The Supreme Court’s decision to overturn a big chunk of President Donald Trump’s tariff policy sparked concerns about how he will deal with domestic budgeting and international dealmaking.
Tariffs had been projected to generate $2.5 trillion over the next decade. The loss of the portion of the tariffs the court ruled unlawful leaves a gaping hole in Trump’s spending priorities and deficit reduction.
Trump also has argued that the tariffs gave him enormous leverage to negotiate with foreign leaders and companies over trade, immigration, drug enforcement and military conflicts.
“WE’RE SCREWED!” if the high court overturns the tariffs, Trump said on social media Jan. 12.
Trump had warned in a social media post before the high court’s argument in November that the country would face an “economic disaster” unless the tariffs remained in place and called the case a matter of “LIFE OR DEATH.”
Here are four issues to watch in the wake of the Supreme Court ruling.
Trump could impose tariffs under different laws
Treasury Secretary Scott Bessent had said the administration could impose tariffs under other statutes if the Supreme Court were to overturn the tariffs under the 1977 International Emergency Economic Powers Act.
But Trump has argued that none of the other options are as easy for him to impose or wield as a threat.
The administration has expanded tariffs on steel and aluminum and imposed tariffs on cars and parts under section 232 of the 1962 Trade Expansion Act. This law authorizes the president to impose tariffs if the Commerce Department secretary determines a product “is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.”
Bessent has said tariffs also could be imposed to remedy unfair trade practices under two sections of the 1974 Trade Act. One section authorizes tariffs up to 15% for 150 days if a country has a large trade surplus, among other reasons. Another section covers “practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce.”
The administration has already held hearings on whether China’s policies governing semiconductors warrant tariffs. Trump has directed the U.S. trade representative to study whether taxes on digital services imposed by Austria, Canada, France, Italy, Spain, Turkey and the United Kingdom warrant tariffs.
Refunds ‘may take over a year,’ Bessent says
Even before the high court’s decision, thousands of importers, including Costco, Revlon and Goodyear, filed lawsuits at the U.S. Court of International Trade seeking refunds of an estimated $150 billion they paid in tariffs.
But Trump administration officials said the companies would receive refunds without the need for litigation if the Supreme Court ruled the tariffs had been collected unlawfully.
The Committee for a Responsible Federal Budget estimated in October that roughly $90 billion of the $195 billion collected in tariffs during the first year of Trump’s term could be refunded, based on Customs and Border Protection figures. The government is collecting more than $30 billion a month in customs duties, according to Treasury statements.
Bessent told Reuters Jan. 9 that the administration has enough money to refund tariffs, but repayments would be spread out over weeks or even a year. The treasury had nearly $774 billion on hand on Jan. 8.
“We’re not talking about the money all goes out in a day,” Bessent said. “Probably over weeks, months, may take over a year, right?”
Supreme Court decision could cost trillions to federal budget
The tariffs were projected to raise a significant amount for Trump’s spending priorities and for deficit reduction.
The nonpartisan Congressional Budget Office, or CBO, projected in November that overall tariffs would generate $2.5 trillion over the next decade. By reducing the need for more borrowing, the tariffs also were projected to reduce interest payments on the national debt by $500 billion.
Trump’s emergency tariffs accounted for a significant portion of that revenue. Lawmakers use the CBO as part of their calculations about how much to spend each year. A reduction in tariffs means less revenue is available to spend.
“With today’s Supreme Court ruling affirming the illegality of President Trump’s emergency tariffs, the country will now be about $2 trillion deeper in the hole,” said Maya MacGuineas, president of the advocacy group Committee for a Responsible Federal Budget. “We are in a dismal fiscal situation, and it just got worse.”
The rates of tariffs subject to the Supreme Court decision fluctuated during the year. But the Committee for a Responsible Federal Budget, an advocacy group, estimated in October that $90 billion of the overall tariffs collected during the first year of Trump’s term could be refunded, based on Customs and Border Protection figures.
The average American family paid nearly $1,700 in tariff costs since Trump took office, according to Democrats on the congressional Joint Economic Committee. Americans paid an estimated $231 billion in tariffs from February 2025 through January 2026, the committee found.
“President Trump’s tariffs have been a disaster for American families, driving costs up at the worst possible time,” Sen. Maggie Hassan of New Hampshire, the top Democrat on the committee, said in a statement Feb. 20. “While the Supreme Court has thankfully and correctly ruled that much of Trump’s tariff agenda was an illegal exercise of presidential power, today’s ruling cannot undo the damage that tariffs have already caused.”
How will other countries, which condemned the tariffs, react?
Foreign leaders reacted warily to the decision because the Trump administration could impose tariffs in ways other than by declaring emergencies. One statute permits tariffs on imports that threaten national security and another would allow retaliatory tariffs against countries that send the United States more goods than they import.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said the decision was a legal ruling, not a reset of U.S. trade policy.
“Canada should prepare for new, blunter mechanisms to be used to reassert trade pressure, potentially with broader and more disruptive effects,” Laing said in a statement.
William Bain, head of trade policy at the British Chambers of Commerce, said different legislation was used to impose U.S. tariffs on steel and aluminum.
“While this decision gives clarity on the President’s executive powers to raise tariffs it does little to clear the murky waters for business,” Bain said in a statement.
Leaders of other countries condemned the tariffs when Trump announced them before negotiating new trade deals to blunt the impact of the additional duties. Chinese tariffs severely limited its agricultural imports, such as U.S. soybeans, before reaching an armistice. Trump announced $12 billion in farm assistance. Canada continues to negotiate.
Trump warned of “payback” in a social media post Jan. 12 from countries and companies that would abandon trillions in U.S. investment in factories and equipment without the threat of tariffs.
This article originally appeared on USA TODAY: 4 issues to watch after Supreme Court ruling overturns Trump tariffs
Reporting by Bart Jansen, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect