As the Donald Trump administration urgently appeals to the Supreme Court to save its signature tariff policy, policy strategists and analysts suggest the administration has a “backup plan” that could keep the controversial duties in place, regardless of the high court’s final decision.
Legal Avenues Exist To Restore The Tariffs
The administration filed an appeal on Wednesday, asking for an expedited review after a federal appeals court declared last week that the president had overstepped his authority.
However, a note from LPL Research suggests the legal showdown may not be the final word. Chief Equity Strategist Jeff Buchbinder argues that even if the Supreme Court upholds the decision, other legal avenues exist to restore the tariffs, saying that the administration’s "backup plan is in place."
According to the analysis, the most likely path involves using Section 122 of the Trade Act, which allows for temporary tariffs for 150 days in response to large trade deficits.
This would provide a window for the U.S. Trade Representative to conduct investigations needed to impose longer-term tariffs under Section 301, which targets unfair trade practices.
SC Lifting Tariffs Could Only Be A Short-Lived Boost
While this process would create near-term uncertainty and a potential short-lived boost for corporate America if tariffs are temporarily lifted, LPL Research concludes the administration’s “long-term strategy… remains intact.”
With roughly $200 billion in annualized revenue at stake, the ultimate fate of the tariffs remains a pivotal issue for the U.S. economy, even beyond the upcoming Supreme Court battle.
See Also: Trump Administration Appeals ‘Illegal’ Tariff Ruling To Supreme Court; Asks For Swift Action
Trump Administration Appeals Tariff Ruling To SC
The court, last week, ruled that the use of the International Emergency Economic Powers Act (IEEPA) to impose the tariffs was illegal, stating, "The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution."
"If we don’t win that case, our country is going to suffer so greatly, so greatly," Trump said to reporters at the White House on Wednesday. He added that the tariffs were critical to trade agreements negotiated with major allies, including the European Union, Japan, and South Korea in recent months.
President Trump has vehemently defended the tariffs, warning in a Truth Social post that without them, "we would become a Third World Nation, with no hope of GREATNESS again." His administration’s appeal argues the lower court’s stay creates “legal uncertainty” that “gravely undermines” the president’s diplomatic power.
Price Action
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.54% at $643.74, while the QQQ advanced 0.79% to $570.07, according to Benzinga Pro data.
On Thursday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading in a mixed manner.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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