White House Plan B for Trump Tariffs: What’s Next?

Have you ever wondered what happens when a bold economic move gets tangled in legal red tape? Picture this: a sweeping set of tariffs, designed to shake up global trade, suddenly faces a courtroom showdown. That’s exactly where we are with President Donald Trump’s tariff agenda in 2025, a policy that’s sparked heated debates, market jitters, and a looming Supreme Court battle. The White House, however, isn’t sweating it—or so they say. With a backup plan in the works, the administration is ready to pivot if the courts pull the plug on their trade strategy. Let’s dive into what this means, why it matters, and how it could reshape the U.S. economy.

The Tariff Tightrope: A High-Stakes Gamble

In early 2025, the Trump administration rolled out a series of aggressive tariffs, targeting imports from nearly every corner of the globe. These levies, ranging from 10% to 50%, were justified under the International Emergency Economic Powers Act (IEEPA), a 1977 law that lets the president regulate economic transactions during a declared national emergency. The reasoning? Issues like trade imbalances, border security, and the fentanyl crisis constitute “unusual and extraordinary threats” to the U.S. economy and security. It’s a bold move, but not without controversy. Critics argue it’s a stretch to call long-standing trade deficits an emergency, and federal courts have started to agree.

On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit delivered a blow, ruling 7-4 that Trump’s use of the IEEPA to impose tariffs was illegal. The court argued that Congress, not the president, holds the constitutional power to levy taxes, including tariffs. But here’s the kicker: the ruling won’t take effect until October 14, 2025, giving the White House time to appeal to the Supreme Court. And according to Treasury Secretary Scott Bessent, the administration is ready to fight—or pivot if needed.

If this is not a national emergency, what is? When can you use IEEPA if not for fentanyl?

– Senior administration official

Why the IEEPA Is Under Fire

The IEEPA is a powerful tool, but it’s not a blank check. Enacted to limit presidential overreach after decades of loosely defined emergency powers, it allows the president to regulate imports, freeze assets, or block transactions—but only in response to a clear national emergency. Historically, it’s been used for targeted sanctions, like freezing Iranian assets during the 1979 hostage crisis. Trump’s approach, however, is unprecedented. He’s declared emergencies over trade deficits and drug trafficking to justify broad tariffs, a move that’s raised eyebrows in legal circles.

Courts have pushed back, arguing that the IEEPA doesn’t explicitly authorize tariffs, which are essentially taxes. The Constitution grants Congress the power to impose taxes, and critics say Trump’s tariffs sidestep this authority. In May 2025, the U.S. Court of International Trade ruled that the tariffs were illegal because issues like trade deficits and fentanyl trafficking don’t meet the IEEPA’s threshold for an emergency. A D.C. district court went further, stating that the IEEPA doesn’t allow tariffs at all, citing the separation of powers.

Why does this matter? Because if the Supreme Court upholds these rulings, it could limit the president’s ability to unilaterally shape trade policy. That’s a big deal, especially for an administration banking on tariffs to boost domestic manufacturing and address economic concerns.

The White House’s Plan B: A Smoot-Hawley Revival?

So, what happens if the Supreme Court shoots down the IEEPA-based tariffs? Enter Plan B. The White House is eyeing alternative legal authorities, and one option stands out: Section 338 of the Smoot-Hawley Tariff Act of 1930. This dusty old law allows the president to impose tariffs of up to 50% for five months if foreign imports are deemed to harm domestic commerce. It’s not as flexible as the IEEPA, but it’s a viable fallback.

I find it fascinating—maybe a bit ironic—that a law from the Great Depression era could be the administration’s lifeline. The Smoot-Hawley Act is infamous for escalating global trade tensions in the 1930s, so dusting it off feels like a gamble. Still, it’s a signal that the White House is prepared to dig deep into the legal toolbox to keep its tariff agenda alive.

Bessent, in a recent interview, expressed confidence that the Supreme Court will uphold the IEEPA tariffs. But he’s not putting all his eggs in one basket. He’s crafting a legal brief that emphasizes two key points: the fentanyl crisis and persistent trade deficits. The brief will argue that the roughly 70,000 annual fentanyl-related deaths constitute a national emergency, justifying swift action. It will also highlight how trade imbalances, which hit $103.6 billion in July 2025, threaten the U.S. economy’s long-term stability.

We’ve had these trade deficits for years, but they keep getting bigger and bigger. We are approaching a tipping point … so preventing a calamity is an emergency.

– Senior administration official

Economic Ripples: What’s at Stake?

Tariffs are more than just a policy wonk’s obsession—they hit wallets hard. The Trump tariffs, which have pushed the average U.S. tariff rate to 18.6% (the highest since 1933), are estimated to cost households an extra $1,300 annually. That’s not pocket change. Businesses importing goods pay these levies, and guess who ends up footing the bill? Yup, consumers like you and me, as companies pass on the costs.

The economic fallout doesn’t stop there. The tariffs have sparked trade wars with Canada, Mexico, and China, disrupting supply chains and raising prices. For example, the automotive industry, which relies on parts crossing borders multiple times, could see costs skyrocket. A Ford Bronco assembled in Mexico might carry a 25% tariff, hurting workers in the U.S. Midwest and Southeast. And don’t get me started on critical minerals—tariffs on Canadian uranium and nickel could weaken U.S. industries like nuclear energy and defense.

Here’s a quick breakdown of the economic impacts:

• Higher Consumer Prices: Tariffs increase the cost of imported goods, from cars to electronics.
• Supply Chain Disruptions: Industries like automotive and tech face delays and higher costs.
• Retaliatory Tariffs: Canada and China have already hit back, hurting U.S. exporters.
• Economic Growth Concerns: The Federal Reserve and OECD have downgraded GDP projections.

Despite these challenges, the administration argues that tariffs protect American jobs and manufacturing. But economists aren’t so sure, pointing out that trade deficits aren’t inherently bad and that tariffs often do more harm than good.

The Fentanyl Factor: A Legitimate Emergency?

One of the administration’s strongest arguments for the tariffs is the fentanyl crisis. With 70,000 deaths linked to the drug each year, it’s hard to argue this isn’t a serious issue. The White House claims tariffs on countries like China, Mexico, and Canada will pressure them to crack down on drug trafficking. But here’s where it gets tricky: courts have ruled that the link between tariffs and stopping fentanyl is shaky at best.

In one case, a federal court argued that tariffs don’t directly “deal with” the drug crisis as required by the IEEPA. It’s a fair point—slapping a tax on imported cars or electronics doesn’t exactly stop illegal drugs from crossing borders. Still, the administration sees tariffs as a bargaining chip to force other countries to act. Whether this strategy works remains to be seen, but it’s a bold play in a high-stakes game.

Global Trade Tensions: A New Cold War?

The tariffs aren’t just a domestic issue—they’re shaking up global trade. Take India, for example. The U.S. slapped a 50% tariff on many Indian imports, citing the country’s massive purchases of Russian oil. India’s imports from Russia jumped from $2.31 billion in 2021 to $53 billion in 2024, fueling accusations that New Delhi is bankrolling Moscow’s war efforts. Trump has hinted that India’s offer to lower its own tariffs to zero might be too little, too late.

Meanwhile, China’s role in the global trade drama is more nuanced. The White House has extended a tariff pause with Beijing until November 10, 2025, partly because China was already a major buyer of Russian oil before the Ukraine conflict. This selective approach has raised questions about fairness and consistency. Are tariffs really about security, or are they a geopolitical tool?

Here’s a snapshot of the global impact:

What’s Next for the Supreme Court?

The Supreme Court looms large over this saga. With a 6-3 conservative majority, including three Trump appointees, some speculate the court might lean in the administration’s favor. But recent rulings suggest otherwise. The court’s major questions doctrine requires clear congressional authorization for significant executive actions, and the IEEPA’s vague language might not cut it.

If the court rules against the tariffs, the White House will likely pivot to alternatives like the Smoot-Hawley Act or other trade laws, such as Section 232 of the Trade Expansion Act. These options, however, come with limitations—Section 232 requires lengthy investigations, and Smoot-Hawley’s tariffs are capped at five months. The administration’s ability to act quickly could be hamstrung.

Personally, I think the court’s decision will hinge on how it views the IEEPA’s scope. If the justices see tariffs as a tax rather than a regulation, the administration’s case could crumble. But if they buy the argument that trade deficits and fentanyl are emergencies, the White House might just pull this off.

The Bigger Picture: Power and Precedent

Beyond the dollars and cents, this tariff battle is about power. Who gets to control trade policy: the president or Congress? The IEEPA was meant to give presidents flexibility in crises, but Trump’s broad use of it has sparked fears of executive overreach. If the Supreme Court upholds the tariffs, it could set a precedent for future presidents to wield emergency powers in ways Congress never intended.

On the flip side, a ruling against the tariffs would reaffirm Congress’s authority over taxes and trade. It could also force the administration to negotiate with lawmakers, a process that’s slower but arguably more democratic. Either way, the outcome will shape U.S. trade policy for years to come.

Here’s what to watch for:

1. Supreme Court Timeline: Will the court take the case on an expedited basis?
2. Alternative Strategies: How will the White House use laws like Smoot-Hawley?
3. Economic Fallout: Will tariffs continue to drive inflation and trade wars?
4. Global Reactions: How will allies and adversaries respond?

Final Thoughts: A Trade War on the Horizon?

As I write this, the U.S. economy is at a crossroads. Tariffs have already reshaped global trade, raised prices, and sparked legal battles. The White House’s backup plan shows it’s not backing down, but the road ahead is uncertain. Will the Supreme Court greenlight Trump’s tariff agenda, or will it force a rethink? And what does this mean for everyday Americans facing higher costs?

Perhaps the most interesting aspect is how this saga reflects the broader tug-of-war between executive power and checks and balances. It’s a reminder that economic policy isn’t just about numbers—it’s about politics, power, and the future of global trade. Stay tuned, because this story is far from over.