U.S. Treasury Secretary Scott Bessent expressed optimism on Monday regarding the U.S. Supreme Court’s potential support for President Donald Trump’s utilization of a 1977 emergency powers law to enforce extensive tariffs on most trade partners. Bessent mentioned having a contingency plan in place if the Supreme Court does not rule in favor.
In preparation for the government’s appeal to the Supreme Court, Bessent disclosed that he is drafting a legal brief for the U.S. solicitor general. The brief aims to emphasize the critical need to address long-standing trade imbalances and prevent the influx of lethal fentanyl into the United States.
Following a divided ruling by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., most of Trump’s tariffs were deemed illegal. The court allowed the tariffs to remain effective until October 14 to provide the Trump administration an opportunity to file an appeal with the Supreme Court.
The court’s decision primarily focused on the legality of the tariffs labeled as “reciprocal” by Trump in April as part of his trade dispute, along with separate tariffs imposed in February on China, Canada, and Mexico to combat fentanyl imports. Notably, the ruling does not impact tariffs imposed under different legal authority, such as the steel and aluminum tariffs.
Trump justified these tariffs, as well as subsequent levies, under the 1977 International Emergency Economic Powers Act (IEEPA), which grants the president authority to address exceptional threats during national emergencies.
Regarding ongoing Canada-U.S. trade negotiations, an initial August 1 deadline passed without resolution. Prime Minister Mark Carney announced the removal of most counter-tariffs on U.S. goods in an attempt to revive negotiations, without specifying the remaining sticking points.
Bessent expressed confidence in the Supreme Court’s support for Trump’s actions, highlighting the significance of addressing the fentanyl crisis. He emphasized the urgency of addressing expanding trade deficits, portraying them as reaching a critical point that could lead to severe consequences, thus justifying the emergency measures.
Additionally, Bessent downplayed the notion that Trump’s tariffs were uniting countries like Russia, China, and India, dismissing a recent gathering in Shanghai as “performative.” He noted progress in persuading Europe to align with U.S. actions against India over Russian oil purchases, without detailing potential pressure on China.
Bessent also highlighted the challenges China may encounter in finding alternative markets for its goods beyond the U.S., Europe, and other English-speaking nations due to income disparities.
The treasury secretary’s remarks reflect the ongoing complexities and diplomatic strategies surrounding the implementation of tariffs and trade policies at the international level.