Trump hinted in a post that he might lose the tariff case but already has a 'Plan B,' as his administration is preparing to use other legal means to maintain the tariffs. Meanwhile, to claim a potential refund exceeding $100 billion, a large number of U.S. companies, including Costco, have filed lawsuits to secure their rights before the tariff 'reckoning' deadline. Analysts believe that even if the tariffs are deemed illegal, the Supreme Court may not order a refund. U.S. officials have stated that a refund 'will not happen.'
As a key ruling by the U.S. Supreme Court approaches, Washington and the American business community are engaged in a complex game of strategy. The Trump administration appears to be quietly preparing a 'Plan B' to maintain its signature tariff policy, while businesses have rushed to take legal action to secure a share of potential refunds that could exceed $100 billion.
The latest development comes from former President Trump himself. According to recent media reports, Trump posted on Truth Social on Sunday (December 7) stating that even if the Supreme Court limits his authority, he still has 'other ways' to impose tariffs. This statement was interpreted by some market analysts as an indication that he is preparing for a potentially unfavorable ruling by the Supreme Court.
At the same time, actions taken by American businesses have been more direct. Retail giant $Costco (COST.US)$has joined a number of companies, including Revlon and Ray-Ban, in filing lawsuits against the Trump administration. The move aims to ensure that if the court rules the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as illegal, the company will be eligible for refunds on the tariffs already paid.
At the heart of this series of developments is the upcoming Supreme Court decision, which will determine whether the Trump administration has the authority to use emergency powers legislation to impose tariffs on a large scale. This case not only concerns the future direction of U.S. trade policy but also impacts the final allocation of up to $100 billion in tariff revenue, with a justice describing its potential consequences as possibly causing 'chaos.'
Government's 'Plan B': Tariffs May Continue
Despite facing legal challenges, the Trump administration has made it clear that it will continue to implement its tariff policy. Treasury Secretary Bessent revealed that he is preparing a 'Plan B' to address a possible unfavorable ruling by the Supreme Court.
According to reports, Bessent’s plan is to leverage other legal authorities to sustain the existing tariff structure. He stated, 'We can reconstruct the exact same tariff framework through Section 301, Section 232, and what I believe is called Section 122.' These provisions respectively pertain to unfair trade practices, national security threats, and balance-of-payments crises, providing the president with different trade action authorities.
Meanwhile, government officials have adopted a tough stance on the possibility of refunds. Bessent warned that ruling tariffs illegal might trigger 'massive refunds' for businesses, placing significant fiscal and administrative burdens on the Treasury Department. In an interview with the media, Commerce Secretary Lutnick bluntly stated that the scenario of businesses lining up for refunds 'will not happen,' emphasizing, 'Tariffs will exist regardless.'
Companies Rush to 'Line Up': Legal Action Is Urgently Needed
While the government is taking a tough stance, U.S. companies are scrambling through various legal avenues to safeguard their interests.
According to Yahoo Finance, the core driver of corporate actions is the approaching deadline for 'liquidation.' In trade terminology, 'liquidation' refers to the final calculation and confirmation of tariffs due on imported goods. This process is typically completed 10 to 11 months after the imposition of duties. Companies fear that once tariffs are 'liquidated,' it will become significantly more difficult to apply for refunds in the future.
To this end, leading companies represented by $Costco (COST.US)$have chosen to file a lawsuit directly, requesting the court to block the liquidation of their paid tariffs in order to “ensure that their right to a full refund is not compromised.”
Meanwhile, other companies, particularly smaller enterprises, tend to submit formal 'protest' documents to U.S. Customs and Border Protection.
International trade lawyer Ted Murphy has reminded clients that refunds will 'almost certainly not be automatic,' and importers should take steps now to protect their rights.
Market Interpretation: Losing in Court but No Tariff Refunds?
Beyond official statements and corporate actions, market analysts are attempting to interpret the possible outcomes of this game. A widely discussed viewpoint suggests that the ultimate result may involve the Trump administration losing in court, but companies still failing to recover refunds.
Jim Bianco of Bianco Research analyzed on social platform X that he expects the Supreme Court to rule that imposing tariffs via IEEPA was illegal, but at the same time, the court might refrain from ordering the refund of approximately $167 billion in collected tariffs to avoid 'potentially destabilizing the economy.' He believes the court may leave the issue of refunds to Congress to handle.
This perspective is supported by an amicus curiae brief from the America First Policy Institute (AFPI). The brief argues that the president possesses broad authority under the Tariff Act of 1930 to impose sanctions or penalties on actors deemed harmful to U.S. interests, and courts are generally reluctant to interfere with presidential powers in this domain. This implies that even if the IEEPA pathway is blocked, the government could still reimpose similar tariff measures under the guise of 'sanctions.'
Uncertain Prospects and a Hardline Stance
Currently, all parties are preparing for various possibilities, and the outlook for the entire matter is filled with uncertainty. Justice Amy Coney Barrett of the Supreme Court openly remarked during the November hearing that the potential refund process “looks to me like it could be a mess.”
Neal Katyal, the attorney representing the corporate side, also acknowledged that the refund process would be “very challenging” and suggested that companies other than those filing lawsuits might need to take action, such as submitting administrative protests.
Overall, investors and businesses are facing a complex situation: on one hand, the Supreme Court’s ruling may pave the way for substantial refunds; on the other hand, the Trump administration has made it clear that it will “spare no effort” to prevent refunds and has prepared alternative measures to maintain tariffs. As trade lawyer Erik Smithweiss put it, “We expect the (government’s) response to be ‘fight hard, and don’t give back a penny unless a judge tells you absolutely that you must.’”
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