If Donald Trump loses his high-stakes Supreme Court battle over tariffs, Washington could be on the hook for a colossal refund for tens of billions of dollars to companies that have paid import fees this year, plus interest. And the tab could explode even higher if the justices drag their feet, ballooning to a jaw-dropping $1 trillion.
Tech firms are sweating the outcome. A Trump loss wouldn’t just mean clawing back duties they’ve shelled out — money they’d rather sink into staying competitive. Economists warn it could also blow apart long-term global supply chains, with tariff shocks threatening “innovation itself,” as economics lecturer Matthew Allen wrote, especially in “tech-intensive, IP-led sectors like semiconductors and software.”
At issue are two Supreme Court cases that challenge whether a president can unilaterally slap tariffs on foreign goods under the International Emergency Economic Powers Act. Trump insists his “reciprocal tariffs” were justified to fix the supposed trade “emergency” he says left other countries flush while pushing the US “to the brink of catastrophic decline.”
The betting markets aren’t buying it. After last week’s oral arguments, prediction markets tanked Trump’s odds of winning from 50% to 25%, Forbes reported, as justices sounded wary of his sweeping authority claim.
Credit: Fred Schilling, Collection of the Supreme Court of the United States.
Economists are urging the Court to shut the whole thing down, warning that Trump’s vision of open-ended tariff power could have an economic impact “far greater than in two programs” the Court has already rejected, including the Biden administration’s $50 billion student-loan giveaway.
The potential fallout is massive. Treasury Secretary Scott Bessent told the justices in September that “the amount to be refunded could be between $750 billion and $1 trillion if the court waits until next summer before issuing a ruling that says the tariffs have to be repaid,” according to CNBC.
Even some conservative-leaning justices are wary. Justice Amy Coney Barrett warned during arguments that ripping up the tariff regime could be “messy,” CNBC reported.
But business owners who joined the We Pay Tariffs coalition say the government is overthinking it. They told CNBC that customs paperwork already includes line-item tariff data, making repayments easy. Companies could get lump-sum checks or credits down the road, they said.
Rick Muskat, CEO of family-owned shoe brand DeerStags, told CNBC his company has forked over more than $1 million in tariffs, and getting that money back shouldn’t be a bureaucratic nightmare.
“It should be simple for importers to apply for refunds based on this tariff itemization,” he said. If the IRS can refund overpaid taxes, he added, Customs should have “no problem” cutting checks of its own, especially since officials issued automatic refunds during a 2018 trade dispute with “no issue.”
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