Finding Plan B

Commentary by William Alan Reinsch

Published September 15, 2025

Last week, I attempted to dissect the pending tariff litigation, which is now going to the Supreme Court. In doing that, I noted that the administration is working on developing its plan B in the event the justices decide against the administration, which may indicate that they think their legal position is weak. Most of the analysis of possible alternative ways to maintain the tariffs has focused on other statutory provisions that give the president authority to impose tariffs. Warren Murayama and I discussed those in a paper nearly a year ago, and I will reprise that here and also offer a different approach. Here are the generally agreed-upon relevant statutory provisions.

Section 122 of the Trade Act of 1974. This provision was put into legislation in response to President Richard Nixon's declaration of an emergency and imposition of tariffs in 1971. It permits the president, in the case of a balance of payments crisis, to impose tariffs, but the amount is limited to 15 percent and the duration to 150 days, unless extended by Congress. This authority is narrow and limited, as opposed to that in the International Economic Emergency Powers Act (IEEPA), but it is intended to deal with the kind of emergency Trump claims currently exists. Its main drawback is the 150-day limit, which handicaps it as an instrument of leverage.

Section 201 of the Trade Act of 1974. This is the "safeguard" provision of U.S. law designed to permit relief for industries injured by an increase in imports. It is a petition process to the International Trade Commission (ITC) in which aggrieved parties must show they are seriously injured. There is a broad range of relief permitted, but it is limited to four years, with a possible extension of four more. Its drawbacks are that it requires an investigation and a favorable ITC vote before the president can act; it is limited in duration; and the World Trade Organization requires countries employing it to pay compensation to those whose trade has been harmed by the relief.

Section 232 of the Trade Expansion Act of 1962. This is the well-known national security threat provision that Trump is already using on steel, aluminum, autos, and copper, with a number of others pending. It gives the president broad authority to take action if he determines that imports threaten U.S. national security. Its drawbacks are that it requires an investigation that can take up to 270 days and that the president must proceed sector-by-sector. It would be difficult for him to simply assert that all imports are a national security threat. Even if he uses it more narrowly, he may be subject to lawsuits arguing that the imports in question do not harm national security. An obvious example is furniture, which Trump has added to the lumber investigation. Arguing that desk, table, and chair imports are a national security threat doesn't pass the laugh test, although finding a judge willing to second-guess the president on that would be a challenge.

Section 301 of the Trade Act of 1974. This section permits the president to take action to obtain the removal of any act, policy, or practice of a foreign government that is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce. Trump used this provision to impose tariffs on China in his first term. It requires an investigation, which can take up to one year, and, because technically the decision is made by the U.S. Trade Representative, the process is subject to the Administrative Procedures Act, which imposes a number of procedural requirements that prolong the process.

Section 338 of the Tariff Act of 1930. This provision permits the president to impose tariffs up to 50 percent on any country that discriminates against U.S. products. It would also allow the president to block imports completely for any country that increases their discrimination against U.S. products. Drawbacks are hard to predict since the provision has never been used, but my reading of it is that the president would have to show that a country was discriminating specifically against the United States. In other words, a trade barrier, however unfair, that applied to everybody would not justify action.

Trump probably selected IEEPA as his tariff tool of choice because it had the fewest procedural limitations and the vaguest threshold for action (at least in his opinion). All the others are less desirable because the rationale for action is too specific, or the procedural requirements stretch out the process and prevent quick action. Section 232 is the least constrained and one with which the administration has plenty of experience, although using it to replace Trump's IEEPA-based tariffs would require such a broad definition of national security that he could well have credibility problems in the courts when he is sued, and he no doubt would be. Using any of these would also prolong the uncertainty about his policies, which is making potential investors cautious.

Finally, Trump might choose a non-legislative approach. He could argue that the tariffs covered by the agreements that have been reached are imposed pursuant to those agreements rather than IEEPA and thus are not affected by the court's decision. That would mean ignoring Congress's role in setting tariffs, but he has already essentially done that. The agreement tariffs, plus the Section 232 tariffs, which are not covered by the litigation, constitute a substantial chunk of U.S. trade, so Trump could salvage much of his trade program. If Trump did that, he would be sued-of course-but that litigation would consume another year or two with the tariffs likely left in place. That would prove, as I said last week, that the real winners in all this are the lawyers. If anybody thinks court decisions are going to throw them a lifeline, they're mistaken. These tariffs are not going away easily.

William A. Reinsch is senior adviser and Scholl Chair emeritus with the Economics Program and Scholl Chair at the Center for Strategic and International Studies in Washington, D.C.

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