The Trump administration has cautioned that a reversal of President Donald Trump‘s tariffs could pose a threat to federal benefits such as Social Security and Medicare.
US Warns Court Tariff Reversal Could Trigger Trillions In Refunds
Solicitor General D. John Sauer and Assistant Attorney General Brett Shumate voiced this concern to a federal appellate court on Monday, according to a report by Axios on Tuesday. They suggested that if the U.S. were forced to refund trillions of dollars from deals not yet fully finalized, the nation could face severe economic repercussions.
Tariff deals with Japan, South Korea, and the EU include pledges for over $1 trillion in U.S. project investments.
The U.S. Court of Appeals for the Federal Circuit is expected to soon rule on whether to affirm or overturn the Court of International Trade's late-May decision that struck down most of Trump's tariffs. Sauer and Shumate's letter introduces fresh arguments in favor of keeping the tariffs in place.
The letter states, “If the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision took effect.” They also warned of potential job losses, forced evictions, and threats to Social Security and Medicare.
“….millions of jobs would be eliminated, hard-working Americans would lose their savings, and even Social Security and Medicare could be threatened.”
The letter from Sauer and Shumate suggests that while the Trump administration intends to introduce a new tariff program if the current one is struck down by the courts, the alternatives would be less effective — a point the administration has not acknowledged before.
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Trump Warns Tariff Overturn Could Trigger Depression
This warning comes after President Trump hinted at a potential economic fallout if his extensive tariff policy is overturned, suggesting a new Great Depression could be on the horizon. Trump’s concerns about a negative verdict on the tariff policy by a “Radical Left Court” and the difficulty the U.S. would face in recovering from such an economic setback.
Moreover, investment bank Piper Sandler has previously declared President Trump’s trade deals illegal, predicting a Supreme Court ruling against Trump by June 2026, reported Fortune. The bank’s analysis of ongoing court battles and legislative authority concluded that Trump’s reliance on the International Emergency Economic Powers Act (IEEPA) to impose wide-ranging tariffs and cut bilateral deals far exceeds the powers granted by Congress.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
