President Donald Trump just can’t waive the tariffs.
He suffered one great defeat when the Supreme Court ruled in February 2026 against the sweeping emergency tariffs he had announced last year. Then, on May 7, a federal court overturned the interim fees he had announced after the Supreme Court decision.
Yet Trump seems undeterred and continues to find a plan B – and then C and D.
“So we always do it a different way,” the president told reporters after the May 7 decision. “We make a decision, and we do it in a different way.”
This other way, currently, is using an authority called Section 301. This option is likely to invite more litigation, but may prove to be more powerful and durable than previous taxes. For this purpose, the administration has opened two probespaving the way for new tariffs later this year against China and other major trading partners.
Why does this matter? US trade policy can seem like a complicated mess of acronyms and laws. But, as one commercial economist who has followed the tariff wars, I believe that Trump’s strategy to make aggressive global tariffs the centerpiece of his economic foreign policy is quite clear — even as his trade policy generally remains deeply unpopular.
And if he succeeds, the average tax may increase to the April 2025 “Deliverance Day” tariff peaks, before some were reduced in subsequent – if not complete – deals with trading partners.
A tariff obsession
At first glance, Trump’s obsession with tariffs may seem surprising.
They have failed to stimulate U.S. manufacturing and employment, while consumers and importers have absorbed the burden of price increases. For Trump, however, what seems to matter is that the Supreme Court took away the power of the tariff when it ended his emergency tariffs. He now wants that power.
Indeed, that power was the appeal of Liberation Day Fareswhich allow Trump to set tariff rates at any level and for any length of time, with the flexibility to set different rates for different countries. With such means, he can threaten more punitive tariffs to enforce bilateral trade agreements.
Besides, he saw the revenue those fees brought in as a source of power and had rejected the Supreme Court’s order that they be reimbursed to US companies who paid them. Trump is equal angry with some company that have decided to collect fee refunds.
But Trump is particularly angry with his Supreme Court nominees Amy Coney Barrett and Neil Gorsuch, whose votes reversed the February decision. it continues to disappoint those. He stated that he is “ashamed” of all the judges who voted for the strike of fees, characterizing them as “fools” and “fools” who did not have the “courage to do what is right for our country”. Trump also said the court’s decision would inadvertently push him to “impose more robust tariffs … rather than less.”
In short, Trump is moving from his Liberation Day tariffs to what I call “retaliatory tariffs” – in an effort to show the high court that he can’t stop it.
Planning the next battle
Section 301 of the US Trade Act of 1971 is designed to remedy trade practices of foreign countries that are considered discriminatory, unfair, unreasonable, or burdensome to US trade. It does not set any limit on the amount of the fee; allows the president to discriminate among target countries; and generates tariff revenue without violating the taxation clause of the Constitution, a key element in the The Supreme Court’s February decision.
Another potential advantage: federal courts usually have having the discretion of the president in determining the purpose, scope and remedies chosen to implement section 301.
The main reason Trump didn’t use Section 301 last year for his Liberation Day tariffs — opting for a different law, International Emergency Economic Powers Act – was because he thought the latter would give that kind of unlimited tariff authority, but without any additional procedural requirements. Up to a point, this proved correct – until his defeat in the Supreme Court.
As for next steps, the Trump administration has proposed two Section 301 investigations. One is against the allegations.”industrial overcapacity” among several countries – shorthand for overproduction through government intervention – and the other against suspects failures to enforce prohibitions on trade using forced labour.
For Trump, the appeal is that these investigations are far-reaching. And he has already indicated that he wants to use any tariffs stemming from the probe as leverage: if a country that has signed a trade deal considers abandoning the agreement, for example, Trump warned that he may threaten Section 301 charges later.
“Any state that wants to ‘play games’ with the supreme court’s ridiculous decision, especially those that have been ‘ruining’ the US for years, even decades, will face a much higher and worse tariff than what they just agreed to. BUYER BEWARE!!!” Trump wrote on his social platform, Truth Social, in February.
In short, using Section 301 would be akin to declaring that every US trading partner harms the US in some way and will be targeted for punitive tariffs. This action would be unprecedented – and is likely to face legal challenges. These would first go to the Court of International Trade, which also struck down the provisional tariffs, and appeals would go to the US Court of Appeals for the Federal Circuit. The final level of appeal would be the Supreme Court.
Fair and balanced?
International trade law has created mechanisms for trading partners to crack down on forced labor or address industrial capacity through policy changes or negotiations. In such a scenario, tariffs would provide the means, not the ends, to address these more fundamental policy disagreements.
So far, however, Trump appears to have another goal: correcting the “unfair trade imbalances” he also cited for the Liberation Day tariffs. A government Article 301 requirement claims that excess foreign capacity is allowing countries to accumulate “persistent” trade surpluses. Another claims that trade in forced labor goods harms the US trade balance by increasing US imports of low-priced products and decreasing US exports by forcing them to compete with free competition.
If these petitions are successful, Trump could impose Section 301 tariffs individually, on a country-by-country basis, as part of his goal of balancing global trade. Trump wants too catch again the revenue that his fees generated.
The catch is that Section 301 requires cases to be based on operating practices, not trade balance results. What’s more, the 2025 tariffs didn’t even break even: US deficit in goods it has actually increased that year. So the use of Section 301 is just as unlikely to improve the US trade balance, which is determined by macroeconomic factors, not foreign overcapacity or imports of goods made with forced labor.
A matter of honor
Will there be any handrails in Trump’s plan to introduce the new tariffs in July 2026, as he has indicated? This will depend in part on whether the courts in these cases continue the traditional deference given during the pre-Trump era to the president.
Trump is counting on it, but it’s not a slam dunk. Many experts the question of whether overcapacity it is a commercial infringement. And on the issue of forced labor, the US National Trade Assessment Report added potential offenders except for China only in March 2026 – a timely notice pending the current Section 301 case. The case of forced labor may actually be intended to compel US trading partners abandon supply chains involving Chinese goods.
But as it happens, the European Union and other countries are more effective than the US in banning forced labor imports and therefore should not be targeted. Trade experts also point out that USA manufactures itself forced labor goods in private prisons and has often failed to stop forced labor imports. it’s just as guilty like many other countries not enforcing its ban on such trade, these legal scholars argue.
However, courts have traditionally given the president leeway in Article 301. This allows him The White House pursues trade liberalization respecting the norms of global trade rules that the US defended at the time.
Trump, in contrast, has made a practice of undermining those rules and can be expected to stretch Section 301 as far as possible. Indeed, his rhetoric seems to suggest that Section 301 cases were chosen primarily to establish a permanent tariff regime by providing all-purpose bargaining leverage, while not redressing harmful foreign trade practices.
For these reasons, Trump is likely to face off legal challenges – as well as a potential impact at his party in mid-term ballot box – as he tries to test the limits of American trade law.
Kent Jones is professor emeritus of economics, Babson College.
This article was reprinted from Conversation under a Creative Commons license. Read on original article.
