Trump tariffs face $1 trillion refund threat as Supreme Court weighs legality

The United States government could be on the hook for up to $1 trillion in refunds if the Supreme Court agrees with lower courts that former President Donald Trump’s tariffs on foreign imports were unlawful.

Treasury Secretary Scott Bessent sounded the alarm in a declaration filed with the high court last week, warning that reversing the tariffs could trigger massive financial disruption. The Trump administration is now urging the Supreme Court to fast-track a ruling, rather than wait until next summer.

“The stakes in this case could not be higher,” Solicitor General D. John Sauer wrote in the administration’s petition. “To the President and his most senior advisors, these tariffs thus present a stark choice: With tariffs, we are a rich nation; without tariffs, we are a poor nation.”

Two federal courts have ruled that Trump overstepped his presidential authority by using the International Emergency Economic Powers Act (IEEPA) to impose sweeping levies on nearly every U.S. trading partner. Those rulings put tens of billions of dollars in collected tariffs, and future revenue, in jeopardy.

As of August 24, U.S. Customs and Border Protection had collected over $72 billion under the tariffs since their introduction. Bessent warned that if the Supreme Court does not act swiftly, the refund bill could climb to between $750 billion and $1 trillion, covering both past and projected collections.

“Unwinding them could cause significant disruption,” Bessent said, adding that refunds would be mandatory if the tariffs are declared illegal.

The Trump administration’s request for an expedited review aims to reduce the government’s potential liability. Legal experts say the move increases the chances of a decision before the end of the year, although the court has yet to indicate whether it will take up the case on an accelerated schedule.

If refunds are ordered, analysts expect a chaotic process. Importers would likely need to file claims, and some companies are already fielding offers from firms seeking to buy refund rights at steep discounts — betting on a Supreme Court victory for trade challengers.

The White House has not commented on the pending case.