The White House is exuding confidence heading into Wednesday’s Supreme Court
hearing that the justices will uphold President Donald Trump’s sweeping tariff
powers.
But just in case, aides have a plan B.
Aides have spent weeks strategizing how to reconstitute the president’s global
tariff regime if the court rules that he exceeded his authority. They’re ready
to fall back on a patchwork of other trade statutes to keep pressure on U.S.
trading partners and preserve billions in tariff revenue, according to six
current and former White House officials and others familiar with the
administration’s thinking, some of whom were granted anonymity to share details
of private conversations.
“They’re aware there are a number of different statutes they can use to recoup
the tariff authority,” said Everett Eissenstat, former deputy director of the
White House’s National Economic Council during Trump’s first term. “There’s a
lot of tools there that they could go to to make up that tariff revenue.”
The contingency planning underscores how much is at stake for Trump, who has
used the International Emergency Economic Powers Act, a 1977 law designed for
national emergencies, to impose tariffs on nearly every U.S. trading partner —
the foundation of his second-term economic agenda. The justices will weigh
whether the law gives the president broad power to impose economic restrictions
— or whether Trump has stretched it beyond what Congress intended.
If the court curtails that power, it could upend not only the White House’s
“America First” trade strategy but also the global negotiations Trump has
leveraged it to shape.
“This is all about foreign policy. This isn’t 1789 where you can clearly
delineate between trade policy, economic policy, national security policy and
defense policy. These things are all completely interconnected,” said Alex Gray,
who served as National Security Council chief of staff and deputy assistant to
the president during the first Trump administration. “To diminish the tools he
has to do that is really dangerous.”
Behind the scenes, trade and legal advisers have modeled what a partial loss
might look like — where the court upholds the use of the 1977 law in some
circumstances but not others — and what other legal means might be available to
achieve similar ends.
However, those alternatives are slower, narrower and, in some cases, similarly
vulnerable to legal challenge, leaving even White House allies to acknowledge
the administration’s tariff strategy is on shakier ground than it is willing to
publicly concede. Even a partial loss at the Supreme Court would make it much
harder for the president to use tariffs as an all-purpose tool for extracting
concessions on a number of issues, from muscling foreign companies to make
investments in the U.S. to pressuring countries into reaching peace agreements.
“There’s no other legal authority that will work as quickly or give the
president the flexibility he wanted,” said one supporter of Trump’s tariff
policies, who was part of a group that filed an amicus brief in support of his
tariffs. “They seem very confident that they’re going to win. I don’t see why
they’re confident at all. Two different courts that have ruled extremely harshly
on this.”
Still, White House aides are telegraphing confidence, convinced the justices
won’t strip Trump of his favorite negotiating tool, and certain that even if
they do, he has plenty of backup plans.
“Frankly, there’s a little bit of bravado, like, they’re not going to knock
these down,” one person close to the White House said.
A White House official, granted anonymity to discuss internal deliberations,
said the administration sees it as “a pretty clear case.”
“We’re using a law that Congress passed, in which they gave the executive branch
the authority to use tariffs to address national emergencies,” the official
said.
Aides concede that other tariff authorities are not a “one-for-one replacement”
for the emergency law, though they confirmed they are pursuing them.
In fact, the White House has already laid some of the policy groundwork under
those authorities, such as the 1970s-vintage Section 301, which the U.S. used
against China in Trump’s first term, or the Cold War-era Section 232, which
allows tariffs on national-security grounds.
The administration has launched more than a dozen 232 investigations into
whether the import of goods like lumber, semiconductors, pharmaceuticals and
critical minerals from other countries impairs national security. Since January,
Trump has used that authority to impose new tariffs on copper, aluminum, steel
and autos.
It has also opened a 301 investigation into Brazil’s trade practices, including
digital services, ethanol tariffs and intellectual property protection. It’s a
model officials say could be replicated against other countries if the court
curtails IEEPA — and could be used to pressure countries into reaffirming the
trade deals that they’ve already negotiated with the United States, or to accept
the rates that Trump has unilaterally assigned them.
But those tools come with challenges: Section 301 investigations can take months
to complete, slowing Trump’s ability to impose tariffs unilaterally or tie them
to unrelated goals like ending the war between Russia and Ukraine or stem the
flow of fentanyl across the U.S. border.
Section 232 offers broad discretion to impose tariffs on national-security
grounds, but because the levies are sector-based, they are typically applied
across a product category, limiting Trump’s ability to pressure individual
countries.
And imposing new duties on global industries like semiconductors or
pharmaceuticals, as Trump has threatened, could upend recent agreements the
administration has reached with trading partners, especially China, which
negotiated a trade truce last week.
“This detente may have weakened the president’s resolve to go forward with the
232s. We’re worse off than we were,” a second person close to the administration
said.
The U.S. has already promised to delay fees on Chinese vessels arriving at U.S.
ports following the conclusion of a Section 301 investigation on China’s
shipbuilding practices as a result of the Thursday meeting between Trump and
Chinese leader Xi Jinping. The U.S. also agreed to delay an investigation into
China’s adherence to its trade deal from Trump’s first term.
Section 122, meanwhile, allows only short-term tariffs of up to 15 percent and
for no more than 150 days unless Congress acts to extend them — a narrow clause
meant to address trade deficit emergencies. The authority could potentially
serve as a bridge between an adverse court ruling and new duties Trump wants to
put in place using other authorities.
Then there’s Section 338 — a rarely used provision that’s been on the books for
nearly a century. In theory, it could let Trump swiftly impose tariffs of up to
50 percent on any country, if he can explain how they are engaging in
“unreasonable” or “discriminatory” actions that hurt U.S. commerce. Section 338
does not require a formal investigation before a president can impose tariffs,
but would likely face similar legal challenges.
Major trading partners are betting that Trump will find a way to reimpose
tariffs, somehow. Two European diplomats, granted anonymity to discuss trade
strategy, said the countries believe that the Supreme Court won’t strike down
the global tariffs and, if it does, it won’t do much to shift the dynamic.
“Our working assumption is that the court rulings won’t change anything,” a
European official said, adding that they are still hoping the law is overturned.
Some are convinced the only way to address the tariffs permanently is for the
president to appeal to Congress, arguing that only lawmakers can decide how much
unilateral power any White House should permanently wield over global commerce.
That would be an uphill battle. At least four Republicans are openly opposed to
the global tariffs — bucking Trump in a series of symbolic votes last week. And
it’s unclear whether there’s appetite for a vote on Trump’s tariffs in the
House, which has been shielded from weighing in on the tariffs until the end of
January, after Republican leadership blocked votes on Trump’s national
emergencies.
“At the end of the day, all this comes back to Congress,” Eissenstat said.
“Maybe Congress will step up its role post hearing, post ruling. We’ll see.”
Tag - Shipbuilding
President Donald Trump on Monday insisted the U.S. is going “full steam ahead”
on a major nuclear-powered submarine pact, ending months of uncertainty over
whether his administration would keep the alliance with Australia and the U.K.
The Pentagon announced this summer that it was reviewing the deal, known as
AUKUS, fueling angst in Canberra and London that the Trump administration might
walk away from a rare agreement to expand production of nuclear submarines and
partner on tech to ward off China. But Trump gave his support Monday at a White
House meeting with Australian Prime Minister Anthony Albanese, where leaders
sought to reset the tone of the relationship after weeks of speculation about
the pact’s future.
“We’re just going now full steam ahead,” Trump said when asked about the deal.
“They’re building magnificent holding pads for the submarines. It’s going to be
expensive. You wouldn’t believe the level of complexity and how expensive it
is.”
Canberra has committed billions to develop submarine and naval shipbuilding
facilities in western Australia, designed to host and maintain U.S. and U.K.
nuclear-powered submarines while revving up construction of new ones. The new
infrastructure would turn Australia into a hub for allies and their submarines
in the region, all aimed as a bulwark against China.
Navy Secretary John Phelan, at the meeting, said the plan is to “take the
original AUKUS framework and improve it for all three parties, and make it
better, clarify some of what was in the prior agreement.”
Trump, who is expected to meet with Chinese President Xi Jinping in the coming
weeks, said he views AUKUS as a deterrent against Beijing but not a step toward
a confrontation. And he dismissed the idea of a conflict over Taiwan. “We’ll be
just fine with China,” he said. “First of all, the United States is the
strongest military power in the world by far.”
Trump and Albanese also signed a deal for critical minerals and rare-earth
elements, formalizing joint investments between the two countries to strengthen
non-Chinese supply chains for materials crucial for defense and high-tech
manufacturing. Officials negotiated it over the last few months, Trump said.
Albanese described it as an AUD $8.5 billion pipeline, with joint contributions
over the next six months.
“Australia has had a view for some time — it’s similar to putting America
first,” he said. “Our plan is called ‘A Future Made in Australia,’ which is
about not just digging things up and exporting them, but making sure we have
supply chains where our friends can benefit.”
The mineral push comes amid increasing trade tensions between the U.S. and
Beijing, which has tightened export controls on rare-earth elements and
permanent magnets. Both are vital for defense and high-tech products.
Trump reiterated his threat to levy hefty tariffs on China if it does not relent
on the new trade restrictions. “They threatened us with rare earths, and I
threatened them with tariffs,” he said. “We could stop the airplane parts, too.
We build their airplanes.”
Defense Secretary Pete Hesgeth on Friday fired Navy chief of staff Jon Harrison,
an unusually powerful top aide who had orchestrated a reshuffle of the service’s
bureaucracy.
The sudden ouster, according to two defense officials and a former defense
official, follows the confirmation this week of Navy Undersecretary Hung Cao.
The Pentagon, in a statement, confirmed Harrison’s departure. “He will no longer
serve as Chief of Staff to the Secretary of the Navy,” it said. “We are grateful
for his service to the Department.”
Harrison declined to comment.
The Navy secretary’s chief of staff has traditionally been a behind-the-scenes
job, the senior aide who keeps everything moving smoothly. But Harrison, a Trump
administration appointee who joined the service in January, had a rare level of
power.
Harrison and Navy Secretary John Phelan had introduced sweeping changes to the
Navy’s policy and budgeting offices and sought to limit the influence of the
undersecretary job.
POLITICO previously reported that Phelan and Harrison had reassigned several
aides who were supposed to help Cao navigate the role once he’s confirmed. They
had also planned to interview all future military assistants for Cao to ensure
decisions came from the secretary’s office.
Cao is a high-profile Navy veteran and former Republican Senate candidate in
Virginia who President Donald Trump nominated for the post.
The ouster follows months of musical chairs inside the Pentagon. Hegseth fired
several top aides earlier this year and removed the chair of the Joint Chiefs,
as well as the uniformed leaders of the Navy, Air Force and Coast Guard.
Trump has vowed to revive the shipbuilding industry. But the service’s biggest
programs are years behind schedule and both America’s allies and its largest
adversaries are surpassing the productivity of U.S. shipyards.
When Vladimir Putin sent at least 19 drones into Poland last week, the Russian
president was delivering a message: He’s not planning to end his war against the
West anytime soon.
The Russian incursion into NATO airspace follows weeks of aerial attacks in
Ukraine that killed dozens of civilians, damaged buildings housing the EU and
British delegations and struck for the first time a government building in
central Kyiv.
Far from being ready to strike a peace deal with Ukraine under pressure from
U.S. President Donald Trump, Putin has pegged his political survival to a
simmering conflict with the United States and its allies.
“Putin is the president of war,” said Nikolai Petrov, a senior analyst at the
London-based New Eurasian Strategies Center. “He has no interest in ending it.”
Having fashioned himself as a wartime leader, going back to being a peacetime
president would be tantamount to a demotion. “No matter what the conditions are,
he cannot give up that role,” Petrov said.
As Putin’s full-scale assault on Ukraine drags toward its fourth year, the
Russian president arguably has the most cause for optimism since the early days
of the war when the Kremlin hoped to capture the country in a matter of days.
With Ukrainian forces hamstrung by a lack of weapons and manpower, Russia has
been grinding deeper into the country.
But Moscow’s progress has been slow — and costly. The Kremlin’s armed forces
have suffered an estimated one million casualties and the conflict has taken its
toll on the Russian economy, which threatens to tip into recession.
And yet, politically, ending the conflict comes with risks.
The Kremlin’s tight control over the media and the internet would likely allow
it to sell a peace deal to most Russians as a victory. But that’s not who the
Russian president will be worrying about.
With Russia’s liberal opposition decimated, a small but vocal group of
nationalists now presents the biggest threat to his rule, said Petrov. And he
has promised them a grandiose victory, not only over Ukraine but over what the
Kremlin calls “the collective West.”
“There’s a desire among the hawkish part of the military-political establishment
to destroy NATO,” Alexander Baunov, a former Russian diplomat now a senior
fellow at the Carnegie Russia Eurasia Center, told DW’s Russian service. “To
show NATO is worthless.”
Since Putin met with Trump in Alaska last month in what the U.S. president had
touted as a summit dedicated to striking a ceasefire, Moscow has ramped up its
campaign of hybrid warfare against Europe, according to military analysts.
Before Wednesday’s incursion, Russian drones had repeatedly ventured into Polish
airspace from neighboring Belarus, circling cities before turning back. In
August, a Russian drone crashed some 100 kilometers southwest of Warsaw.
According to WELT, a sister publication of POLITICO in the Axel Springer Group,
five of the drones that crossed into Poland were on a direct flight path toward
a NATO base before being intercepted by Dutch Lockheed Martin F-35 fighter jets.
In an opinion piece published two days before the drones crossed into Poland,
Dmitry Medvedev, deputy chairman of Russia’s Security Council, accused Helsinki
of planning an attack, threatening that any assault “could lead to the collapse
of Finnish statehood — once and for all.”
Analysts noted the article’s rhetoric resembled the Kremlin’s talking points
ahead of Russia’s full-scale invasion of Ukraine in February 2022.
Moscow has also begun to shift vital industries, including shipbuilding, to the
east of the country, away from its border with NATO, Petrov pointed out. On
Friday, Russia began carrying out large-scale military exercises with Belarus,
including just across the Polish border. The exercises are expected to conclude
on Tuesday.
“Whatever Putin achieves in Ukraine, the confrontation with the West will not
end there; it will continue in various forms,” said Petrov. “Including
militarily.”
With actions like the incursion into Poland, Putin is issuing a warning to Trump
and European leaders discussing providing security guarantees for Kyiv after a
potential peace deal, said Kirill Rogov, founder of the think tank Re:Russia.
“Putin showed that he can attack NATO countries today and they have no defense
systems in place,” he said.
Trump’s mixed signaling on his commitment to NATO and his unwillingness to stick
to his own deadlines when it comes to imposing sanctions on Moscow give Putin
the confidence that he can get away with it.
For the Russian president, “it’s now or never,” Baunov added.
Incursions like the one in Poland are intended to chip away at the Western
military alliance’s commitment to collective defense, with small offensives that
test NATO’s willingness to respond.
The hope, said Baunov, is to reveal the military alliance as a toothless tiger.
So far, the reaction from Washington has fed into those fears.
On Thursday, Trump echoed Moscow’s talking points, telling reporters that “it
could have been a mistake.”
The Kremlin has dismissed accusations that the drones were a deliberate
provocation. The Russian defense ministry said there “had been no plans to
target facilities” in Poland.
Belarus, which served as a launchpad for some of the drones according to Polish
officials, said the incursion could have been the result of a mishap due to
“electronic jamming.”
“This is typical Putin-style trolling and probing,” said Rogov. “He likes things
to be ambivalent so that they can be interpreted either as deliberate or
accidental.”
Russia’s saber-rattling in the Arctic is forcing Canada to deepen military
cooperation with its Nordic NATO allies — a marked policy shift away from the
United States.
Prime Minister Mark Carney has dispatched two top Cabinet ministers to Sweden
and Finland this week in pursuit of new defense deals — including a look at
Sweden’s Saab Gripen fighter jet. Canada had previously decided on the Lockheed
Martin F-35, a flagship export under President Donald Trump. But amid a trade
war, at a time when other allies are turning away from the U.S. war plane,
Canada is reconsidering its C$19-billion plan to buy a new fleet of F-35s.
“Clearly, there are trade tensions [with the U.S.], and we want to become closer
to our friends,” Industry Minister Mélanie Joly said Monday as Swedish Deputy
Prime Minister Ebba Busch formally welcomed her to Stockholm.
Canada’s Arctic defense strategy is shifting away from a bilateral relationship
with the United States toward a broader NATO framework. With Sweden and Finland
joining NATO after Russia’s February 2022 invasion of Ukraine — and in the wake
of Trump’s tariff attacks — Ottawa is widening its foreign policy focus to align
with NATO as the foundation of its Arctic security.
Busch said she welcomed a strategic partnership, “focusing on security and
defense, investment and competitiveness, digital innovation and energy raw
materials.”
Joly name-checked Canadian ties to Saab, as well as to Sweden tech giants
Ericsson and ABB (Asea Brown Boveri). “We have the crown jewels of the private
sector of Sweden already in our country, but we want to do more,” the minister
said.
On Tuesday, Canada added one more jewel when Roshel, a Canadian manufacturer of
armored vehicles, signed a “strategic partnership agreement” with Swedish steel
producer Swebor.
Roshel said in a statement that the partnership will “establish Canada’s first
facility dedicated to production of ballistic-grade steel” — a key ingredient in
military vehicles.
Earlier in the trip, Joly visited Saab, the Swedish manufacturer of the Gripen —
at one time a runner-up on Canada’s shortlist to replace its aging fleet of
CF-18s. Lockheed Martin won that contract, and will deliver 16 of the stealth
fighters so far.
Joly is joined on this week’s trip by Stephen Fuhr, Canada’s new secretary of
state for defense procurement, as Ottawa contemplates whether it will buy 72
more F-35s.
Later in the week, Joly is to cut the ribbon on a joint Finnish-Canadian
shipbuilding venture that will begin manufacturing a new fleet of icebreakers
for Canada’s Coast Guard.
Meanwhile in Europe, Foreign Affairs Minister Anita Anand was scheduled to meet
with Finland President Alexander Stubb on Tuesday. The tête-à-tête follows
Stubb’s appearance at the White House Monday alongside other European leaders,
supporting Ukrainian President Volodymyr Zelenskyy in the Trump-brokered
negotiation with Russia’s Vladimir Putin to end the war in Eastern Europe.
Anand said NATO, which was founded during the Cold War on the premise it was an
eastward-facing European bulwark against the Soviet Union, must confront Russia
beyond Europe’s borders in the Far North.
“NATO’s gaze also has to shift westward and north because of the changing
geopolitical landscape, especially following Feb. 24, 2022,” Anand said Monday.
“Our priority in terms of Canada’s Arctic foreign policy is to ensure that we
leave no stone unturned to protect and defend Canada’s sovereignty,” she added.
Anand said that will mean tens of billions of dollars of new spending on Arctic
infrastructure. The minister added that it was no longer appropriate for
civilian and military infrastructure projects to exist in bureaucratic “silos.”
“When we talk about critical minerals in the north, yes, that’s an economic
question, but it’s also a defense and security question, and it is embedded in
our foreign policy,” Anand said.
Anand met with foreign ministers from the Nordic 5 group of countries, including
her host, Elina Valtonen, and their counterparts from Sweden, Denmark, Norway
and Iceland.
They later issued a joint statement of unwavering solidarity with Ukraine.
“The Nordic countries and Canada are ready to play an active role in combining
the efforts of the Coalition of the Willing with those of the United States to
ensure the strength and credibility of these security guarantees,” Anand and her
Nordic counterparts said.
They emphasized that Ukraine’s borders must remain intact, and that Russia has
no “veto” over Ukraine’s possible pathway to EU or NATO membership. They also
called for the return of thousands of Ukrainian children who were taken to
Russia after the war started.
“For as long as Russia continues its war of aggression against Ukraine, we —
together with partners and allies — will continue to maintain and increase
pressure on Russia’s war economy,” the Nordic 5 said.
“Russia poses a long-term threat to European security.”