The group is the one managing the infamous Penn Wharton Budget Model (PWBM), which provides fiscal budget projections and economic analysis of major US legislation without advocacy. And by their estimates, the US could owe over $175 billion in tariff refunds should the Supreme Court rule against Trump’s broad emergency tariffs.
As a reminder, the Supreme Court will be rendering opinions and decisions later today. And that means a ruling on Trump’s tariffs could be on the agenda. There will not be any confirmation of that of course in the lead up to what is announced on decision days. So, just take note of that.
After the one today, there will be more decision days next week on 24 and 25 February. As an added reminder, the court has until June to make a decision. But given the importance and weight of Trump’s tariffs, it is expected that they might announce a verdict sooner rather than later.
Circling back to the PWBM estimate of over $175 billion, that is nothing to scoff at. That amount itself will exceed the total 2025 fiscal outlays from the Department of Transportation (~$128 billion) and Department of Justice (~$45 billion) combined.
And that will also eat heavily into tariffs revenue, in which the Congressional Budget Office estimates at about $300 billion annually over the next decade.
Now, I just want to say that the whole process of “refunding” is not going to be an easy task. In fact, there are going to be a lot of complications not just from a monetary perspective but from a legal one. Some food for thought:
- Who deserves to get paid first in terms of refunds? What is the order of any payout?
- Do consumers and retailers deserve a clawback too? That especially since tariffs have clearly passed through to them.
- What happens to the federal budget in just taking out the $175 billion now?
- And what if the US administration decides to offer “duty credits” instead of paying the full amount out?
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