Bessent points to China’s rare earths restrictions to justify Trump tariffs

Lower courts have already ruled that Trump cannot use the International Emergency Economic Powers Act (IEEPA) to impose so-called reciprocal tariffs and duties associated with the fentanyl trade.

But in Interview on Fox News SundayBesant said he was optimistic the Supreme Court would decide in favor of the administration and pointed to China’s strict restrictions on the export of rare earths that threaten a wide range of critical industries and technologies.

“The president was able to respond by using his IEEPA powers,” Besant said. “If that’s not a use of emergency force in a time of emergency, I don’t know what is.”

After Beijing announced limits on rare earths last month, Trump threatened to impose an additional 100% tariff on China that would have raised the overall rate to more than 150%.

Negotiations ensued, culminating in a meeting between Trump and Chinese President Xi Jinping in South Korea on Thursday. Among the terms of the ceasefire, the United States agreed to eliminate 100% tariffs, while China reduced its exports of rare earths.

In addition to the dispute over rare earths, Besant also said Chinese tariffs have helped address the fentanyl crisis.

“I think those two things alone showed us that the president used it responsibly,” he added, while saying the trade deficit represented another emergency that merited the use of tariffs under IEEPA.

But critics have also highlighted Trump’s recent announcement that he would add a 10% tax on Canada due to an anti-tariff television ad run by the Ontario government as evidence that he is trying to use emergency powers capriciously.

The Supreme Court is scheduled to hear arguments on the tariff issue on Wednesday. While the decision may not come for months, a series of questioning from the justices could provide clues about how they might rule.

There is a lot at stake, given that tariffs are a cornerstone of Trump’s economic and foreign policy agenda. They generate significant revenue, too, and a ruling against Trump would mean the administration would have to return the bulk of the money raised so far, though tariffs invoked under other laws would not be affected.

Emily Kilcrease, who was deputy assistant US Trade Representative and previously worked on trade issues at the National Security Council, told the Associated Press that Trump’s use of tariffs is unprecedented, but she acknowledged there was a “good chance” the Supreme Court would side with him because the IEEPA gives the president “broad and flexible emergency powers.”

On the other hand, business and legal experts recently surveyed by JP Morgan estimated that the odds of a Supreme Court ruling against the administration ranged between 70% and 80%.

Even if the Supreme Court opposes Trump’s tariffs, it will not put an end to his trade war as there are many other legal avenues to impose tariffs.

In fact, the administration has rolled out other so-called sectoral tariffs in recent weeks, including on wood and furniture.

Alternative tariff methods do not provide the same speed, scale or flexibility as IEEPA and will not fully recover lost revenues, JPMorgan said in a note.

“The potential loss of IEEPA tariffs does not end the tariff story, but it dismantles it,” she added. “With more than 80% of announced tariffs based on IEEPA, the administration will be forced to resort to narrower and more controversial measures.”