Bessent says Treasury has cash to cover Trump tariff refunds

According to Treasury Secretary Scott Bessent, the U.S. Treasury has more than enough cash to refund businesses and consumers if the Supreme Court were to strike down President Trump’s emergency tariffs.

Still, he noted that the refunds wouldn’t be returned all at once, but instead would be rolled out over time, possibly over weeks or even a year. Currently, the U.S. Treasury has nearly $774 billion in cash on hand.

Bessent, however, does not expect the court to overturn the tariffs. He argued that if the court reverses the tariffs, businesses that transferred the costs to customers would only benefit immensely.

He commented, “It won’t be a problem if we have to do it, but ‍I can tell you that if it happens, which I don’t think it’s going to – it’s just a corporate boondoggle. Costco, which is suing the U.S. government, is going to give the money back to their clients?”

Bessent says most businesses did not pass on the tariff costs to consumers

Bessent also warned that if the court issues a mixed ruling, rather than a clear yes or no decision, it could make it more difficult to determine who is eligible for a refund and by how much they should be repaid. Previously, Morgan Stanley analysts had also projected that the court’s ruling could be far from clear-cut.

The Treasury Secretary also told reporters that most businesses absorbed the tariffs themselves, and hence, consumers saw little to no price increase. Moreover, he pushed back on claims that Trump’s tariffs drove inflation, affirming that goods inflation stayed lower than overall inflation.

Businesses and lawyers were expecting a Supreme Court decision on Friday, but the justices ruled on another case instead. 

The court has yet to say when it will issue a ruling on the dispute over Trump’s trade measures. However, Bessent believes that longer deliberations increase the likelihood that the court will support the president. Nonetheless, he insisted that the Treasury can still make repayments if the court rules otherwise. The government is projected to reduce its deficit in 2025 by about $300 to $400 billion, which would increase its financial capacity, Bessent said. For the fiscal year that ended Sept. 30, 2025, the U.S. ran a $1.775 trillion deficit.

Meanwhile, importers believe that collecting repayments on tariffs would be difficult if the Supreme Court were to rule against Trump’s IEEPA-based tariffs. Customs data showed that $133.5 billion has been collected through December 14, an estimate that is likely to reach $150 billion altogether. However, Bessent challenged the estimate, claiming it did not accurately reflect the number of tariffs that might qualify for refunds. He stated that tariffs collected under other laws also exist, although he did not provide a figure for those under IEEPA.

Torres cautioned that reversing tariffs under the emergency act could push rates higher

Some economists were deeply concerned about the possibility of repealing the tariffs. Jose Torres, a senior economist at Interactive Brokers, for example, explained that eliminating the tariffs would have serious consequences. 

He stated, “If the court blocks the tariffs, the administration is going to find workarounds. President Trump is very ambitious in getting this agenda through despite potential controversies that could surround such a decision.” Thus, he argued that cutting off tariffs would hurt onshoring and fiscal conditions, and push rates up. Still, it would boost corporate profits by lowering input costs and easing trade. The prediction market Kalshi currently assigns only a 30% chance that the court will uphold the tariffs as implemented.

Earlier, Bessent had also shared his concern that refunding tariffs could burden the administration and hinder efforts to reduce the fiscal deficit.