According to The Atlantic, a loss for Donald Trump in his ongoing Supreme Court legal battle over tariffs could compel the US government to repay "tens of billions of dollars" to companies that have paid import fees this year, along with interest. The longer the decision is postponed, the larger the sum could grow, potentially reaching $1 trillion.
For technology companies, both large and small, the stakes are exceptionally high. A ruling against Trump would not only allow these companies to recover duties paid on imports to the US, money they could then reinvest in their competitive capabilities. More importantly, in the long term, it would put an end to tariff volatility, which, as Matthew Allen, an economics lecturer, highlighted in The Conversation, threatened to affect "innovation itself." This volatility risked destabilizing global partnerships and supply chains in "tech-intensive, IP-led sectors like semiconductors and software."
Presently, the Supreme Court is considering two cases asserting that the US president lacks unilateral authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). Trump, defending his so-called "reciprocal tariffs," argued these measures were necessary to address the "emergency" of ongoing trade imbalances, which he claimed have unfairly enriched other nations while leaving the US "on the verge of a catastrophic decline."
While not everyone believes Trump will be unsuccessful, the odds of his victory fell from 50% to 25% in prediction markets following recent oral arguments, as reported by Forbes. This drop is attributed to Supreme Court justices appearing critical.
Several economists concur that Trump's tariffs are "odd." Dozens of leading economists seemingly impacted the justices' views. In a friend of the court brief, over 40 economists, public policy experts, and former government officials argued that Trump's rationale, claiming "sustained trade deficits" have "fostered dependency on foreign rivals and gutted American manufacturing," is fundamentally flawed.