U.S. Secretary of Treasury Scott Bessent Rejects Tariff Refunds After Supreme Court Ruling
Treasury Secretary Scott Bessent has rejected the idea of refunding billions of dollars in tariffs struck down by the Supreme Court, calling potential repayments to corporations “the ultimate form of corporate welfare.”
Key Takeaways
- Scott Bessent rejects tariff refunds, calling them “corporate welfare” that would not help consumers.
- The Supreme Court of the United States struck down 2026 tariffs imposed under IEEPA, putting up to $175 billion in revenue in question.
- The administration plans to keep revenue steady by using Sections 122, 232, and 301 instead.
- The ruling makes President Donald Trump’s proposed $2,000 “tariff dividend” unlikely without new legislation.
His remarks came just hours after the high court ruled 6-3 against the administration’s use of the International Emergency Economic Powers Act to justify sweeping 2026 trade duties.
The February 20 decision from the Supreme Court of the United States invalidated tariffs imposed under IEEPA authority, throwing as much as $130 billion to $175 billion in collected revenue into legal uncertainty. While some business groups argue the funds should be returned, Bessent insists refunds would not reach consumers, claiming companies had already passed most of the costs along through higher prices.
How Much Is at Stake?
Estimates of the potential repayment vary sharply. The Treasury Department puts the figure near $130 billion, while independent models such as the Penn Wharton Budget Model suggest it could climb to $175 billion. Legal analysts warn that even if refunds are ordered, the process could drag on for years. The Supreme Court did not provide clear instructions on how the government should unwind the collections, leaving lower courts to sort out what Bessent described as a likely legal “mess.”
Administration’s Revenue Backup Plan
Despite the ruling, Bessent said 2026 tariff revenue will remain “virtually unchanged.” The White House is pivoting to alternative trade authorities that do not rely on IEEPA.
Under Section 122 of U.S. trade law, President Donald Trump has already authorized a new 10 percent global tariff. This mechanism, designed for balance-of-payments emergencies, allows duties to remain in place for 150 days without congressional approval.
The administration is also leaning on Section 232, which permits tariffs on national security grounds, and Section 301, commonly used to counter what the government defines as unfair trade practices. Officials acknowledge these paths are more complex and may offer less flexibility in negotiations with trading partners, but they argue the shift ensures revenue continuity.
What Happens to the $2,000 Tariff Dividend?
The ruling complicates the President’s earlier proposal for a $2,000 “tariff dividend” aimed at families earning under $100,000. With IEEPA-based revenues now in legal limbo, funding such payments appears far less certain. Bessent had previously floated the idea of delivering relief through tax deductions instead of direct checks, but analysts say any payout would now likely require new congressional legislation.
For now, the administration’s focus appears to be stabilizing trade revenue streams rather than reopening the door to large-scale refunds – signaling that the tariff fight may be entering a new legal phase rather than coming to an end.
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