President Donald Trump is preparing a rapid fallback plan to reimpose sweeping trade levies under alternative laws if the Supreme Court strikes down his use of emergency powers to impose tariffs, according to diplomats and trade lawyers.

The Supreme Court is expected to rule as soon as January on the legality of Trump’s emergency tariff authority — a decision that could threaten the centerpiece of the president’s trade agenda and expose the federal government to billions of dollars in potential refunds for duties already collected.

Markets are bracing for volatility if the court rules against the administration, with investors wary of fiscal fallout and trade disruption, The Financial Times reports.

Still, few in Washington believe the tariffs would simply vanish.

“Nobody thinks the tariffs are going away,” said Ted Murphy, a trade lawyer at Sidley Austin. “They are just going to be reissued under a different umbrella. They will reissue tariffs the same day.”

Trade lawyers say the administration has multiple statutory tools it could deploy, depending on how narrowly or broadly the Supreme Court rules.

One of the most prominent options is expanded use of Section 232 of the Trade Expansion Act of 1962, a national security provision already used to impose tariffs on steel, aluminum, autos, copper and lumber.

The administration has ongoing Section 232 investigations into semiconductors, pharmaceuticals, critical minerals and aerospace components, though results have not yet been released.

Trump could also lean more heavily on Section 301 of the Trade Act of 1974, which allows the U.S. to retaliate against unfair trade practices. That statute has already been used to launch investigations into countries including China, Brazil and Nicaragua, and additional probes could follow.

Another option is Section 122 of the 1974 Trade Act, which would allow Washington to impose tariffs of up to 15% for 150 days to address balance-of-payments concerns. Trade lawyers note the provision is temporary but fast-moving, making it an attractive stopgap if emergency powers are curtailed.

The administration could also revive Section 338 of the Tariff Act of 1930, a rarely used but potent measure that allows tariffs of up to 50% on countries deemed to discriminate against U.S. commerce. Section 338 can be triggered in response to what the law defines as any “unreasonable charge, exaction, regulation, or limitation” harming U.S. trade.

Both Sections 122 and 338 were discussed internally earlier this year as possible mechanisms for Trump’s reciprocal tariff push, according to people familiar with the talks.

But trade experts caution that relying on these alternative laws would come with real constraints.

“If the Supreme Court rules against the administration, Trump’s power to use tariffs both as punishment and reward will be significantly diminished,” said Lori Wallach, director of Rethink Trade. “With other laws, the administration would have to make a case for using tariffs.”

“It will be less like, ‘I woke up and decided I’m annoyed with this Canadian TV advert, so I’m going to raise the tariff rate,’” Wallach added, arguing the shift would blunt Trump’s ability to wield tariffs as an instant political weapon.

Trump has framed the Supreme Court case as existential, calling it “one of the most important cases in the history of our country.” He urged supporters this week to pray for a favorable ruling, saying tariffs are vital to protecting U.S. “National Security and Financial Freedom.”

The administration has collected roughly $236 billion in tariff revenue in 2025, according to government figures.

In any case, importers are already preparing for potential refunds, hiring lawyers and filing claims. Costco recently sued the administration to preserve its right to reclaim duties paid, while dozens of legal briefs opposing the tariffs have been filed, including by the U.S. Chamber of Commerce.

A ruling against emergency tariff powers could also rattle bond markets, widen deficits and inject uncertainty into corporate earnings, even if replacement levies quickly follow.

White House spokesperson Kush Desai warned that the consequences of losing the case would be “enormous,” adding the administration expects a “speedy and proper resolution” from the court.