Refunds are expected to be complicated, with Treasury Secretary Scott Bessent saying it could take a year. President Trump warned of “retaliation” from countries where there is no threat of tariffs.
Are President Trump’s tariffs too big to fail at the Supreme Court?
Reporter Maureen Groppe explains the importance of the Supreme Court hearing the tariff case that could define President Trump’s term in office.
WASHINGTON – The Supreme Court’s decision to overturn most of President Donald Trump’s tariff policies has raised concerns about how he will handle domestic budgeting and international trade.
Tariffs are projected to generate $2.5 trillion over the next 10 years. The loss of some of the tariffs that courts have ruled illegal will leave a gaping hole in President Trump’s spending priorities and deficit reduction.
Trump also argued that tariffs would give him greater leverage in negotiations with foreign leaders and businesses on trade, immigration, drug enforcement and military conflicts.
“We failed!” President Trump said on social media on January 12 if the high court overturns the tariffs.
In a social media post before the high court’s arguments in November, President Trump warned that the country would face “economic disaster” if the tariffs were not continued, calling the case a “life or death” issue.
Following the High Court’s ruling, we would like to introduce four issues that deserve attention.
President Trump could impose tariffs under another law
Treasury Secretary Scott Bessent said if the Supreme Court overturns tariffs under the International Emergency Economic Powers Act of 1977, the administration could impose tariffs under other statutes.
But Trump insists that none of the other options are as easy to impose or wield as threats.
The administration expanded tariffs on steel and aluminum and imposed tariffs on automobiles and parts under Section 232 of the Trade Expansion Act of 1962. The law authorizes the president to impose tariffs if the Secretary of Commerce determines that products are “imported into the United States in quantities or under circumstances that threaten to compromise national security.”
Bessent said tariffs could also be imposed to correct unfair trade practices under Section 2 of the 1974 Trade Act. One provision allows for the imposition of tariffs of up to 15% for 150 days, such as when there is a large trade surplus. Another section addresses “foreign practices that are unreasonable or discriminatory and burden or restrict U.S. commerce.”
The administration has already held hearings on whether China’s semiconductor policies merit tariffs. President Trump has directed the U.S. Trade Representative to consider whether taxes on digital services levied by Austria, Canada, France, Italy, Spain, Turkey, and the United Kingdom amount to tariffs.
Refunds ‘could take more than a year’: Bessent
Even before the high court’s ruling, thousands of importers, including Costco, Revlon, and Goodyear, filed suit in the U.S. Court of International Trade seeking refunds for an estimated $150 billion in duties they paid.
But Trump administration officials said that if the Supreme Court finds that the tariffs were collected illegally, companies will receive refunds without filing a lawsuit.
The Committee for a Responsible Federal Budget estimated in October that about $90 billion of the $195 billion in tariffs collected in Trump’s first year in office could be returned, based on Customs and Border Protection figures. According to the Ministry of Finance, the government collects more than $30 billion in customs duties every month.
Bessent told Reuters on January 9 that the administration has enough funds to refund the tariffs, but that the repayments could take weeks or even a year. As of January 8, the Treasury had about $774 billion on hand.
“We’re not talking about money disappearing in a day,” Bessent said. “Probably weeks, months, maybe even a year or more?”
Supreme Court ruling could cost trillions of dollars to federal budget
The tariffs are expected to raise a significant amount of money for President Trump’s spending priorities and deficit reduction.
The nonpartisan Congressional Budget Office (CBO) predicted in November that total tariffs would generate $2.5 trillion over the next 10 years. By reducing the need for additional borrowing, the tariffs are projected to reduce interest payments on the national debt by $500 billion.
Lawmakers use the CBO as part of calculating how much they spend each year. But lower tariffs mean less revenue available to spend.
The tariff rates subject to the Supreme Court’s decisions varied over the years. But the Committee for a Responsible Federal Budget, an advocacy group, estimated in October, based on Customs and Border Protection figures, that $90 billion in total tariffs collected during President Trump’s first year in office could be refunded.
Proposals for funding had expanded even before the High Court ruling. Trump’s proposals included reimbursing farmers billions of dollars for crops they can’t sell overseas due to retaliatory tariffs and mailing $2,000 checks to U.S. taxpayers.
But since Trump took office, the average American household has paid nearly $1,700 in tariffs, according to Democrats on the Congressional Joint Economic Committee. According to the commission, Americans paid an estimated $231 billion in tariffs between February 2025 and January 2026.
“President Trump’s tariffs are a disaster for American families, raising costs at the worst possible time,” Sen. Maggie Hassan of New Hampshire, the committee’s top Democrat, said in a Feb. 20 statement. “Thankfully, the Supreme Court correctly ruled that much of President Trump’s tariff agenda is an unlawful exercise of presidential power, but today’s ruling cannot undo the damage the tariffs have already caused.”
How will other countries that have condemned the tariffs react?
Leaders of other countries denounced the tariffs when President Trump announced them before negotiating new trade deals to soften the impact of the tariffs.
For example, China and Canada have imposed retaliatory tariffs. China’s tariffs severely restricted imports of American soybeans and other agricultural products until the armistice. President Trump announces $12 billion in agricultural aid. Canada continues to negotiate.
Britain and the European Union each condemned the tariffs before reaching a new trade deal.
In a Jan. 12 social media post, President Trump warned of “retaliation” from countries and companies that abandon trillions of dollars of investment in U.S. factories and equipment without the threat of tariffs.
