Treasury would face "terrible" tariff refund hit on SCOTUS loss, Bessent says

Catch up quick: Two courts have ruled Trump lacked the authority to impose most of the tariffs he's put in place. The government has requested that the Supreme Court hear an appeal as early as November.

• Economists estimate about 71% of Trump's tariff revenue would be subject to that ruling, or more than $70 billion already this calendar year.

What they're saying: "So we would have to give a refund on about half the tariffs, which would be terrible for the Treasury," Bessent told NBC's "Meet the Press" anchor Kristen Welker in an interview.

• Asked if the government was prepared to issue those refunds, Bessent said "well, I mean, there's no 'be prepared.' If the court says it, we'd have to do it."

Bessent said he was confident the government would not lose the case, but added that "there are numerous other avenues that we can take" if this particular set of tariffs is struck down.

• Those other avenues would "diminish President Trump's negotiating position," though, Bessent added.

Follow the money: After an appellate court ruled Aug. 29 that Trump didn't have the authority under the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs, bond investors began pricing in the possibility the government might have to issue substantially more debt to pay refunds.

• As TD Cowen's Washington Strategy team noted on Sept. 3, the tariff revenue is key to supporting the government's credit rating, given the fiscal pressures of Trump's tax legislation.

The bottom line: After Trump warned that a Supreme Court loss would "literally destroy" the country, and top adviser Peter Navarro said a loss could "end the United States," Bessent is taking a slightly less apocalyptic, but still sobering, view of the risks.