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The president has crowed about the billions of dollars collected so far from tariffs. That money could be at risk if the White House loses the legal battle.
Aug. 13, 2025, 1:00 p.m. ET
The Trump administration’s top lawyers urged a federal court this week to uphold its sweeping global tariffs or risk “financial ruin,” warning that the United States could slip into an economic depression if an adverse ruling forces the government to refund billions of dollars in duties.
While experts broadly disputed that a losing verdict would trigger a calamity of that magnitude, many said the government’s extraordinary assertions underscored the risks looming over President Trump, who has widened the scope of his punishing trade war even while its legal basis remains unsettled.
At the heart of the wrangling is a 1977 law that empowers the president to impose trade embargoes and sanctions in response to economic emergencies. The word tariff appears nowhere in that statute, but Mr. Trump has nonetheless invoked its powers as the basis for his withering levies, including the steep taxes he imposed on imports from more than 90 countries on Aug. 7.
For Mr. Trump, the worst-case scenario would be a resounding defeat at the hands of the Supreme Court, which is likely to take up one of the pending cases. If the justices rule overwhelmingly against the president, the decision could halt tariff collections while triggering “a significant wave of claims” from businesses demanding refunds, said Andrew Morris, a senior litigation counsel at the New Civil Liberties Alliance. The legal group has represented businesses in tariff lawsuits.
The mechanics of that process — from how it would work, to whom would be eligible to reclaim the money — would depend on the scope of any court decision. Still, a loss could undercut one of Mr. Trump’s primary reasons for imposing tariffs in the first place, choking off a source of revenue that the president says is already making America “rich.”
The prospect has spooked Mr. Trump, who took to social media last week to warn it would be “impossible to ever recover, or pay back, these massive sums of money,” if a court ruled against him, adding that a loss could trigger a “GREAT DEPRESSION!”
