Authored by Andrew Moran via The Epoch Times (emphasis ours),
Treasury Secretary Scott Bessent said the White House has plenty of tools at its disposal to implement President Donald Trump’s global tariffs if the Supreme Court does not uphold his use of a 1977 emergency powers law.
The U.S. Court of Appeals for the Federal Circuit ruled 7–4 on Aug. 29 against the current administration’s decision to invoke the International Emergency Economic Powers Act (IEEPA) as justification for levies on foreign goods unveiled in April. The court’s decision does not take effect until Oct. 14, allowing the White House ample time to appeal the decision to the Supreme Court.
The IEEPA grants the president broad authority to regulate international economic transactions—regulating imports and exports, freezing foreign assets, or halting financial transactions—after declaring a national emergency.
In a Labor Day interview with Reuters, Bessent stated that while he is confident the high court will uphold the president’s reciprocal tariff agenda, the administration has various options available.
“I’m confident the Supreme Court ... will uphold the president’s authority to use IEEPA. And there are lots of other authorities that can be used—not as efficient, not as powerful,” Bessent said.
He referred to Section 338 of the Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act. It contains a trade provision that authorizes the president to impose new tariffs or additional duties of up to 50 percent on foreign products entering the United States for a period of five months if they are determined to threaten domestic commerce.
Bessent said he is planning a legal brief for the U.S. Solicitor General to highlight the urgency of stopping the flow of fentanyl into the country. Pointing to the approximately 70,000 fentanyl-linked deaths per year in the United States, he questioned what would be considered an emergency.
“If this is not a national emergency, what is?“ he said. ”When can you use IEEPA if not for fentanyl?”
The senior administration official also intends to argue that persistent trade imbalances will ultimately reach a critical threshold, triggering more immense consequences for the U.S. economy.
“We’ve had these trade deficits for years, but they keep getting bigger and bigger,” he said. “We are approaching a tipping point ... so preventing a calamity is an emergency.”
The last time the United States registered a trade surplus was in 1975.
In July, the U.S. goods trade deficit widened by $18.7 billion to $103.6 billion, the largest gap in four months. Imports rose by more than 7 percent to $281.5 billion while exports dipped 0.1 percent to $178 billion.
Long-term U.S. Treasury yields popped on Sept. 2, driven by concerns that the federal government will be forced to repay tariff income and forego potentially trillions of dollars in tariff revenues.
Yields on the 20- and 30-year government bonds surged about 5 basis points to around 4.92 percent and 4.98 percent, respectively.
“Global trading partners will no doubt find it premature to be celebrating just yet, but we'll be interested in seeing whether the Treasury market comes under any further pressure if the US has to hand back already received tariff revenues,” ING economists said in a Sept. 1 note.
In this fiscal year, the federal government has collected $183.1 billion in tariff revenues, including $31 billion in August.
Looking ahead, according to projections from the Committee for a Responsible Federal Budget, tariff revenues could rise to as much as $50 billion per month, or 1.5 percent of GDP, “before declining some as supply chains adjust.”
The Yale Budget Lab estimates the effective U.S. tariff rate is 18.6 percent, the highest since 1933.
Bessent also shrugged off the apparent cordial relations between China, India, and Russia at the recent Shanghai Cooperation Organization as “performative.”
“It’s more of the same,” Bessent said, adding that Beijing and New Delhi are “fueling the Russian war machine.”
“I think at a point we and the allies are going to step up,” he said.
Last week, the president’s additional 25 percent tariff on India went into effect, bringing the total import duty to 50 percent on many imports entering the United States. The administration doubled down on punitive levies over India’s enormous purchases of Russian crude oil.
Trump, writing in a Sept. 1 Truth Social post, stated that India has offered to reduce its tariffs to zero percent.
“India buys most of its oil and military products from Russia, very little from the U.S.,” Trump said. “They have now offered to cut their tariffs to nothing, but it’s getting late. They should have done so years ago. Just some simple facts for people to ponder!”
He noted that the United States does “very little business with India, but they do a tremendous amount of business with us.”
According to the U.S. Trade Representative’s Office, the U.S. goods trade deficit with India was $45.8 billion last year, up 5.9 percent from 2023.
India, the only nation slapped with secondary tariffs for Russian oil purchases, has been surpassed by China as the world’s largest buyer of discounted petroleum products from Moscow.
Bessent defended the administration’s decision not to impose secondary tariffs on Beijing. In an Aug. 19 interview with CNBC’s “Squawk Box,” Bessent stated that China was already the Russian energy sector’s client.
“China importing it is suboptimal,” Bessent said. “But if you go back and look pre-2022, pre-invasion, 13 percent of China’s oil was already coming from Russia. Now it’s 16 [percent]. So, China has a diversified input of their oil.”
India, on the other hand, dramatically accelerated its purchasing following the breakout of the war in Ukraine, Bessent noted.
In 2021, India imported $2.31 billion of Russian crude oil, according to United Nations COMTRADE data. By 2024, imports surged to almost $53 billion.
The tariff pause between the United States and China, meanwhile, was extended last month until Nov. 10.