The US Department of the Treasury has adequate funds to pay any tariff refunds ordered if the US Supreme Court rules against US President Donald Trump’s tariffs, but any repayments would be spread out over weeks or even a year, US Secretary of the Treasury Scott Bessent said.
Bessent said in an interview that he still doubted that the court would rule against Trump’s tariffs, but he believed that any refunds would be a “corporate boondoggle” for companies that passed on added costs to their customers.
Bessent said that any negative ruling might not be a simple yes-or-no result, but something more nuanced that could complicate the refund process.
Photo: Bloomberg
“It won’t be a problem if we have to do it, but I can tell you that if it happens — which I don’t think it’s going to — it’s just a corporate boondoggle,” Bessent said. “Costco, who’s suing the US government, are they going to give the money back to their clients?”
Bessent claimed companies generally were not passing tariffs on to consumers, saying there was “very, very little, if any, pass-through,” and disputed that Trump’s tariffs contributed to inflation. He said goods inflation had been below headline inflation.
Importers and trade lawyers had anticipated a Supreme Court ruling on Friday but the court instead issued a ruling on a different matter. It remains unclear when the court would rule on the tariff case, which challenges Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs on nearly every US trading partner.
Bessent said he believed that the longer the tariff decision is delayed, the more likely it is that the Supreme Court rules in Trump’s favor.
With cash on hand of nearly US$774 billion as of Thursday, the Treasury has more than enough funds to cover any refunds. The Treasury’s borrowing estimates for the January-March period project an end-March cash balance of about US$850 billion.
“We’re not talking about the money all goes out in a day. Probably over weeks, months, it may take over a year, right?” he said.
Bessent said he expects Treasury budget data for the calendar year last year to show a deficit reduction of US$300 billion to US$400 billion from calendar 2024, providing additional capacity. The US government operates on a fiscal-year basis, reporting a deficit of US$1.775 trillion for fiscal last year, which ended on Sept. 30.
Importers have said they expect difficulty in recouping any tariffs paid if the Supreme Court finds that Trump’s IEEPA-based duties are illegal. Based on the US$133.5 billion in this category of tariff assessed by the US Customs and Border Protection Agency through Dec. 14, the total is likely approaching US$150 billion, based on Reuters calculations.
Bessent disputed this figure, saying it was “not the number,” for tariffs subject to possible refunds. He said there were revenues from tariffs provided under other authorities but did not provide a specific figure for IEEPA-based tariffs.
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