Revenue from President Donald Trump’s tariffs jumped in August. However, a recent court setback for the White House has raised the prospect that some of the money may have to be paid back.
Treasury Department figures show the U.S. collected $30 billion in tariff revenue in August, bringing the year-to-date total to $165 billion.
By contrast, August 2024 yielded $7 billion, with $70 billion gathered over the same period a year earlier. That puts the increase in tariff receipts this year at $95 billion. The gains could be temporary, however, if courts ultimately rule the approach unlawful and order refunds.
Earlier this month, a federal appeals court found that Trump lacked authority to use the International Economic Emergency Powers Act to impose the duties at issue. The administration is appealing, sending the dispute to the Supreme Court.
“We would have to give a refund on about half the tariffs, which would be terrible for the treasury,” Treasury Secretary Scott Bessent said on NBC’s “Meet the Press.” In a court filing, Bessent said between $750 billion and $1 trillion in tariffs could be collected by June 2026, which is when the Supreme Court is expected to issue its ruling. The justices agreed to fast-track the case, with arguments set for November.
Court loss may not end tariffs completely
Even if the court sides against the administration, the tariffs might not vanish, according to Jeff Buchbinder, chief equity strategist at LPL Financial.
He wrote that the White House has other legal routes it could use to re-establish duties. Whether previously collected tariff revenue would have to be paid back remains unresolved. “Regardless of how the highest U.S. court rules, expect most of the current tariffs to remain in place,” Buchbinder wrote.
Not every tariff is at stake in the case.
At issue are the “reciprocal tariffs” on a range of partners and the fentanyl-related duties on Canada, China, and Mexico. Sector-specific tariffs on items such as foreign cars, steel, and copper are outside the lawsuit because they rest on a different legal basis and remain in force.
The economic backdrop has grown more complicated. U.S. consumer prices rose in August by the most in seven months, driven by housing and food, Labor Department data showed Thursday. At the same time, a surge in first-time applications for jobless benefits last week left the Federal Reserve on track to cut interest rates next Wednesday.
Together, firmer inflation and a softer job market have revived stagflation worries and complicate the Fed’s choices after Wednesday’s meeting. Trump has also said recently that the U.S would be “completely destroyed” without tariff money, as reported by Cryptopolitan.
Tariffs and travel drive up prices
Part of the price pressure reflects companies passing along higher costs tied to Trump’s broad tariffs, alongside a rebound in demand for travel. Visitor numbers to the United States slumped in the spring and early summer amid boycotts and the administration’s immigration crackdown before turning higher.
The Consumer Price Index increased 0.4% in August after a 0.2% rise in July, the largest monthly gain since January, the Bureau of Labor Statistics said.
Housing costs rose 0.4%. Food prices went up 0.5%, with supermarket prices up 0.6%. Fruits and vegetables saw the biggest rise at 1.6%. Tomato prices jumped 4.5%, the highest since January 2020.
Beef rose 2.7% in the month and stood 13.9% higher than a year earlier. Coffee was up 3.6% for the month and 20.9% from a year earlier. Tariffs likely contributed to some of these increases, while past droughts that reduced the national cattle herd probably helped push beef higher.
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Source: https://www.cryptopolitan.com/scotus-ruling-could-cost-trump-95b-gained-in-tariff-revenue/
