President Trump has cautioned that the U.S. could experience an “economic disaster” if his appeal to the Supreme Court falls short and his tariffs are unable to be implemented. On Friday, a federal appeals court ruled 7-4 that Trump’s tariffs, which were imposed under a 1977 emergency law, overstepped his legal authority. The tariffs will remain in effect until at least October 14.
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“If we don’t have it, we’re not going to have a country. We’re going to be in very, very serious financial trouble,” Trump said in an interview on The Scott Jennings Radio Show on Tuesday.
On Monday, Treasury Secretary Scott Bessent said that he is confident that the Supreme Court will rule in favor of Trump. At the same time, the administration is also preparing a backup plan to argue the legality of the tariffs.
Tariff Refunds Could Force More Borrowing, Worsen Deficit
The U.S. could be on the hook to refund tariff collections if the Supreme Court decides to uphold the tariff ruling, adding strain to an already heavy debt burden. In July, U.S. tariff revenue reached a monthly record-high of $27.7 billion compared to $8 billion a year ago. Tariff revenue is expected to reach $172.1 billion this year, according to the Tax Foundation.
If the U.S. is forced to refund tariffs, the government may need to issue more Treasury bonds amid elevated interest rates, wrote Raymond James managing director Ed Mills. Such a move would drive the federal deficit even higher.
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