The Trump administration is racing to replace roughly $1.6 trillion in tariff revenue that vanished last month when the Supreme Court struck down the president’s emergency import taxes, a loss that has thrown the White House’s fiscal strategy into disarray and left business owners navigating a volatile trade landscape with no clear end in sight.
The high court ruled 6 to 3 on February 20 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, invalidating a suite of duties that had been in place since 2025. According to the Congressional Budget Office, those tariffs were expected to generate approximately $1.6 trillion over the next decade. The White House had counted on that revenue to offset the cost of the Republican tax cut legislation, which the CBO estimates will add $4.7 trillion to the national debt over the same period.
A Stopgap Tariff With a Ticking Clock
Within hours of the ruling, Trump signed a proclamation imposing a 10% tariff on all imports under Section 122 of the Trade Act of 1974. That provision allows the president to levy duties of up to 15% without congressional approval, but only for 150 days. The tariff took effect on February 24 and is set to expire on July 24 unless Congress votes to extend it.
Treasury Secretary Scott Bessent said earlier this month that the administration planned to raise the rate to 15%, the legal maximum, but the increase has not yet taken effect. Bessent has maintained that the new tariff structure “will result in virtually unchanged tariff revenue in 2026,” though independent analysts have questioned that claim.
Section 301 Investigations Target 16 Economies
To build a longer-term replacement for the lost revenue, the Office of the U.S. Trade Representative on March 11 launched Section 301 investigations into what it called “structural excess capacity and production in manufacturing sectors.” The probes target China, the European Union, Japan, India, Taiwan, Vietnam, South Korea, Mexico, and eight other economies.
Section 301 of the Trade Act of 1974 gives the government broader authority to impose tariffs, but the process is slower and more complex. Companies can seek exemptions, and legal challenges are expected. The administration is aiming to complete its investigations before the Section 122 duties expire in July, a timeline trade experts consider ambitious.
What This Means for Business Owners
The uncertainty is already reshaping how companies plan. Analysts have described the current environment as one of “maximum trade uncertainty,” with the temporary nature of the Section 122 tariffs making it difficult for businesses to commit to long-term capital expenditures or hiring decisions. Supply chain managers are front-loading inventory, rushing goods into U.S. ports before the July deadline in case what comes next is even more restrictive.
A Congressional Budget Office analysis found that consumers effectively bear the full cost of tariffs, with importers passing along about 70% of the added expense and domestic producers raising their own prices to match. Congressional Democrats cited those figures this week in a report estimating that tariffs will cost the average American household more than $2,500 this year.
Meanwhile, 24 states filed a lawsuit on March 5 asking the Court of International Trade to block the Section 122 tariffs entirely, arguing the administration exceeded its statutory authority. If that challenge succeeds, the revenue gap could widen further before any replacement duties are in place.
The Bigger Fiscal Picture
Before the Supreme Court ruling, the CBO projected that all of Trump’s tariffs, including those not struck down, would generate roughly $3 trillion over a decade, enough to offset about two-thirds of the tax cut legislation’s cost. With the IEEPA tariffs gone, the administration now faces the task of rebuilding that revenue base through legal channels that offer less executive flexibility and more opportunities for opposition.
The result is a fiscal and trade policy environment that remains deeply uncertain for the entrepreneurs and small business owners who have already absorbed months of shifting import costs. Whether the administration can close the gap before the July deadline will determine how much of that uncertainty persists into the second half of 2026.
