Politics

Supreme Court Showdown: Will Trump’s Tariffs Cost U.S. Businesses Billions?

Trump’s tariffs face a $200B+ refund if SCOTUS deems them unlawful. The ruling could impact the economy.

byEditorial Staff

September 3, 2025, 12:02 PM

The United States Supreme Court building in Washington D.C., a large white marble structure with Corinthian columns

The Supreme Court building stands majestically on a bright, clear day in Washington D.C. By MDL.

Executive Summary

The U.S. government could face over $200 billion in refunds to businesses if the Supreme Court deems President Trump’s tariffs unlawful, following a federal appeals court ruling that Trump improperly used IEEPA.

American businesses have paid over $210 billion in these tariffs, and the Supreme Court is expected to consider the Trump administration’s appeal, with tariffs likely remaining in effect during the process.

Should the Supreme Court affirm the lower court’s finding, it would cease collections and trigger complex refund scenarios, potentially leading to increased government borrowing, higher yields, and inflationary pressures.

The Story So Far

The ongoing legal challenge against President Trump’s sweeping tariffs stems from a federal appeals court ruling that he improperly utilized the International Emergency Economic Powers Act (IEEPA) to implement broad duties during his administration. If the Supreme Court upholds this decision, the U.S. government could face refunds totaling over $200 billion to American businesses, which would necessitate increased government borrowing and potentially lead to broader economic repercussions.

Why This Matters

Should the Supreme Court deem President Trump’s tariffs unlawful, the U.S. government faces a potential liability of over $200 billion in refunds to American businesses, which would necessitate increased government borrowing and could push up Treasury yields, thereby raising borrowing costs across the broader economy and potentially fueling inflation.

Who Thinks What?

President Trump’s administration imposed tariffs and is appealing a lower court ruling to maintain them, acknowledging potential refunds if the Supreme Court rules unfavorably.

A federal appeals court has ruled that Trump improperly utilized the International Emergency Economic Powers Act (IEEPA) to implement broad duties on various countries.

American businesses have paid over $210 billion in tariffs and would welcome refunds, while the U.S. government faces potential increased borrowing, higher yields, and inflationary pressures if refunds are mandated.

The U.S. government could face refunds totaling more than $200 billion to American businesses if President Trump’s sweeping tariffs, imposed during his administration, are ultimately deemed unlawful by the Supreme Court. A federal appeals court has already ruled that Trump improperly utilized the International Emergency Economic Powers Act (IEEPA) to implement broad duties on various countries, setting the stage for a significant legal and financial challenge.

Legal Battle Over Tariffs

As of August 24, American businesses have collectively paid over $210 billion in these tariffs. President Trump has acknowledged that an unfavorable court decision could necessitate the U.S. Treasury “giving back” collected tariff revenue. He is reportedly urging swift action to maintain the tariffs beyond an upcoming October 14 deadline.

The nation’s highest court is expected to consider the Trump administration’s appeal during its upcoming term. While the Supreme Court could decline to hear the case, thereby deferring to the lower court’s decision, it is widely anticipated that the tariffs will remain in effect while the appeal process unfolds.

Potential Economic Repercussions

Should the Supreme Court affirm the lower court’s finding that Trump lacked the legal authority under IEEPA to impose the tariffs, the administration would be compelled to immediately cease collections. The process for handling potential refunds, however, remains uncertain.

Possible scenarios include the government refunding all importers who paid the invalid tariffs or limiting refunds solely to the named plaintiffs in the lawsuit. Another option could involve the government seeking court approval for an administrative refund process, requiring importers to actively request their refunds. Representatives from the Treasury Department have declined to comment on how such refunds might be administered.

While businesses might welcome the prospect of refunds, the economic implications extend beyond individual companies. The hundreds of billions of dollars in tariff revenue held by the Treasury have reduced the government’s need for borrowing. Reversing these tariffs would likely necessitate increased government borrowing to cover its expenses.

This increased borrowing could lead to the sale of more Treasury bonds, potentially pushing up yields and, consequently, borrowing costs across the broader economy. There are also concerns that substantial refunds could contribute to inflationary pressures.

The ongoing legal challenge highlights the significant financial and economic stakes tied to the legality of President Trump’s tariff policies, with the Supreme Court’s decision poised to have lasting repercussions for both businesses and the national economy.