President Trump’s trade agenda faced a major setback when the Supreme Court struck down his signature tariff policy. Yet within hours, the administration unveiled a backup plan: invoking Section 122 of the Trade Act of 1974. This legal maneuver could allow Trump to reimpose tariffs of up to 10% on imports, reshaping global trade dynamics once again.
What Happened
- The Supreme Court delivered a shock ruling against Trump’s existing tariff framework.
- Why It MattersTrump officials immediately pointed to Section 122 as their “Plan B.”
- Section 122 grants the president authority to impose temporary tariffs or quotas, capped at 15% and lasting up to 150 days, without congressional approval.
Why It Matters
- Temporary Relief for Trump’s Agenda: The ruling doesn’t end tariffs; it only pauses them. Section 122 provides a legal workaround.
- Impact on Consumers: Import taxes on foreign consumer goods could remain in place, raising prices for everyday items.
- Global Trade Tensions: Trading partners may view this as another escalation, potentially sparking retaliatory measures.
Section 122 in Detail
- Origin: Part of the Trade Act of 1974, designed to give presidents flexibility in emergencies.
- Limits: Tariffs under Section 122 cannot exceed 15% and must expire after 150 days unless extended through other legal channels.
- Trump’s Strategy: By setting tariffs at 10%, the administration stays within the legal threshold while maintaining pressure on foreign exporters.
Conclusion
The Supreme Court ruling may have blocked Trump’s initial tariff plan, but Section 122 ensures the fight over trade policy is far from over. For businesses, consumers, and global markets, the next 150 days could bring renewed uncertainty as tariffs return under a different legal banner.
Reference
https://www.axios.com/2026/02/20/trump-tariff-plan-section-122-trade-act