Trump Admin Prepares 'Plan B' for Tariffs Amid Court Ruling

The Trump administration is preparing a "Plan B" to maintain tariffs after a US court ruled that the president overstepped his authority. The new approach would rely on provisions under the Trade Act of 1974, starting with a temporary 15% tariff for 150 days, followed by more targeted duties using a separate clause aimed at unfair trade practices. Officials are considering a two-step approach to address trade imbalances and protect the president's trade agenda.

In response to a US court ruling that President Trump overstepped his authority in imposing sweeping tariffs, the administration is preparing a new approach to maintain its trade agenda. The Trump administration is considering a two-step plan that relies on provisions under the Trade Act of 1974 [1].

The first step involves invoking Section 122 of the Trade Act of 1974, which permits the President to impose short-term tariffs of up to 15% for 150 days to address trade imbalances [1]. This temporary measure is aimed at buying time to implement a longer-term solution under Section 301 of the same act, which is seen as more legally sound [1].

The second step involves using Section 301 of the Trade Act of 1974 to impose more targeted duties in response to unfair trade practices. This approach provides broader and more enduring authority, with no cap on the size or duration of tariffs [2].

The Trump administration is also exploring other trade laws, including the Smoot-Hawley Tariff Act of 1930 and provisions linked to national security [1]. These alternatives are being considered to preserve tariff continuity and maintain leverage in ongoing trade negotiations.

The court ruling that struck down the existing tariffs has opened the door to a broader US-EU trade deal by removing one of the major points of tension [3]. Despite the setback, the administration believes that shifting to other statutory tools could preserve tariff continuity and maintain leverage in trade negotiations.

References:

[1] https://www.business-standard.com/world-news/trump-tariff-plan-b-us-trade-act-1974-court-ruling-125053000224_1.html
[2] https://www.cnbctv18.com/market/four-ways-the-trump-administration-can-offset-the-trade-court-ruling-on-reciprocal-tariffs-19612299.htm
[3] https://www.wgbh.org/news/2025-05-28/federal-court-keeps-trump-tariffs-in-place-for-now