the existing tariffs in place and that he would add a 10% global tariff.

"Today I will sign an Order to impose a 10% GLOBAL TARIFF, under Section 122, over and above our normal TARIFFS already being charged," Trump wrote in a social media post after the ruling.

Trump said that the other tariff laws he plans to use were mentioned in the Supreme Court decision. 

"It's a little more complicated, the process takes a little more time, but the end result is going to get us more money," Trump said.

The Supreme Court, divided 6-3, held that the 1977 law didn't give Trump expansive tariff powers to tax goods entering the country. Justices Clarence Thomas, Brett Kavanaugh and Samuel Alito dissented.

The president criticized the decision, but said the ruling won't stop his tariff plans.

Phillip Magness, senior fellow at the Independent Institute, said Section 301 of the Trade Act of 1974 would be the safest path forward, but the law comes with limits and restrictions.

"Section 301 has much stricter requirements that Trump must now follow to impose tariffs," he told The Center Square. 

Trump said Friday he plans to launch multiple trade investigations under Section 301.

Magness said Trump has other options as well. Another path would be Section 338 of the Smoot-Hawley Act of 1930. Treasury Secretary Scott Bessent and Jamieson Greer have hinted at this option in recent months. However, Section 338 could also face legal challenges.

"The Supreme Court majority apparently did not find this line of argument to be convincing, as only the three dissenters mentioned Section 338," Magness said. "This suggests that Trump would likely be overturned again in a future decision, setting into a pattern reminiscent of the Biden Administration's legal jockeying to reinstate student loan forgiveness after the Supreme Court overruled them."

Magness said Friday's ruling gives Congress an opening. 

"The ball is certainly in Congress's court now," he said.

Until earlier this month, the Republican-controlled House had given Trump wide leeway on tariffs. However, House Speaker Mike Johnson failed to extend a rule that had prevented Congress from taking up tariff matters when three members of his party joined Democrats to block the rule.

Rep. Jodey Arrington, chairman of the House Budget Committee, said Congress needs to step up to support the president.

"Congress should immediately codify the President's reciprocal trade agreements, which would make these deals more durable, entorceable, and effective in the long run," he said in a statement. "If this can't be done in a bipartisan fashion, Republicans should use reconciliation  – the most potent legislative tool in our toolbox-to safeguard our economic and national security interests."