The Trump administration is racing to rebuild the tariff wall that was struck down by the Supreme Court

WASHINGTON (AP) — The U.S. Treasury last year swelled its revenues from President Donald Trump’s double-digit taxes on imports from nearly every country on Earth.

But the money dried up after the Supreme Court struck down Trump’s larger, bolder tariffs in February.

He watches: Why did the Supreme Court rule against Trump’s tariffs?

The question now is: Can the president’s trade team deliver on its promise to make up for lost revenue?

The deadline is fast approaching.

After the Supreme Court setback, the president first invoked Section 122 of the 1974 Trade Act to impose 10% tariffs globally. But Section 122 only allows tariffs for 150 days. Trump’s term ends on July 24. Congress would have to extend those tariffs — something lawmakers are unlikely to do with the Nov. 3 midterm elections looming amid voter dissatisfaction with rising costs of living.

But the administration has more sustainable options: Section 301 of that same 1974 trade law allows the president to impose tariffs and other sanctions against countries found to be engaging in “unjustified,” “unreasonable,” or “discriminatory” trade practices. Trump used Section 301 to impose hefty tariffs on China in his first term and is bringing it up again — late Wednesday when he announced 25% tariffs on some Brazilian imports, accusing the world’s 11th-largest economy of a host of unfair trade practices.

Trade lawyers and analysts are confident that the tariff-happy Trump administration will be able to run the clock and replace Section 122 tariffs with larger Section 301 tariffs by the July 24 deadline. “They’re going to raise the tariff wall again,” said trade lawyer Ryan Majerus, a partner at King & Spalding and a trade official in the first Trump administration and in President Joe Biden’s administration.

Last year, Trump tested – and exceeded – the limits of his authority to impose taxes on imports, a power that the US Constitution grants to Congress. It invoked the International Emergency Economic Powers Act (IEEPA) of 1977 to impose heavy tariffs on most countries in the world.

He justified the tariffs, which represented a stunning reversal of decades of US policy in favor of lower tariffs and free trade, by describing the long-standing US trade deficit as a national emergency.

But the Supreme Court didn’t buy that, ruling last February that the president couldn’t use the Emergency Powers Act to impose tariffs at all. The legal defeat meant the administration had to send refunds to importers who paid the duties.

As a result, tariffs turned, at least temporarily, from a windfall into a drain on the Treasury.

Revenues from import taxes peaked at more than $31.4 billion last October. Then, after the Supreme Court ruling, that amount began to dwindle – to $22 billion in March and April. As refund checks went out faster than Section 122 revenue and other tariffs came in, the number turned negative: A small deficit ($42 million) in May was followed by a massive $25.6 billion loss in June.

Trump and Treasury Secretary Scott Bessent pledged to use other legal powers to make up for lost income.

Enter Section 301, which gives the president the power to impose — and adjust — tariffs in response to the trade practices of other countries. But first the administration must check the procedural boxes – collecting comments and holding hearings. There are no limits on Section 301 definitions. They expire after four years but can be renewed.

So the president has flexibility in how he uses Section 301 definitions. Trump can still change them — after clearing procedural hurdles — but he can’t impose, raise or lower them on a whim as he has often done with the IEEPA definitions. The uncertainty over Trump’s tariff policy has confused companies, making them reluctant to make investments and make decisions because they do not know what the trade rules are.

The shift to rule-bound Section 301 tariffs means “there is less uncertainty but not uncertainty,” said Sarah Bianchi, a former U.S. trade official who is now chief international policy strategist at investment research firm Evercore ISI.

The Trump administration has turned to two major Section 301 investigations in its campaign to recoup lost tariff revenue. One of them accuses 60 countries, representing 99% of US imports, of failing to do enough to eliminate imports resulting from forced labor. The other is to investigate whether 16 U.S. trading partners — including China, the European Union and Japan — are overproducing goods, driving down global prices and putting U.S. manufacturers at a disadvantage.

The administration has already decided what it wants to do about the forced labor issue. Citing Section 301 last month, US Trade Representative Jamison Greer proposed tariffs – 10% on 16 countries and 12.5% ​​on 44 countries – that are the same as or slightly higher than the Section 122 tariffs they would replace. But Greer’s office is still taking public comments on the proposed tariffs and has not yet imposed them.

Nathaniel Halvorson, a partner at the law firm Baker McKenzie and a former U.S. trade official, expects Greer’s office to be able to impose forced labor tariffs in time so that there is not much, if any, “daylight” between them and the expiring Section 122 tariffs. “In fact, they are working as quickly as they can legally,” he said.

The administration has not yet completed another Section 301 investigation into alleged overproduction by 16 countries. Trade lawyer Majerus expects the administration to propose more significant tariffs in this case, likely within a month or two. He doubts its timing will take effect until after the midterm elections for “obvious reasons.”

Trump, who proudly calls himself the “Tariff Man,” has made clear that he seeks to reinstate the massive global import taxes he imposed in 2025. So the new 301 investigations seem like an excuse to do so, and they could be vulnerable in court, Bianchi said.

“Section 301 has been legally robust,” she said. “But no one has tried to use it to essentially set global definitions. I think there will be legal challenges.”