US Treasury Secretary Bessent says Plan B ready if Supreme Court overturns Trump tariffs

US Treasury Secretary Scott Bessent has said that the Trump administration has formulated a backup plan in case the Supreme Court does not uphold the president’s use of a 1977 emergency powers law to impose sweeping tariffs on most trading partners. He, however, expressed confidence that the top court would deliver an order in the government’s favour.

Bessent told Reuters he was preparing a legal brief for the US solicitor general, who will oversee the government’s appeal to the Supreme Court, that will underscore the urgency of addressing decades of trade imbalances and stopping the flow of deadly fentanyl into the United States.

In a blow to US President Donald Trump, an appeals court has ruled that most of his tariffs are illegal. However, the president’s Cabinet, including Bessent, tried to delay the court ruling by submitting statements that warned of serious implications of the order on US foreign policy.

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Bessent said, “I’m confident the Supreme Court will uphold it - will uphold the president’s authority to use IEEPA. And there are lots of other authorities that can be used - not as efficient, not as powerful.”

One of those authorities, he added, could be Section 338 of the Smoot-Hawley Tariff Act of 1930, which allows the president to impose tariffs of up to 50 per cent for five months against imports from countries that are found to discriminate against US commerce.

The 7-4 decision by the US Court of Appeals for the Federal Circuit in Washington, DC, addressed the legality of what Trump calls “reciprocal” tariffs imposed as part of his trade war in April, as well as a separate set of tariffs imposed in February against China, Canada and Mexico aimed at halting imports of fentanyl.

‘Happens every year’

Bessent downplayed the notion that Trump’s trade war is bringing together India, China and Russia, saying that the recent camaraderie displayed between the three countries at the SCO Summit was “performative”.

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“It happens every year for the Shanghai Cooperation Organization,” he said. “It’s more of the same. And look, these are bad actors … India is fueling the Russian war machine, China is fueling the Russian war machine … I think at a point we and the allies are going to step up.”

He said the US was making headway in convincing Europe to join Washington’s crackdown on India over its purchases of Russian oil through a 25 per cent additional tariff, but did not comment on whether the US would use similar pressure on China.

With inputs from Reuters