President Donald Trump is racing to replace tariffs the Supreme Court struck down in February, after the ruling wiped out the biggest and boldest of his import taxes and forced the administration to send refunds to importers. The White House had used those tariffs to bring in revenue last year, when the U.S. Treasury swelled with money from Trump’s double-digit taxes on imports from almost every country on earth.
Who Pays When the State Rewrites the Rules
Importers got the bill first. Then the refunds. Then the scramble for a new legal hook. The administration first turned to Section 122 of the Trade Act of 1974 to impose 10% tariffs globally after the court setback, but that authority lasts only 150 days. Trump’s Section 122 tariffs expire on July 24, and Congress would have to extend them, something lawmakers are unlikely to do as the Nov. 3 midterm elections approach amid voter discontent over the high cost of living.
That’s the machinery at work: one branch of power knocked down, another one rushed in to keep the tariff wall standing. The administration’s more durable option is Section 301 of the same 1974 trade law, which allows the president to impose tariffs and other sanctions against countries found to engage in “unjustifiable,” “unreasonable” or “discriminatory” trade practices. Trump used Section 301 to impose big tariffs on China in his first term and is using it again, including when he announced 25% tariffs on some Brazilian imports late Wednesday, accusing Brazil, the world’s 11th-biggest economy, of a host of unfair trade practices.
Trade attorneys and analysts say they expect the administration to beat the clock and replace the Section 122 tariffs with bigger Section 301 tariffs by the July 24 deadline. Trade lawyer Ryan Majerus, a partner at King & Spalding and a trade official in Trump’s first administration and in President Joe Biden’s, said, “They’re going to raise the tariff wall again.”
The Legal Trapdoor They’re Using
Trump last year invoked the 1977 International Emergency Economic Powers Act to slap big tariffs on most of the world’s countries, justifying the levies by labeling America’s longstanding trade deficits a national emergency. The Supreme Court ruled in February that the president couldn’t use that emergency powers law to impose tariffs at all. The legal defeat meant the administration had to send refunds to importers that had paid the levies.
The numbers tell the story of a state trying to keep the money flowing after the court clipped one of its favorite tools. Revenue from import taxes peaked at more than $31.4 billion last October. After the Supreme Court ruling, it fell to $22 billion in both March and April. As refund checks went out faster than revenue from the Section 122 and other tariffs came in, the number turned negative: a $42 million shortfall in May was followed by a $25.6 billion loss in June.
Trump and Treasury Secretary Scott Bessent have vowed to use other legal authorities to recoup the lost income. Section 301 gives the president power to impose and adjust tariffs in response to other countries’ trade practices, but the administration must first collect comments and hold hearings. There are no limits on Section 301 tariffs, which expire after four years but can be renewed.
That shift would give Trump more flexibility than he had under the emergency tariffs, but not the ability to change them on a whim. Businesses have been frustrated by the uncertainty over tariff policy, which has made them hesitant to invest and make decisions because they do not know what the trade rules will be.
Sarah Bianchi, a former U.S. trade official who is now chief strategist of international political affairs at the investment research firm Evercore ISI, said a switch to rule-bound Section 301 tariffs would mean “there’s less uncertainty but not no uncertainty.”
What They’re Calling Order
The administration has launched two major Section 301 investigations as part of its effort to replace lost tariff revenue. One accuses 60 countries, accounting for 99% of U.S. imports, of failing to do enough to crack down on imports created by forced labor. The other is investigating whether 16 U.S. trading partners, including China, the European Union and Japan, are overproducing goods, driving down worldwide prices and putting American manufacturers at a disadvantage.
U.S. Trade Representative Jamieson Greer proposed tariffs last month under Section 301 in the forced-labor case: 10% on 16 countries and 12.5% on 44. Those rates are the same as or slightly higher than the 10% Section 122 levies they would replace. Greer’s office is still receiving public comments and has not imposed the tariffs yet.
Nathaniel Halvorson, a partner at the Baker McKenzie law firm and a former U.S. trade official, said he expects Greer’s office to get the forced-labor levies in place in time so there won’t be much, if any, “daylight” between them and the expiring Section 122 tariffs. “Really, they’re operating about as fast as legally possible,” he said.
The administration has not finished the other Section 301 investigation into alleged overproduction by 16 countries. Majerus expects more big tariffs in that case, likely in a month or two, and said he suspects they will be timed to take effect only after the midterm elections “for obvious reasons.” Trump, who has called himself “Tariff Man,” has made clear he wants to bring back the big, worldwide import taxes he imposed in 2025. Bianchi said the new Section 301 investigations look like a pretext to do that and could face legal challenges. “Section 301s have been pretty legally durable,” she said. “But no one has tried to use it to basically put in place universal tariffs. I think there will be legal challenges.”
The whole operation reads like a familiar script: the powerful lose one legal weapon, then reach for another. The people who pay at the bottom get tariffs, uncertainty, and the cost of a policy fight they never asked for. The apparatus keeps moving. The bill does too.