🇺🇸 What’s Trump’s “Game Two Plan” for Tariffs in the Event of a Supreme Court Defeat?
How a Legal Setback Could Reshape Global Sourcing, Tariff Strategy, and CAFTA Opportunities
As the U.S. Supreme Court prepares to rule on the legality of former President Donald Trump’s Section 301 tariffs on Chinese imports, the trade world is watching closely. If the Court sides against the administration, Trump’s team reportedly has a “Game Two Plan” ready—an alternative pathway to re-impose tariffs using a different legal foundation under the International Emergency Economic Powers Act (IEEPA).
This potential pivot could reshape the landscape for U.S. importers, apparel brands, and regional manufacturing hubs like Guatemala, Honduras, and El Salvador—countries already benefiting from CAFTA-DR (Central America–Dominican Republic Free Trade Agreement) proximity and preferential trade access.
⚖️ The Supreme Court Case: What’s at Stake
The pending Supreme Court case challenges whether the administration overstepped its authority when imposing sweeping tariffs on Chinese goods, including apparel, textiles, machinery, and electronics.
If the Court rules against Trump, his administration would lose the ability to rely on Section 301 of the Trade Act of 1974, which was the legal backbone for much of the U.S.–China tariff structure since 2018.
But Trump’s team appears prepared. According to recent reports, the “Game Two Plan” involves invoking IEEPA, a Cold War-era law that allows the president to impose economic sanctions and import restrictions in response to a declared national emergency. This strategy would sidestep congressional approval and could potentially re-instate tariffs on a broad range of imports from China and other “strategic competitors.”
🧠What It Means for the Apparel and Textile Industry
For apparel brands sourcing from China, Vietnam, and Bangladesh, the uncertainty surrounding U.S. tariff policy means continued volatility in landed costs, duty exposure, and lead times.
Even a temporary gap between tariff enforcement and reinstatement could disrupt production planning, cost forecasting, and retail pricing across the supply chain.
However, for CAFTA-compliant manufacturers like MTAR in Guatemala, this volatility opens the door to new opportunity:
CAFTA-DR remains stable and free of punitive tariffs.
Yarn-forward rules of origin ensure garments made from U.S. yarn and fabric qualify for duty-free entry.
Proximity to the U.S. allows for faster replenishment cycles—critical as brands seek resilience and transparency in their supply chains.
In short: while Asian sourcing remains politically risky, nearshoring to Central America offers reliability, compliance, and cost predictability.
🌎 Tariff Volatility Could Accelerate the Shift to Nearshoring
A Trump “Game Two” approach using IEEPA may face new legal challenges, but even the threat of fresh tariffs will likely accelerate the existing sourcing migration already underway.
Brands are increasingly asking:
How can we de-risk from China exposure?
How can we ensure CAFTA compliance for tariff-free trade?
How quickly can we build capacity in the Western Hemisphere?
MTAR’s vertically integrated facilities in Guatemala are positioned to answer these questions—offering cut-and-sew, knitting, and fleece production that meet CAFTA origin rules and deliver high-quality, short-lead apparel to the U.S. market.
🧩 What Comes Next
If the Supreme Court strikes down Trump’s Section 301 tariffs, expect immediate political and economic response:
Short-term import cost reductions could trigger a brief price relief for U.S. buyers.
“Game Two” tariffs could be re-implemented under IEEPA, renewing uncertainty.
Nearshore manufacturers will likely experience an influx of brand inquiries seeking stability and transparency.
For brands that have waited to diversify from Asia, this could be the moment to act.
🇬🇹 MTAR’s Perspective
At MTAR, we see this evolving tariff environment as a call to action.
The combination of trade policy uncertainty in Asia and CAFTA-protected opportunity in Central Americapositions Guatemala as a key player in reshaping the U.S. apparel sourcing map.
Whether the next administration pursues tariffs through Section 301 or IEEPA, one fact remains clear: sourcing closer to home—compliantly, quickly, and sustainably—is the best long-term strategy.