What's Section 122? Explaining Trump's new tariff toolkit

• The Supreme Court struck down the Trump administration's tariffs on Friday in a 6-3 ruling.
• But the president has other options to tax imports, a cornerstone of his economic policy.
• On Friday, he discussed alternatives, including a new global 10% tariff using Section 122.

The Supreme Court on Friday knocked down President Donald Trump's controversial tariffs, ruling that the president overstepped his authority by relying on a law normally reserved for emergencies.

The high court ruling, however, only curbed the president's most flexible tool for reshaping global trade. Taxing imports is central to Trump's economic policy, and the president indicated on Friday that the White House has plenty of other options for imposing taxes on imported goods — some of which they are already dusting off.

"We have very powerful alternatives," Trump told reporters at the White House on Friday as he bashed the Supreme Court's ruling.

Here's a rundown of options the Trump administration could turn to next, starting with a new 10% global tariff that the White House announced on Friday.

What other tariff options does Trump have?

Trump can use other laws to impose duties on goods from other countries, including Sections 122 and 301 of the Trade Act of 1974 and Section 232 of the 1962 Trade Expansion Act.

On Friday, Trump mentioned all of these laws as viable alternatives to the International Emergency Economic Powers Act, or IEEPA, which the Supreme Court ruled was not intended for tariffs.

"Effective immediately, all national security tariffs under Section 232, and existing Section 301 tariffs — they're existing, they're there — remain in place, fully in place, and in full force and effect," Trump said.

He added, "Today, I will sign an order to impose a 10% global tariff under Section 122, over and above our normal tariffs already being charged."

Trump also said his administration was "initiating several Section 301, and other investigations, to protect our country from unfair trading practices of other countries and companies."

Section 301 allows the United States to place tariffs on goods from particular countries if they "either violated international trade law or otherwise acted unfairly," according to Rachel Brewster, a professor of international trade at Duke Law School.

It's a "broad standard" that can work to Trump's benefit, Brewster said. And because the law includes provisions that allow the president to form trade deals with other countries to resolve the unfair trade practices, the deals Trump already struck after imposing IEEPA tariffs could likely be "folded into" Section 301, Brewster said.

Section 232, on the other hand, allows the president to impose tariffs on particular goods they deem a national security threat, across all countries. Trump has already used the law broadly — he's applied it to everything from aluminum to bathroom vanities.

Section 122 is a blunt instrument, allowing a blanket tariff of up to 15% on all imports from all countries for up to 150 days. The law is meant to address a "balance of payments" imbalance, and it's possible Trump could use it as a stopgap measure, according to Brewster.

Why Trump's current tariffs were struck down

Before Trump, no president tried to use the IEEPA to impose tariffs. The 1970s-era national security law says that, in case of emergencies, presidents can "regulate" importation.

It's the law he used to justify his April "Liberation Day" tariffs of at least 10% on every country in the world, a 125% tariff on imports from China, and a tariff on any country that imported oil from Venezuela.

In a 6-3 ruling released on Friday, the highest court in the land said that Trump overstepped his authority by using the IEEPA to impose taxes on imported goods.

"IEEPA does not authorize the President to impose tariffs," the ruling said.

Can importers sue over the new tariffs?

One benefit of using Section 301 and Section 232 is that they have already proven legally durable.

Trump used Section 301 in his trade war against China during his first term. Joe Biden, during his presidency, renewed the tariffs and expanded them by imposing additional duties on electric vehicles and solar panel components.

Importers have challenged the tariffs brought under Section 301 and Section 232. So far, they haven't been successful, according to Kathleen Claussen, an international trade arbitrator and professor at Georgetown Law. Courts have ruled in favor of the government on all sorts of legal questions, from whether Trump had the power to bring the tariffs at all, to whether he followed the right process to add or modify particular products that were subject to tariffs.

"Big picture questions down to small, detailed nuances — those were all tested back in Trump One," Claussen told Business Insider.

Why'd Trump use IEEPA if he has those options?

The downside of both Section 301 and Section 232 is that each requires investigations from federal agencies to establish the tariffs, which can take months.

A typical Section 301 United States Trade Representative investigation — to determine whether another country truly acted unfairly, and how high the duties should be in response — usually takes six months, Brewster said.

But the Trump administration can move quickly if it wants to, Claussen said. It can skip procedural steps, like convening a private sector committee or holding hearings.

"I do think people who think we're talking about, 'Oh, this is going to take a couple of months for them to stand up 301 — I don't think it will take that long," Claussen said.

What about that 100-year-old tariff law I heard about?

Trump could also dust off Section 338, a law passed during the Great Depression that has never been used to impose tariffs. The law allows duties of up to 50% for goods from specific countries that "discriminate" against US exports.

The law's language is broad and "squishy," Claussen said, and it could be vulnerable to legal challenges. But it's possible the Trump administration would use it anyway.

"There's no question in my mind that the government is preparing all possible tools and options for the president," Claussen said. "That's what you would imagine that they should be doing. So I would think that they are considering 338, I would think that they're considering 122 and just sort of teeing anything up so the president can choose what he thinks most appropriate."