SCOTUS Skeptical of Trump Tariffs; Treasury May Not Have $90B to Refund Illegally Taxed Importers

King Don is going to lose his case for tariffs. At least that’s what it sounded like at the Supreme Court yesterday, where even the conservative judges had trouble seeing where the Constitution, which gives Congress exclusive power to tax, and the International Emergency Economic Powers Act, which doesn’t mention King Don’s favorite word, empower the Executive Branch to levy taxes:

Representing the Trump administration, U.S. Solicitor General D. John Sauer… faced a barrage of questions from the court’s liberal justices. Justice Elena Kagan, for example, emphasized that Congress – not the president – had “the power to impose taxes, the power to regulate foreign commerce.” Justice Ketanji Brown Jackson pointed to what she described as the purpose of IEEPA, noting that the law “was designed and intended to limit presidential authority, that Congress was concerned about how presidents had been using the authority under the predecessor statute,” the Trading with the Enemy Act.

Additional skepticism came from Justice Neil Gorsuch, who raised two related objections to the powers that Trump is claiming. Gorsuch asked Sauer, on Trump’s theory, “what would prohibit Congress from just abdicating all responsibility to regulate foreign commerce, for that matter, [or] declare war to the President?” And a few minutes later, Gorsuch suggested that one problem with reading a law like IEEPA to give the president broad powers would be that it would create a “one-way ratchet toward the gradual but continual accretion of power in the executive branch” because, once the president had such powers, he could veto any effort by Congress to take them back.

Some of the other conservative justices joined Gorsuch in voicing skepticism. Chief Justice John Roberts, for example, suggested that Trump’s claim of power under IEEPA might violate the “major questions” doctrine – the idea that if Congress wants to grant power to make decisions of vast economic or political significance it must say so clearly. “The justification,” Roberts said, “is being used for a power to impose tariffs on any product from any country, in any amount for any length of time.”

Justice Amy Coney Barrett asked Sauer to point to other places in federal law where Congress used the phrase “regulate … importation” to give the president the power to impose tariffs. But she was also skeptical at times of the challengers’ arguments. Along with Justice Brett Kavanaugh, she pressed Benjamin Gutman, the solicitor general of Oregon, who represented the group of 12 states, about whether IEEPA on the one hand could give the president very broad powers – for example, allowing him to shut down all trade with another country – but on the other hand would not allow him to take the much smaller step, in her view, of imposing tariffs. Such a paradox, Kavanaugh suggested, created an “odd donut hole” in IEEPA [Amy Howe, “Court Appears Dubious of Trump’s Tariffs,” SCOTUSblog, 2025.11.05].

If the Court rules against the Trump tariffs, the federal government will have to refund $90 billion that, amazingly, it may have already let slip from its pockets:

“The Treasury likely doesn’t have that type of money on hand,” said Lawrence Gillum, chief fixed income strategist at LPL Financial.

He said the government would likely raise that money by auctioning off short-term bonds.

“And then, you’d have to have market participants buy those treasuries, and kind of satisfy that new supply in the market,” Gillum said.

And demand for those bonds isn’t guaranteed.

“There’s been times where these auctions haven’t been great,” Gillum said. “And there’s been times when these auctions have been really great. So, it’s kind of hard to say, definitively, that this will go well.”

And if it doesn’t, the interest the government pays could rise [Justin Ho, “How Would $90 Billion in Tariffs Be Refunded If the Supreme Court Rules Against Trump?” Marketplace, 2025.11.05].

Maybe a court order is in order: the justices should issue a restraining order to require the government to lockbox all tariff revenue until the court can decide if those tariffs are legal. And if the Supremes rule in alignment with yesterday’s obvious skepticism, the feds should be required to refund those ill-gotten gains with the same alacrity they expected importers to show in paying them.