Economist Magazine: Trump Tariffs Are Not Going Away
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The Economist recently analyzed Donald Trump’s use of tariffs ahead of the Supreme Court hearings that could redefine presidential power over trade. The hearings revolve around the question of whether the International Emergency Economic Powers Act (IEEPA)—a law passed in 1977 to let presidents act swiftly in genuine emergencies—can legally serve as the foundation for Trump’s sweeping tariff program. Trump has used IEEPA not only to target China and Mexico but also to impose worldwide tariffs without congressional approval. His justification has been that America’s long-standing trade deficit constitutes an “extraordinary threat” to national security, even though the U.S. economy has grown strongly since trade deficits first appeared in the 1970s. Lower courts have already questioned this logic, suggesting that IEEPA was never meant to cover routine trade measures. The Supreme Court’s hearings, which began November 5th, will decide whether Trump exceeded his legal authority in invoking the act to reshape global commerce by executive fiat.
If the Court strikes down Trump’s use of IEEPA, it would effectively dismantle a large portion of his current tariff regime. Analysts at the Yale Budget Lab estimate that the overall effective U.S. tariff rate would fall from roughly 17% to 9%, cutting in half the burden on imports overnight. Trump and his aides warn that this would “weaken” the United States and trigger economic turmoil, but that claim is exaggerated. His administration is already preparing alternative paths to rebuild the tariff structure, even without IEEPA. The most immediate fallback is Section 122, which allows a president to impose up to 15% tariffs for 150 days—a quick stopgap to avoid a total collapse in protection. From there, the White House could use Section 301 and Section 232, which permit tariffs after investigations into unfair trade practices or threats to national security, respectively. Both are slower, more bureaucratic tools but would ultimately allow Trump to recreate much of his tariff wall “brick by brick.” A more obscure option, Section 338, dating from the 1930s, even authorizes retaliatory tariffs up to 50% without long investigations, though no president has ever used it.
It is worth noting that virtually all steel tariffs were initiated using Section 301 and Section 232 tariffs, which are not the target of the Supreme Court’s hearings; however, the tariffs impact key steel consuming industries.
The most likely outcome according to The Economist, according to legal observers, is a partial curbing of IEEPA powers rather than a full invalidation. The Court is expected to reaffirm that presidents cannot invoke emergency powers for ordinary economic policy but might still allow IEEPA tariffs in narrowly defined security contexts. Such a ruling would reduce Trump’s flexibility and force his trade team to rely more heavily on formal investigations, lengthening the decision cycle but not dismantling the broader tariff strategy. Economically, that would mean continued uncertainty: if IEEPA tariffs are overturned, the federal government may owe around $140 billion in refunds to affected companies—equivalent to about 0.5% of GDP—which could act as an accidental stimulus just before the midterm elections. Yet, for manufacturers and global investors, the legal limbo would prolong what they dislike most about Trump’s trade policy: unpredictability. Even if the Supreme Court trims his authority, Trump will still find ways to keep tariffs central to his economic agenda. The difference will be procedural, not philosophical—the next phase of his trade war will be slower, more complicated, but every bit as disruptive.
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