President Donald Trump likes to boast about how much money the U.S. Treasury is raking in from the massive taxes—tariffs—he’s slapped this year on imports from almost every country in the world.
“We have trillions of dollars coming into our country,” Trump said Wednesday. “If we didn’t have tariffs, we would be a very poor nation and we would be taken advantage of by every other nation in the world, friend and foe.”
But two courts have now ruled that his biggest and boldest import taxes are illegal. If the Supreme Court agrees and strikes them down for good, the federal government could have to pay back many of the taxes it’s already collected from companies that import foreign products into the United States.
“We’re talking about hundreds of billions of dollars potentially in refunds affecting thousands and thousands of importers,” said trade lawyer Luis Arandia, a partner with the law firm of Barnes & Thornburg. “Unwinding all that will be the largest administrative effort in U.S. government history.’’
Ordinary Americans, who’ve had to pay higher prices on some products because of the tariffs, are unlikely to share in the windfall. Any refunds would go instead to the companies that paid the levies in the first place.
The refunds would also reverse the flow of tariff revenue the president has counted on to help pay for the massive tax-cut bill he signed July 4 and would threaten, he warns, to “literally destroy the United States of America.’’
At issue are revenues raised from tariffs Trump imposed this year by invoking the 1977 International Emergency Economic Powers Act (IEEPA). One set of IEEPA tariffs targeted almost every country on earth after he declared that the United States’ massive and persistent trade deficits amounted to a national emergency. Another was aimed at Canada, China and Mexico and was meant to counter the illegal flow of drugs and immigrants across U.S. borders.
But a…