Supreme Court is weighing now Whether President Trump’s tariffs, which are contingent on a specified economic emergency power, can remain in place. Due to this, one of his biggest policy initiatives is hanging in the balance.
While keeping the tariffs in place would symbolize a vast expansion of presidential power, reducing them could present a number of dilemmas for Trump — from securing massive payments to finding new legal authority to pursue his priorities.
What awaits the administration, in the words of Supreme Court Justice Amy Coney Barrett, is “a mess.”
Refunds for companies
The Trump administration has acknowledged that a Supreme Court loss would mean a refund of billions in tariff revenues already collected.
This convinced lower courts to put on hold their rulings invalidating the tariffs partly because there were concerns that refunds could be issued, only for the Supreme Court to potentially declare the tariffs legal and make it difficult to get the cash back.
Refunds would be simplest for the group of small businesses challenging Trump’s tariffs in high court; The administration has already agreed to pay them back if they lose.
As for others, Neal Katyal, who represented businesses at the debate, told Barrett, “This is a very complicated thing” that involves formal protests and administrative processes.
“So, messed up?” Barrett replied.
Katyal replied, “So, it’s absolutely difficult.”
U.S. Trade Representative Jameson Greer told Fox News on Thursday that if the court rules against the challengers he will “submit that file” to the Treasury Department to process the refunds.
“You’re going to have all these importers and importer interests who want that money back,” Greer said. “And so, we’ll probably have to figure out with the court what kind of schedule that might be and what rights these parties have and what rights the government has to that money.”
Following this argument, businesses have already filed new lawsuits at the International Trade Court to ensure this.
“However, this separate action is necessary because even though the IEEPA [International Emergency Economic Powers Act] “As the duties and underlying executive orders have been deemed unlawful by the Supreme Court, importers who paid IEEPA duties, including plaintiffs, are not guaranteed a refund for the tariffs unlawfully collected in the absence of its judgment and judicial relief,” Turn5, an auto parts e-commerce business, said in a statement. wrote in a lawsuit Filed on Thursday.
The government has faced this problem before after the Supreme Court declared the port maintenance tax unconstitutional in 1998. This sparked a new round of litigation that lasted nearly two years as the companies fought for refunds.
But that fight involved only $750 million, far less than the billions of dollars already collected under Trump’s new levy. Greer told Fox News that “reciprocating” tariffs already amount to more than $100 billion.
Trump has said that a defeat would turn the United States into a “Third World country” and presented the matter as a life-or-death moment. He reiterated his concerns after Supreme Court arguments, where the justices appeared skeptical of the administration’s arguments when asked what they planned to do about the high court’s ruling against the White House.
The President argued that the government would have to pay “trillions of dollars” because it took that much from the tariffs. He said the loss would also impact trade deals made by his administration based on projected trade earnings.
“I hope we win,” Trump said Thursday. “I can’t imagine that someone would cause this kind of devastation in our country.”
Once resolved, the funds will go back into the companies’ coffers, as they were legally liable to bear the costs. But Americans who paid increased prices because of the tariffs likely won’t get the money back in their pockets.
Find new tariff options
An adverse Supreme Court decision could prevent Trump from invoking the International Emergency Economic Powers Act of 1977 (IEEPA) to implement large parts of his sweeping tariff agenda.
This would force the President to look for other legislation to bring about sweeping changes to global trade.
“The tariff architecture of Title 19 consists of several statutes that clearly grant the power to tariff and always impose clear limits,” Katyal said, referring to the section of the law dealing with customs duties.
Katyal listed several options, including Sections 122, 201 and 301 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930. Later in the argument, he also referred to Section 232 of the Trade Expansion Act of 1962.
under section 122 authority, Trump could impose tariffs of up to 15 percent for up to 150 days on imbalanced trade, although this has not been used before.
The President could call section 201 The authority to impose tariffs, following the investigation and findings of the U.S. International Trade Commission, if an increase in imports is causing or threatening “serious injury” to American manufacturers.
using the section 232 The authority could impose sanctions on Trump imports if the U.S. Commerce Secretary determines, after an investigation, that certain circumstances of those imports “threaten to impair” national security.
Trump may direct the Office of the U.S. Trade Representative to impose tariffs as an enforcement measure of U.S. rights under trade agreements and in response to certain foreign trade practices, following an investigation by the office. section 301 rights.
and by calling section 338 authority, the President can impose tariffs on imports “whenever he finds as a matter of fact” that foreign nations impose “unfair” tariffs or discriminate against American commerce. Those fees cannot exceed 50 percent. No president has used that measure.
“You can recreate some of what they want to do,” said John Yu, a University of California, Berkeley professor and former clerk to Justice Clarence Thomas, at a panel during the Federalist Society’s annual convention.
Nazak Nikkhtar, partner and chair of Willie Rein’s national security practice, said on the same program that every trade statute that allows the president to impose tariffs “explicitly says ‘duties'” and lays out a process.
“IEEPA looks very different, and I think it’s based on the text [arguments]The president is likely to lose,” she said.
Justice Samuel Alito said during Wednesday’s arguments that it is a “realistic possibility” for the administration to try a new approach.
But Trump would then attempt to collect the tariffs under a new legal authority and, essentially, the plaintiffs would take them back to court.
“And it will have to move through those lower courts and come back to us – a year from now? Six months from now? While tariffs continue to be collected, and the amount at stake will be in the billions?” the conservative justice said.
“I mean, what level are we at right now, a hundred billion? We’ve reached – a trillion?” He continued. “Is that what you are suggesting?”
