Treasury Secretary Scott Bessent defended President Donald Trump’s global tariffs just days before the Supreme Court took up a case challenging the White House’s use of emergency powers.
Lower courts have already ruled that Trump cannot use the International Emergency Economic Powers Act (IEEPA) to impose his so-called tariffs and reciprocal duties related to the fentanyl trade.
But in an interview on Fox News SundayBessent expressed optimism that the Supreme Court will rule in favor of the administration and pointed to strict restrictions on Chinese rare earth exports that threatened a wide range of critical industries and technologies.
“The president was able to respond using his IEEPA powers,” Bessent said. “If that’s not using backup power in an emergency, I don’t know what is.”
After Beijing announced limits on rare earths last month, Trump threatened to hit China with an additional 100% tariff that would have raised the overall rate above 150%.
Negotiations followed, culminating in a meeting between Trump and Chinese President Xi Jinping in South Korea on Thursday. Among the terms of the ceasefire, the United States agreed to set aside 100% tariffs, while China eased its exports of rare earths.
Besides the rare earths dispute, Bessent also said Chinese tariffs helped resolve the fentanyl crisis.
“I think those two things alone showed us that the president used it responsibly,” he added, while asserting that the trade deficit is another emergency that merits the use of tariffs under IEEPA.
But critics have also pointed to Trump’s recent announcement that he would add a 10 per cent tax to Canada, following an anti-tariff television ad the Ontario government aired, as evidence that he is trying to use emergency powers capriciously.
The Supreme Court will hear arguments on the tariff case this Wednesday. Although a decision may not be issued for months, the questions asked by the justices could provide clues about how they might rule.
The stakes are high, given that tariffs are a cornerstone of Trump’s economic agenda and foreign policy. They also generate significant revenue, and a ruling against Trump would mean the administration would have to return most of the money collected so far, although tariffs invoked under other laws would be unaffected.
Emily Kilcrease, who was deputy U.S. trade representative and previously worked on trade issues at the National Security Council, told The Associated Press that Trump’s use of tariffs is unprecedented, but acknowledged there was a “decent chance” that the Supreme Court could side with him because IEEPA gives the president “broad and flexible emergency powers.”
At the same time, business and legal experts recently interviewed by JPMorgan estimate a 70 to 80 percent chance that the Supreme Court will rule against the administration.
Even if the high court opposes Trump’s tariffs, it will not end his trade war because many other legal avenues are available to levy tariffs.
In fact, the administration has implemented other so-called sectoral tariffs in recent weeks, notably on wood and furniture.
But alternative tariff routes do not offer the same speed, scale or flexibility as IEEPA and would not fully recover lost revenue, JPMorgan said in a note.
“The potential loss of IEEPA tariffs does not end the tariff story, but fragments it,” he adds. “With more than 80% of announced rates dependent on IEEPA, the administration would be forced to turn to more restrictive and more contested measures. »
