Trump Administration Warns of Stark Economic Consequences If Court Orders Refund of Tariff Revenues

The Trump administration argues the country will suffer devastating economic consequences if an appeals court finds that the president’s tariffs were imposed without proper legal authority.Solicitor General D. John Sauer claims millions of jobs will be eliminated and the future of Social Security and Medicare will be threatened if money already collected through tariffs has to be refunded.“The President believes that our country would not be able to pay back the trillions of dollars that other countries have already committed to pay, which could lead to financial ruin,” Mr. Sauer said in a letter this week to the United States Court of Appeals for the Federal Circuit. The letter was co-signed by the assistant attorney general, Brett Shumate.The “trillions of dollars” figure is believed to include promises of investment in the United States made by countries seeking to avoid higher tariff rates. Studies show most of the money collected directly through tariffs was paid by American companies and consumers, not foreign countries.A panel of 11 judges is reviewing a decision by a lower court in V.O.S. Selections v. Trump that found the president does not have the power to unilaterally levy the 10 percent tariffs he imposed on most countries on “Liberation Day” in April.It is unclear when a ruling will be announced. Any decision by the appeals court is expected to be immediately appealed to the Supreme Court.The Treasury secretary, Scott Bessent, claims that the large sums already collected will make it more difficult for the justices to rule against Mr. Trump. The White House has boasted that the administration has already collected a record $150 billion in taxes from imports.“The amount of money that’s coming in here, the more deals we’ve done, the more money coming in here, it gets harder and harder for Scotus to rule against us,” Mr. Bessent said in an interview with Larry Kudlow on Fox Business News.Mr. Bessent says any Supreme Court decision will not come until at least January, which would mean billions of dollars more of tariff income will be at stake.An economist at ITR Economics says the uncertainty over the future of tariffs is forcing some businesses to put a pause on purchasing decisions.“Anytime there’s uncertainty, that just causes businesses to delay so a lot of folks are in wait-and-see mode,” Lauren Saidel-Baker tells The New York Sun. “They want to know if they order something, what tariff will they pay when that ship finally gets to U.S. shores.”Ms. Saidel-Baker says even if Mr. Trump loses the case it won’t be the end of tariffs. Congress could put them back in place and “there are other levers he can pull,” she says.While the case plays out, the effects are starting to be felt in the economy.In an analysis released this week, Goldman Sachs reported that foreign exporters shouldered just 14 percent of the tariff costs through June. American consumers paid 22 percent and United States businesses ate 64 percent of the added costs.Mr. Trump, who continues to insist that tariffs have not caused inflation, blasted Goldman’s CEO, David Solomon, over the report. “I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution,” Trump posted on Truth Social.Economists say the true effects of tariffs will take at least nine months to filter through to the broader economy, especially since many companies rushed through bigger orders than normal ahead of the tariffs going into effect. Goldman is in that camp. It expects the tariff burden to sharply fall onto consumers by October and inflation to surge. “We stand by the results of this study,” a Goldman economist, David Mericle, told CNBC on Wednesday.

Trump Administration Warns of Stark Economic Consequences If Court Orders Refund of Tariff Revenues

Trump Administration Warns of Stark Economic Consequences If Court Orders Refund of Tariff Revenues

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