Treasury to Offer Rebates if Tariffs Declared Unlawful

The Treasury Department has announced that it will offer rebates if the Supreme Court upholds a ruling that President Donald Trump's "reciprocal" tariffs were an overstep of power. Treasury Secretary Scott Bessent said, "We would have to give a refund on about half the tariffs, which would be terrible for the Treasury." He added, "If the court says it, we'd have to do it."

Bessent also mentioned that there are "numerous other avenues" that can be taken on tariffs, though they would "diminish President Trump's negotiating position." National Economic Council Director Kevin Hassett suggested "other legal authorities" to implement tariffs if the Supreme Court does not rule in favor of the Trump administration. He pointed out Section 232 investigations as one option.

A federal appeals court ruled that Trump's "reciprocal" tariffs were among the imposed duties that breach the president's authority, saying that the International Emergency Economic Powers Act (IEEPA) does not authorize the emergency tariffs Trump imposed earlier this year. The court delayed implementation of its order until Oct. 14.

The ruling has put into question the Trump administration's ability to continue trade negotiations. Bessent said he is "confident" the Trump administration will win at the Supreme Court.

The impact of Trump's economic policies may slowly be revealing itself. The Bureau of Labor Statistics' August jobs report indicated that the US economy added about 22,000 jobs in August and the unemployment rate ticked up to 4.3% — the highest it's been in nearly four years.

Among the hardest-hit sectors are those in the goods business. The tariff policy, and the whipsaw manner in which it's being applied, have had an "undeniable" impact on hiring, RSM U.S. economist Joe Brusuelas wrote in a note to investors Friday.

Bessent said, "We can't snap our fingers and have factories built," adding that "we are going to see construction jobs and manufacturing jobs," in part due to the passage of the "One Big Beautiful Bill."

The Trump administration has touted that American companies should "eat" the additional costs of tariffs, in a denial that such duties are a tax on American consumers. However, Nike, Hasbro, and Walmart are among companies warning that tariffs would lead to price increases as the U.S. collects tariff revenue from imports.

The United States collected roughly $28 billion in customs duties in July, according to the Treasury Department's monthly statement. In April, the Treasury reported that it collected $16.8 billion in gross customs duties. In June, the Department of Homeland Security said U.S. Customs and Border Protection collected $81.5 billion from Trump's tariffs.