Bessent says US Treasury can easily cover any tariff refunds

SAVAGE, Minnesota: The U.S. Treasury has more than adequate funds to pay any tariff refunds ordered if the Supreme Court rules against President Donald Trump's emergency tariffs, but any repayments would be spread out over weeks or even a year, U.S. Treasury Secretary Scott Bessent told Reuters on Friday.

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Supreme Court has yet to rule on Trump's tariffs under IEEPA, leaving importers uncertain about potential refunds worth billions.
Bessent doubts a ruling against tariffs, warning refunds could become a corporate windfall and complicate repayment to consumers.
Treasury has ample cash to cover refunds if required, but timing and complexity could stretch over months or years.

Bessent said in an interview that he still doubted that the court would rule against Trump's tariffs, but he believed that any refunds would be a corporate boondoggle for companies that passed on added costs to their customers.

He added that any negative ruling may not be a simple yes-or-no result, but something more nuanced that could complicate the refund process.

"It won't be a problem if we have to do it, but I can tell you that if it happens - which I don't think it's going to - it's just a corporate boondoggle," Bessent said. "Costco, who's suing the U.S. government, are they going to give the money back to their clients?"

Bessent said companies generally, however, were not passing tariffs on to consumers, saying there was "very, very little, if any, pass-through," and disputed that Trump's tariffs contributed to inflation. He said goods inflation had been below headline inflation.

Importers and trade lawyers had anticipated a Supreme Court ruling on Friday but the court instead issued a ruling on a different matter. It remains unclear when the court will rule on the tariff case, which challenges President Donald Trump's use of the International Emergency Economic Powers Act to impose broad tariffs on nearly every U.S. trading partner.

Bessent said he believed that the longer the tariff decision is delayed, the more likely it is that the Supreme Court rules in Trump's favor.

CASH ON HAND

With cash on hand of nearly US$774 billion as of Thursday, the Treasury has more than enough funds to cover any refunds. The Treasury's borrowing estimates for January-March 2026 project an end-March cash balance of about US$850 billion.

"We're not talking about the money all goes out in a day. Probably over weeks, months, may take over a year, right?" he said.

Bessent also said he expects Treasury budget data for the calendar year 2025 to show a deficit reduction of US$300 billion to $400 billion from calendar 2024, providing additional capacity. The government operates on a fiscal-year basis, reporting a deficit of US$1.775 trillion for fiscal 2025, which ended on September 30.

Importers have said they expect difficulty in recouping any tariffs paid if the Supreme Court finds that Trump's IEEPA-based duties are illegal. Based on the US$133.5 billion in this category of tariff assessed by the Customs and Border Protection Agency through December 14, the total is likely now approaching US$150 billion, based on Reuters calculations.

Bessent disputed this total, saying it was "not the number," for tariffs subject to potential refunds. He said there were revenues from tariffs provided under other legal authorities but did not provide a specific figure for IEEPA-based tariffs.