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By Robert Alexander
Senior Crime & Court Reporter
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Treasury Secretary Scott Bessent said the Trump administration has a backup strategy to keep broad tariffs in place if the U.S. Supreme Court strikes down the emergency-powers authority currently used to impose them.
Asked at the DealBook Summit "what kind of planning you've been doing" for a scenario in which the court strikes down the tariffs, Bessent outlined how the White House could recreate its tariff system.
Newsweek contacted the Treasury's Office of Public Affairs for comment via email outside of normal office hours on Thursday.
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Why It Matters
The Supreme Court is weighing whether Trump can use the International Emergency Economic Powers Act to levy sweeping tariffs; lower courts said the law doesn’t clearly authorize such duties, and a ruling is expected this month.
The decision could reshape U.S. trade policy and the president’s power to impose tariffs, affecting negotiations with major trading partners and potential refund claims by some importers.
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What To Know
Bessent was interviewed by New York Times journalist Andrew Ross Sorkin at the DealBook Summit on December 3 in New York's Lincoln Center. Sorkin opened the conversation with what he viewed as the biggest philosophical and practical shift in U.S. economic policy: tariffs.
He asked Bessent to explain how his thinking on tariffs had evolved—specifically noting that Bessent once argued tariffs were inflationary and unlikely under Trump, and asking him to walk through why his position had changed since becoming Treasury Secretary.
Bessent said: "I have been very consistent on this, the tariffs are a shrinking ice cube. The ultimate goal is to rebalance trade and to bring back domestic production," adding "I don’t believe tariffs are a tax."
Bessent Challenges Media Narrative On Supreme Court Signals
A ruling could come "at any moment," Bessent added, but he said he remained "optimistic" about the outcome. He disputed media characterizations that several justices appeared skeptical of the administration’s tariff authority.
Referencing Justice Amy Coney Barrett, Bessent said her comment that unwinding the tariffs "would be a mess" was interpreted incorrectly. According to Bessent, Barrett "actually meant it as we’ve got to be very judicious… very prudent about doing this."
Bessent acknowledged the administration had prepared alternative legal tools should the Court rule against them.
"We can recreate the exact tariff structure with 301s, with 232s, with the—I think they're called 122s," he said, referring to three separate statutory authorities governing trade actions.
While some authorities, such as Section 122, do not allow permanent tariffs, others could replicate core elements of the current system.
What Are 301s, 232s And 122s?
Section 301 of the Trade Act of 1974 allows the U.S. to impose tariffs or other trade measures in response to unfair trade practices by foreign countries, such as intellectual property violations or discriminatory market barriers.
Section 232 of the Trade Expansion Act of 1962 authorizes tariffs on imports that threaten U.S. national security, enabling the government to restrict goods like steel or aluminum if they are deemed critical to defense or infrastructure.
Section 122 of the Trade Act of 1974 permits the president to impose temporary tariffs or quotas—typically for up to 150 days—when the U.S. faces large and serious balance-of-payments deficits, making it a shorter-term tool compared with 301 or 232.
The Treasury Secretary described the case before the Court as turning partly on the scope of presidential emergency powers.
He argued that the fentanyl crisis demonstrates a legitimate basis for invoking such authority, pointing to China’s recent cooperation following U.S. tariff threats. "If the fentanyl crisis wasn’t an emergency… then what was?" Bessent said.
He added that when China announced new licensing requirements tied to rare-earth elements, "President Trump was able to threaten them with a 100% tariff. They immediately came to the negotiating table."
Economic Stakes: Tariffs, Inflation, And Refund Risks
Bessent also addressed potential financial implications if the Court rules to unwind the tariffs.
He cited Costco's reported plans to seek refunds, questioning what refunds could apply if foreign suppliers had already reduced pre-tariff prices. Those price cuts, he said, complicate any effort to calculate reimbursements.
The secretary argued their purpose is not revenue generation but trade rebalancing and domestic industrial expansion.
He described China as "a very different economic animal" willing to cut export prices, and said Chinese producers have "consistently cut prices" in response to U.S. actions.
Pressed on whether tariffs contribute to inflation, Bessent rejected that view, saying any effects amount to a one-time price adjustment rather than persistent inflation.
He dismissed concerns raised by analysts, including Federal Reserve Chair Jerome Powell, who has stated tariffs raise prices relative to the Fed’s 2% inflation target. Bessent argued the overall share of the economy affected by tariffs was small.
Even if the Court ruled against the administration, Bessent suggested the broader economic objectives would remain intact.
"The ultimate goal is to rebalance trade and to bring back domestic production," he said. Should current authorities be restricted, he emphasized, the administration still holds multiple legal pathways to continue its tariff strategy.
Bessent cautioned that overturning the tariffs would ultimately harm Americans, saying: "Everyone says it will be a loss for the administration. I think it'll be a loss for the American people."
What Happens Next
The Supreme Court’s forthcoming decision on tariff authority will determine whether the administration can maintain its current system or must rapidly reconstruct it using alternative trade statutes.
A ruling against the White House could spark refund claims, disrupt negotiations, and force broad legal and economic adjustments, while a favorable outcome would leave its strategy largely intact.
Update 12/4/25, 3:45 p.m. ET: Article updated to clarify Secreaty Bessent's remarks.
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