Key Points
- The Supreme Court is set to rule on the legality of Trump’s tariffs imposed under the IEEPA.
- If the court rules against the administration, it could be required to refund more than $133.5 billion to importers.
- The tariffs in question include “reciprocal” duties and punitive tariffs imposed on countries such as China, Brazil, and India.
- President Trump has falsely claimed that the tariffs have raised much more revenue than they have.
The Trump administration could be liable for a massive refund of over $133.5 billion in tariffs. The U.S. Supreme Court is set to rule on whether President Trump had the legal authority to impose these taxes under a 1977 law meant for national emergencies. If the court rules against him, the government might have to pay back every dollar it has collected from importers since last February.
The law in question, the International Emergency Economic Powers Act (IEEPA), gives the president broad power to impose sanctions during a national crisis. Trump has used this law to justify a wide range of tariffs, including “reciprocal” duties on goods from all countries, punitive tariffs on Brazil and India, and special taxes on goods from China and Mexico related to the fentanyl crisis.
The Supreme Court heard arguments in the case back in November, and the justices seemed skeptical of the administration’s broad interpretation of the law.
Online betting markets, which had previously given Trump a 40% chance of winning, have now reduced that to around 30%. The court is expected to release a batch of rulings on Friday, but it’s not yet known if this case will be among them.
Even if the court declares the tariffs illegal, it’s unclear whether it will order an immediate refund. They could leave that decision to the lower courts or the federal government.
President Trump has repeatedly claimed that his tariffs are a significant revenue source for the U.S. Treasury. On Monday, he falsely claimed that the government has collected or will soon collect $600 billion.
The actual numbers are much lower, with total customs duties reaching a record $195 billion in the last fiscal year. This $133.5 billion is a subset of that total, and a refund would be a major blow to the administration’s trade policy.
