Trump tariffs struck down: What's his backup plan?

DW News · Feb 20, 2026 · Collected from RSS

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In a political setback for President Donald Trump, the US Supreme Court has struck down most of his tariffs put in place over the last 13 months, ruling that they are unconstitutional. Specifically, the court decided in a 6-3 vote that the president exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to implement many of his tariffs on US trading partners. What is the Trump administration likely to do next? In anticipation of the ruling, the US administration had made it clear it has been doing its homework for months. It is prepared to quickly implement new tariffs under other laws that allow the president to impose them. The Supreme Court's decision was not really about tariffs directly, but about presidential power and its constitutional limitsImage: Kent Nishimura/REUTERSEarlier this year, Jamieson Greer, the United States Trade Representative, said that similar tariffs could be reinstated almost immediately if they were struck down. To him, a decision by the Supreme Court to strike down the tariffs would be just a bump in the road, not a real roadblock. "The reality is the president is going to have tariffs as part of his trade policy going forward," Greer told the New York Times in a January interview. What are the government's options? Legal experts agree that there are a number of additional statutes the president could use to impose tariffs on certain products or trading partners without congressional backing. Here is a list of the most likely candidates: Section 122 of the Trade Act of 1974 allows the president to implement a tariff up to 15% for a maximum of 150 days at will. Congressional approval is only needed to continue after that period. Other options require either investigations or hard rationale and are slower to implement. Section 232 of the Trade Expansion Act of 1962 lets the president implement tariffs on national security grounds. These target specific sectors like steel, aluminum or lumber and need the support of a Commerce Department investigation. The president has successfully used these before. Section 301 of the Trade Act of 1974 lets the president implement tariffs on countries that are violating international trade agreements that harm US businesses. There is no limit on the tariff amount or duration, but they must be justified and supported by lengthy investigations.What about the tariffs already collected? Besides creating more uncertainty and new tariff workarounds, the Supreme Court ruling could also mean big refunds for the affected US importers. When the court heard oral arguments at the start of November 2025, they were particularly interested to know if tariffs are really just taxes on Americans by driving up costs for consumers. For 2025, US Customs and Border Protection, which is part of the Department of Homeland Security, collected $287 billion (€243 billion) in customs duties, taxes and fees. This is an increase of 192% compared to the previous year, according to calculations by the Federal Reserve Bank of Richmond. This money includes customs duties, taxes and fees for tariffs already in place when Trump took power, in addition to the major "reciprocal" tariffs added since he took office. Trump's first-year US economic record shows mixed signalsTo view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 videoImporters who paid these tariffs will be wondering how to get at least some of that money refunded. For those businesses, it will be a welcome reprieve. But with more tariffs likely on the way, it will not add much to their bottom line or planning security. For individuals, reimbursement will be more complicated since refunds would go to the importers — usually businesses — that paid the duties in the first place, not to consumers. For the government, it would be a double blow: Having to process all the returns will be a challenge, and the treasury will lose out on billions in revenue. Why did this reach the Supreme Court? Since the Trump administration started implementing its tariffs, hundreds of lawsuits have been filed trying to stop them. The case heard by the Supreme Court was brought by a group of businesses, including Learning Resources, Inc. Over the past 13 months, Trump has imposed tariffs by decree on many countries only to pause them or negotiate lower rates. Among other things, he has pointed to trade imbalances and drug smuggling as reasons to justify his actions. US-based businesses have complained about the extra costs of tariffs. Other critics have pointed out that many of the them have little to do with trade deficits and more to do with making countries bend to American will. Edited by: Ashutosh Pandey