US Treasury May Refund Half Tariffs If Supreme Court Rules Against Trump

Treasury Secretary Scott Bessent stated that if the Supreme Court upholds a ruling declaring President Donald Trump’s reciprocal tariffs illegal under the International Emergency Economic Powers Act (IEEPA), the U.S. government would have to refund about half of the tariff revenue collected, which could amount to tens of billions of dollars and severely impact the Treasury. The tariffs, a significant revenue source expected to generate $300 billion to $400 billion annually, have been credited with helping to reduce the federal budget deficit and support the U.S. credit rating. Although the federal appeals court ruled the tariffs exceeded presidential authority, the Trump administration has appealed to the Supreme Court and remains confident of a favorable outcome. Treasury officials also indicated that other legal mechanisms, such as Section 232 investigations, could be used to impose tariffs if the current ones are invalidated, though this might weaken the administration's negotiating position. The uncertainty surrounding the tariffs has raised concerns in bond markets due to potential increased federal debt from refunds, and economic indicators are showing strain in goods sectors affected by the tariff policy's unpredictable application. The Supreme Court ruling, expected by mid-October, will have significant implications for U.S. trade policy and fiscal stability.