Lead: On Sept. 7, 2025, Treasury Secretary Scott Bessent said he is confident President Trump’s reciprocal tariff program will prevail at the Supreme Court but warned that if the high court strikes it down the Treasury could be forced to issue massive refunds, potentially affecting hundreds of billions of dollars collected so far.
Key Takeaways
- The administration asked the Supreme Court for an expedited review after an appeals court found most reciprocal tariffs unlawful.
- Bessent warned that a loss could require refunds on roughly half the tariffs, risking major fiscal disruption.
- Delaying a final decision until June 2026 could mean $750 billion to $1 trillion in collected duties would need unwinding, per Treasury estimates.
- Before the litigation, the tariffs covered nearly 70% of U.S. goods imports; if struck down they would affect about 16% (Tax Foundation data).
- The administration is preparing alternatives, including using Section 232 or sector-specific levies, according to National Economic Council Director Kevin Hassett.
- The appeals court paused its judgment until Oct. 14 to allow an appeal to the Supreme Court; the administration seeks early-November argument dates.
- The administration also removed the de minimis exemption for low-value parcels (under $800), a move that depressed some postal flows by over 80% according to the Universal Postal Union.
Verified Facts
Treasury Secretary Scott Bessent told NBC’s ‘Meet the Press’ that he expects the Supreme Court to rule for the administration but acknowledged that a court reversal would obligate the Treasury to return duties collected on about half of the levy items, which he described as ‘terrible for the Treasury.’ The remark and date were made public on Sept. 7, 2025.
The U.S. Court of Appeals for the Federal Circuit ruled in August 2025 that most of the president’s reciprocal tariffs exceeded presidential authority. That ruling was administratively stayed until Oct. 14 to permit an appeal to the Supreme Court. The administration has formally requested expedited briefing and asked the court to hear arguments in early November.
Bessent warned that if the Supreme Court delays a ruling into June 2026, an estimated $750 billion to $1 trillion of tariffs may have been collected and could require refunds. Those figures were presented by Treasury as a projected range tied to the timing of any final decision.
Context & Impact
The disputed tariffs were announced as ‘reciprocal tariffs’ and, prior to litigation, would have applied to nearly 70% of U.S. goods imports, according to the Tax Foundation. If most measures are invalidated, the coverage would fall to roughly 16%.
A requirement to refund hundreds of billions would represent an unprecedented transfer back to importers, foreign firms, and intermediaries that paid duties. That could complicate federal cash flows and raise questions about who would claim and receive refunds and how quickly payouts could be administered.
Officials are exploring alternative legal paths to preserve trade levies if the Supreme Court rules against the administration. Options cited publicly include invoking Section 232 of the Trade Expansion Act of 1962 for national-security-based tariffs and deploying sector-specific tariffs through other statutory authorities.
Operational changes already implemented include ending the ‘de minimis’ exemption for goods valued at $800 or less, which the administration says tightens enforcement but prompted an abrupt fall in postal traffic into the U.S., with the Universal Postal Union reporting declines exceeding 80% as postal operators sought compliance guidance.
Official Statements
‘We would have to give a refund on about half the tariffs, which would be terrible for the Treasury,’
Scott Bessent, U.S. Treasury Secretary
‘There are other legal authorities that the administration could use should the tariffs be blocked,’
Kevin Hassett, National Economic Council Director
Unconfirmed
- Precise timing and scale of any refunds depend on final court rulings and administrative implementation details that remain unresolved.
- How rapidly refunds would be processed and which entities would file claims has not been finalized publicly.
- Any alternative tariff actions using other statutes could face separate legal challenges and are not guaranteed to replicate the original program’s scope.
Bottom Line
The Supreme Court’s decision on the legality of the reciprocal tariffs will shape U.S. trade policy and federal finances for years. A ruling against the administration could force large-scale refunds and prompt alternative measures that would themselves carry legal and operational risks. Observers should watch the court’s schedule, the Oct. 14 administrative stay, and any fast-tracked briefing dates in early November.