Trump's 'Section 122' Gambit After Supreme Court Tariff Defeat

It took just hours to go from 10% to 15%. When the US Supreme Court delivered a stinging defeat to Donald Trump's tariff strategy, the president's response was swift and unprecedented: invoke a law no president had ever dared to use.

The Court's Crushing Blow

The Supreme Court's ruling last week invalidated multiple tariffs imposed by the Trump administration, wiping out levies targeting Asian export powerhouses including China, South Korea, Japan, and Taiwan. For Trump, who had built much of his economic agenda around these trade weapons, it was a devastating legal defeat.

But rather than retreat, Trump doubled down. Within hours of the ruling, he announced a 10% tariff on imports from all countries starting Tuesday, then escalated to 15% in a move that reportedly surprised even his own officials.

The Untested 'Section 122' Weapon

Trump's new tariff strategy relies on Section 122, a dormant piece of legislation that no president has ever invoked. While it allows tariffs up to 15%, there's a catch: after 150 days, congressional approval is required to extend them.

China's Commerce Ministry fired back on Monday, calling the unilateral tariffs a violation of "international trade rules and U.S. domestic law." The ministry's statement carried a pointed message: "Cooperation between China and the United States is beneficial to both sides, but fighting is harmful."

Gao Lingyun, a research fellow at the Chinese Academy of Social Sciences, told state-run Global Times that the US tariff decisions are "highly arbitrary" and being wielded as a "political weapon."

Allies Scramble to Respond

South Korea said it would maintain consultations with the US to preserve a "balance of interests," but Industry Minister Kim Jung-kwan acknowledged widespread concern across sectors including automobiles, batteries, and semiconductors. "The public and private sector need to work together to secure Korean companies' export competitiveness and diversify their markets," he said.

India postponed plans to send a trade delegation to Washington this week to finalize an interim trade deal, citing tariff uncertainty. The agreement would have reduced US tariffs on Indian goods to 18% while India committed to purchasing $500 billion worth of US products over five years.

European Warnings

European Central Bank President Christine Lagarde warned of business disruption, telling CBS' "Face the Nation" that companies want predictability, not legal battles. Any new tariff plans must be clearly defined to avoid constitutional challenges, she emphasized.

"To sort of shake it up again is going to bring about disruptions," Lagarde said, capturing the global business community's growing anxiety.

March Summit Looms Large

The stakes are rising ahead of Trump's planned visit to China in late March and early April, where he'll meet Xi Jinping. Trade and tariffs are expected to dominate the agenda, with both leaders under pressure to find a path forward.

China's Commerce Ministry signaled it won't back down: "China will continue to pay close attention to this and firmly safeguard its interests."

Legal Challenges Ahead

Section 122's unprecedented use virtually guarantees new legal challenges. The law's 150-day limitation and congressional approval requirement create a ticking clock that could force Trump into another high-stakes political battle.

Meanwhile, trading partners are already signaling they won't simply absorb the economic hit. The question isn't whether there will be retaliation, but what form it will take.