The Supreme Court is scheduled to discuss on November 5 the future of global tariffs that President Donald Trump has used to raise revenue, stimulate manufacturing and apply political pressure on other countries. Tariffs are the centerpiece of President Trump’s economic policy and his primary foreign policy tool.
Let’s take a visual look at what this case means for the economy, the federal budget, and consumers.
The economic impact of tariffs compared to Biden’s key policies
The Supreme Court has said in recent years that the executive branch cannot take actions that significantly affect the economy or raise issues of major “political importance” without explicit authorization from Congress.
Lower courts ruled that President Trump lacked clear authority to impose sweeping tariffs, noting that their economic impact far outweighs the costs of policies such as student loan debt relief that the high court blocked during President Joe Biden’s administration.
Here’s how the size of the tariffs compares to the debt relief plan the court rejected in 2023:
Impact on consumers and businesses
President Trump has argued that countries that want to sell their goods to Americans will absorb import taxes to remain in the world’s largest consumer market. But independent analysts including Goldman Sachs and S&P Global estimate that U.S. consumers and businesses are bearing much of the cost.
The Tax Foundation, a nonprofit think tank, estimates that the tariffs would amount to an average tax increase of $1,300 per household in 2025.
According to the Penn Wharton budget model, the tariffs are equivalent to raising the corporate tax rate from 21% to 36%.
Impact of President Trump’s tariffs on the federal budget
Republicans hope that tariff revenue will offset some of the costs of President Trump’s sweeping bill, tax cuts and other federal policy changes. But if the Supreme Court rules that many of President Trump’s tariffs are illegal, lawmakers will need to find other offsets to avoid digging an even bigger budget hole.
According to the bipartisan Committee for a Responsible Federal Budget, the tariff revenue is more than what the government collects through a 1% payroll tax or a 17% cut in military personnel.
President Trump’s tariffs are unpopular
President Trump claims the tariffs will bring manufacturing and jobs back to the United States, but the American people do not support him.
According to an August Pew Research Center survey, 6 in 10 Americans disapprove of the Trump administration’s tariff policies.
A majority of Americans believe the long-term effects will be negative both for the country (55%) and for themselves and their families (55%).
As with many political issues, ideological divides also exist. Republicans have a variety of views on tariffs, but Democrats are largely negative.
SOURCE USA TODAY NETWORK REPORTS AND INVESTIGATIONS. Congressional Budget Office; Tax Foundation; Penn Wharton Budget Model. Committee for a Responsible Federal Budget. Pew Research Center
