White House Already Has Backup Plans Ready If Court Blocks Trump Tariffs

Washington's contingency playbook is already open. While legal battles over Trump-era tariffs rage in the courts, the White House isn't waiting for a verdict. Officials have quietly drafted a suite of backup strategies, ready to deploy the moment a judge issues a block.

The Art of the Workaround

Think of it as regulatory judo—using the momentum of a legal challenge to pivot to alternative measures. The plans reportedly explore everything from executive actions targeting specific supply chains to leveraging existing trade statutes in novel ways. The goal remains unchanged: protecting domestic industries. The methods, however, are fluid and designed to bypass judicial roadblocks.

Markets Hate Uncertainty More Than Bad News

For traders, this isn't about tariffs versus no tariffs. It's about predictability. A clear, if painful, policy is often preferable to the fog of legal limbo and sudden administrative pivots. The mere existence of these contingency plans signals that volatility is the only guaranteed outcome—a classic scenario where hedging strategies become more valuable than directional bets. It's the kind of bureaucratic maneuvering that makes crypto's algorithmic execution look refreshingly straightforward, if not downright honest.

The administration's move reveals a fundamental truth in modern geopolitics: policy is now a multi-front war, fought in courtrooms, through press leaks, and in financial markets simultaneously. The first rule? Always have an exit—and an alternate entry—strategy.

The case boils down to two big questions

Can TRUMP use the International Emergency Economic Powers Act to slap on these tariffs? And if not, does the government have to give money back to importers who already paid up?

But the court might not pick either extreme. They could say Trump gets to use emergency powers in a limited way and only some importers get refunds. There’s a bunch of ways this could shake out, and Wall Street’s been watching it like a hawk.

Treasury Secretary Scott Bessent said Thursday he’s expecting what he called a “mishmash” ruling when it finally drops.

“What is not in doubt is our ability to continue collecting tariffs at roughly the same level, in terms of overall revenues,” Bessent told people in Minneapolis. “What is in doubt, and it’s a real shame for the American people, was the president loses flexibility to use tariffs both for national security, for negotiating leverage.”

Trump used the emergency law partly to crack down on fentanyl coming into the country.

Jose Torres, senior economist at Interactive Brokers, said a loss in court WOULD shake things up in several ways.

“If the court blocks the tariffs, the administration is going to find workarounds,” Torres said. “President Trump is very ambitious in getting this agenda through despite potential controversies that could surround such a decision.”

Blocking the tariffs would mess up efforts to bring factories back to America and make the budget deficit worse, pushing rates up, Torres said. The flip side? Companies would see their costs drop and trade would Flow easier.

The betting markets aren’t optimistic for Trump.

Kalshi shows only a 31% chance the court sides with the administration. Torres said his firm’s clients are thinking along the same lines.

Bessent has talked about having at least three other routes through the 1962 Trade Act that would keep most tariffs alive. But he’s worried about having to pay importers back—that could really squeeze the budget and make cutting the deficit harder.

Tariffs brought in $195 billion in fiscal 2025 and $62 billion more in 2026 so far, Treasury numbers show.

Morgan Stanley analysts think there’s “significant room for nuance” in whatever decision comes down. The court could trim which tariffs stay without killing them all, or put limits on how they get used down the road.

Analysts Ariana Salvatore and Bradley Tian said the administration might ease up on tariffs anyway, given how much politicians are talking about keeping things affordable right now.

The tariffs haven’t played out like experts thought they would. Inflation hasn’t jumped as much as predicted, and the trade deficit has plunged. Some people figured the tariffs would wreck America’s reputation in world trade. Instead, October’s trade gap hit its lowest mark since the 2009 financial crisis.

Hassett is one of the names floating around for Fed chair when Jerome Powell’s term wraps up in May. He said Friday he’s happy where he is now but will go wherever Trump wants him.

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