Those hoping for a Christmas miracle when it comes to a Supreme Court ruling on U.S. President Donald Trump’s “reciprocal” tariffs may be out of luck, according to Treasury Secretary Scott Bessent.
The president’s chief economic adviser told Fox Business on Tuesday that he believes the nation is likely to see the high court hand down a decision on the fate of the International Emergency Economic Powers Act duties “in early January,” not sooner. “We’ve got to move at the right pace,” he said.
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Bessent pointed to the tariffs as an unparalleled source of negotiating power and leverage for Trump. “When China attempted to put an export control on rare earth magnets, President Trump said he’d put on 100 percent tariffs, and they immediately came to the table,” he said. “We are rebalancing trade, and this year, for the calendar year, we are going to shrink the deficit by several hundred billion dollars.”
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Bessent continued to lobby on behalf of the tariffs as a tool to promote America’s national security. “Economic security is national security,” he added, pointing to the pandemic as an example of the outcome of a depleted U.S. supply chain.
“What we saw during COVID was…that these long supply chains were not safe, sound and robust supply chains,” he said. “President Trump is using the IEEPA tariffs to fortify our supply chains through investment deals with countries and companies aimed at generating business for U.S. industry,” he added.
Asked whether the administration can and will pursue other trade measures should the tariffs be struck down, Bessent said “there are plenty of revenue alternatives, but they’re not the national security alternatives.”
During a webinar held by WWD’s sister publication Sourcing Journal on Tuesday titled “Tracking Tariffs: Data and Policy Updates,” Nicole Bivens Collinson, managing principal of the operating committee at Sandler, Travis & Rosenberg, P.A.’s International Trade and Government Relations division, agreed that the ruling will come about sometime in the new year.
“I will tell you that, for the most part, the Supreme Court justices are checked out for the rest of the year,” she said, but Jan. 9 has been scheduled as the first day they will begin to announce decisions on some of the expedited cases heard in 2025.
While Collinson said the prevailing view among The District’s talking heads is that the decision will be released swiftly, she believes it may come later in 2026, before the Supreme Court recess in June.
The decision, whenever it comes, will set in motion a series of subsequent actions and consequences for the federal government and for importers that have been paying the tariffs, she believes.
“They could either rule that the tariffs imposed under the IEEPA are legal; that’s it, full stop, done. No more remedy, everybody’s paying the tariffs,” she said. “They could also rule that the tariffs under IEEPA are illegal,” which Collinson believes is the likely outcome given that the New York-based Court of International Trade came to that conclusion already, along with the Washington, D.C.-based Court of Appeals for the Federal Circuit that subsequently heard the case.
“It’s very probable that the Supreme Court is going to agree with the other 11 judges who have already determined that this is illegal to impose tariffs,” Collinson said.
But it’s not up to the justices to determine the outcome of that decision. “They’re not going to talk about refunds, or how you get a refund, or when you get a refund, or who gives the refund. None of that is going to be discussed. That’s what they’re going to punt down to the Court of Appeals for the Federal Circuit,” she said.
Notably, the last time the CAFC determined the tariffs were illegal, they remanded the decision to the CIT, which originally ruled that Customs and Border Protection must stop collecting tariffs within 10 days and generate refunds.
That may not be possible now, as the CBP began liquidating the first of the IEEPA duties it collected this year on Monday, 314 days after the first tariffed entries made their way into the U.S.
The processing of the tariff payments may make refunds more complicated moving forward, many businesses, including Costco, believe — and they challenged the matter in the CIT. Dozens of corporate plaintiffs sought an injunction against CBP that would immediately stop the agency from liquidating the tariff revenue. The CIT on Monday sided with the government, however, saying that the liquidation of duties now won’t invalidate CBP’s responsibility to refund duties in the event that they are deemed unlawful.
If that happens, Collinson said, “I don’t believe that Customs is going to make it an easy thing — although I believe in my heart they absolutely could, because they know every single entry, every importer, every amount of duty that was paid according to the tariff classification number that was used, and it could be done with the flip of a switch.…”
“It could be done, but I don’t believe they’re going to do that,” she added. “I believe they’re going to try to make it as difficult as possible for importers, to try to stretch out the amount of time before they get their money back.”