 |
| The Supreme Court has agreed to hear and expedite a case on whether Trump's tariffs are legal. Carlos Barria/REUTERS |
The United States may soon face one of the most expensive constitutional rulings in modern history. Legal experts warn that if the Supreme Court strikes down President Donald Trump’s emergency tariffs, the government could be liable for $750 billion to $1 trillion in refunds — a staggering fiscal burden that highlights the tension between presidential authority, congressional power, and global trade.
Why the Case Matters Now
The Supreme Court has agreed to expedite its review after two lower courts ruled the tariffs illegal. Trump’s legal team urged urgency, warning that undoing tariffs already collected could cause “ruinous” consequences for the economy. Treasury Secretary Scott Bessent echoed the concern in a filing: if a ruling were delayed until June 2026, nearly a trillion dollars in tariffs might already be on the books, requiring a refund.
Still, legal scholars caution that constitutional principles — not fiscal fears — must guide the Court’s ruling. As trade attorney Will Planert explained: “If the tariffs are illegal, then they are illegal irrespective of fiscal impact.”
The Tariffs Under Fire
Since February, the Trump administration has imposed sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), a 1970s law historically used for sanctions during national emergencies.
Unlike traditional tariffs, which usually target specific industries, these measures were broad, unpredictable, and global in reach:
-
A short-lived cumulative 245% tariff on China.
-
Tariffs on imports from more than 75 trading partners beginning in April.
The Court of International Trade and a federal appeals court found the measures unconstitutional, arguing that only Congress has the authority to set duties. Still, the tariffs remain in effect because lower courts denied an injunction to block them.
What’s at Stake for the Supreme Court
The case cuts across partisan lines. While Trump-appointed justices might be sympathetic to executive power, some conservatives are wary of expanding presidential authority over the economy.
Planert noted parallels to the Court’s skepticism toward Biden’s student loan forgiveness plan: “Those justices have been very skeptical of the idea that Congress can confer very broad economic powers on the president or the federal agencies.”
William Reinsch of the Center for Strategic and International Studies added: “When it comes to an economic issue, the Court doesn’t always break along typical ideological lines.” He suggested the ruling could even mark the first time the Court decisively rules against Trump on a high-stakes constitutional matter.
The Potential Fallout: $1 Trillion in Refunds
If overturned, the federal government could owe importers hundreds of billions in refunds. This wouldn’t be unprecedented. In 1998, the Supreme Court struck down the Harbor Maintenance Tax on exports, forcing the government to pay back more than $1 billion to exporters.
But the scale this time is unprecedented. Trade lawyer Robert Shapiro explains:
-
Companies typically must file a protest for each shipment to qualify for refunds.
-
With tariffs covering nearly all imports since April, the system could be overwhelmed.
-
The Board of International Trade may need to step in to oversee a streamlined refund process.
The bigger question: if importers get refunds, could consumers who paid higher prices because of tariffs demand compensation, too?
Economic Ripple Effects
The Tax Foundation estimates Trump’s tariffs could generate $2.3 trillion in revenue over the next decade, but at the cost of reducing GDP by 0.9%, not accounting for retaliation from trading partners.
Businesses argue that these costs have already been passed down to consumers. If refunds are issued, it raises thorny legal questions about whether customers — who paid higher prices at the grocery store, car dealership, or electronics counter — could pursue claims of their own.
Constitutional Principles vs. Fiscal Pain
Despite the financial stakes, experts stress that the Supreme Court’s task is fundamentally constitutional. Planert notes: “The government would have collected a very large amount of money that it’s not entitled to, which would be all the more reason to have it returned.”
The ruling will not only decide the fate of Trump’s tariffs but could also reshape the balance of power between Congress and the presidency for decades to come.
What Comes Next
-
The Supreme Court is expected to issue a ruling before the end of the year.
-
If the tariffs are upheld, Trump’s trade strategy will remain intact, giving the executive branch sweeping control over trade policy.
-
If struck down, the United States could be forced into a historic wave of refunds — with implications for businesses, consumers, and the federal budget alike.
Either way, the decision could become a defining case in modern trade law and constitutional checks and balances.
