Trump’s Tariff Gamble Could Cost US Billions, Treasury Chief Warns

International News: US Treasury Secretary Scott Bessant warned on Sunday that the government could have to return billions of dollars in tariff revenue if the Supreme Court decides that President Donald Trump overstepped his bounds in imposing tariffs.

"We would have to return about half of the tariff amount, which would be a big blow to the Treasury," Bessant said on NBC's 'Meet the Press' program. He also said that if the court gives such an order, the administration would have to comply with it. Despite this, he expressed confidence that the Trump administration would win the case.

Legal disputes over Trump's tariffs

Two federal courts have already ruled that Trump's powers to impose broad tariffs were not sufficient under the 1977 International Emergency Economic Powers Act (IEEPA). The Federal Circuit Court of Appeals said in August that Trump had overstepped his authority by imposing "competitive tariffs" on almost all countries. The court postponed its decision until October 14 so that an appeal can be made. Trump has asked the Supreme Court for a hearing in November.
US Customs and Border Protection has so far collected more than $70 billion under the new tariffs implemented in August. Bessant warned that if the lawsuit continues until mid-2026, the refund amount could be between $750 billion and $1 trillion, which will have a major impact on US financial stability.

Domestic and global impact

Bessant acknowledged that a defeat in the Supreme Court could weaken Trump's trade negotiating power. However, he said the administration has several options. Kevin Hassett, director of the National Economic Council, said the administration could impose tariffs on national security grounds under Section 232.

Some tariffs will be unaffected by the legal dispute, such as the removal of a "de minimis exemption" on import goods worth less than $800. The court's decision has created uncertainty over Trump's trade policy based on about 70% of US imports.

Additional sanctions on Russia

Bessant also indicated that the US and European partners could impose additional sanctions on countries buying oil from Russia. He said that if this happens, Russia's economy will be deeply affected and Putin will be forced to negotiate.

State of the American economy

Unemployment has increased in America. According to the Bureau of Labor Statistics, only 22,000 new jobs were created in August, and the unemployment rate rose to 4.3%. Besant, however, did not consider this a "jobs recession" and called the GDP of 3.3% and the high level of the stock market a positive sign. He said that the tariff has stabilized revenue, and it will help in the creation of high-paying jobs.