If former President Donald Trump loses his battle in the Supreme Court over tariffs, the United States might be required to pay back “tens of billions of dollars to companies that have paid import fees this year, plus interest,” according to a report by The Atlantic. Delays in the verdict could see these refunds escalating, potentially reaching up to $1 trillion.
This situation holds significant implications for both large and small tech companies. A defeat for Trump would not only allow companies to reclaim duties paid on imports into the US that could otherwise enhance their competitive edge. More crucially, it would put an end to tariff disruptions that, as noted by economics lecturer Matthew Allen in an article for The Conversation, could harm “innovation itself” by affecting global partnerships and diverse supply chains in “tech-intensive, IP-led sectors like semiconductors and software.”
At present, the Supreme Court is considering two cases that question whether the US president can impose tariffs unilaterally under the International Emergency Economic Powers Act (IEEPA). Trump has defended his system of “reciprocal tariffs,” asserting that these taxes were essential to address the “emergency” posed by ongoing trade imbalances which he claimed have unjustly benefited other countries and brought the US “to the brink of catastrophic decline.”
Despite expectations, not everyone is convinced that Trump will be unsuccessful. However, after last week's oral arguments, prediction markets adjusted Trump’s chances of winning from 50 to 25 percent, as reported by Forbes, following indications of skepticism from the Supreme Court justices.
The views of the justices may have been influenced by input from dozens of top economists. In one amicus brief, more than 40 economists, policy researchers, and former government officials argued that Trump’s assertions are misguided and that “sustained trade deficits” do not “foster dependency on foreign rivals” nor do they “gut American manufacturing.”