The US tariff policy is facing a “make-or-break” situation
The legality of the US tariff policy has once again been pushed to the forefront. On January 12th, US President Trump posted on his social media platform “The Truth Social” stating that if the US Supreme Court rules against the US on tariffs for any reason, the US will face compensation in the hundreds of billions of dollars. Trump said, “It will be a mess, and it will be almost impossible for our country to pay the costs. If the Supreme Court rules against the US on this national security wealth, we’re done.”
In August 2025, the United States Court of Appeals for the Federal Circuit ruled that the law invoked by Trump when approving tariffs on multiple countries did not grant him the authority to levy taxes. Trump refused to accept the ruling and announced that he would appeal to the Supreme Court. The U.S. Supreme Court had previously set January 9 as the date for issuing opinions, but did not announce specific cases. The market generally predicted that the tariff case would be among the rulings. However, on January 9, the U.S. Supreme Court stated that it would not make a ruling on the Trump administration’s tariff case that day. The U.S. Supreme Court also stated that the next day for issuing opinions would be January 14. The market speculated that the Supreme Court could make a ruling on the Trump tariff case as early as this Wednesday.
The legality of the new tariffs has been repeatedly questioned
In April 2025, the United States announced the implementation of a so-called “reciprocal tariff” policy towards all its trading partners, setting a “minimum base tariff” of 10%, and imposing higher tariffs on some trading partners, including the least developed countries.
According to the U.S. Constitution, the U.S. Congress determines tariff policies. However, the Trump administration has stated that it is invoking the U.S. International Emergency Economic Powers Act, passed in 1977, to implement comprehensive tariff policies. This act grants the president the authority to “regulate” imports in certain emergency situations. No U.S. president before Trump has imposed tariffs based on this act. There are doubts about whether the Trump administration’s “devious” approach is constitutional.
As a result, the US tariff policy has not only caused an uproar internationally but also encountered widespread skepticism within the US. Last year, US companies and 12 US states initiated lawsuits challenging the legality of the policy. Several US courts have also ruled that the Trump administration’s implementation of comprehensive tariff policies by invoking the law is illegal.
In October 2025, the United States Senate passed a resolution by a vote of 51 in favor and 47 against, demanding the cancellation of the “national emergency” invoked by the Trump administration when it introduced “reciprocal tariffs” in early April. Although this voting result is only symbolic, it indicates that an increasing number of U.S. lawmakers do not agree with the approach of reshaping U.S. foreign trade relations through aggressive tariff measures.
During the oral arguments on tariff policy held by the US Supreme Court in November last year, several judges posed “pointed” questions to the lawyers representing the Trump administration, questioning whether Trump could use the power granted by a 50-year-old act to defend his tariff policy, which they considered an expansion of executive power.
The ruling result is of great significance
Generally speaking, the rulings of the United States Supreme Court are the final decisions in a case, and must be followed by all levels of federal and state courts (including federal appellate courts, district courts, and state supreme courts), with no higher judicial authority able to overturn them. At the same time, they also bind the legislative and administrative actions of the federal Congress, the President, and the executive branch, as well as those of state governments.
Since last year, Trump has repeatedly warned that the impact would be “extremely destructive” if the US government loses the case in the Supreme Court. On January 12, Trump also stated that in the event of an unfavorable ruling, the US would face actual compensation amounting to hundreds of billions of dollars. This does not include the repayment amount required for the government and related companies to invest in building factories and equipment to avoid paying tariffs, which would total in the trillions of dollars.
U.S. Treasury Secretary Steven Mnuchin had previously stated that in the tariff case, if the Supreme Court upheld the previous ruling by the Federal Circuit Court that Trump’s order to impose tariffs on multiple countries was illegal, the Treasury Department would be forced to refund a huge amount of tariffs. “We will have to refund about half of the tariffs, which will be a bad situation for the Treasury Department,” he added. If the tariffs are lifted, “we can still take many other measures,” but he did not disclose more details.
