Bessent: ‘No one should expect’ tariff revenue to decline

• Key insight: Treasury Secretary Scott Bessent said the Supreme Court limited the administration’s tariff authority under the International Emergency Economic Powers Act, but that other laws could give the administration the same powers.
• Supporting data: The Penn-Wharton Budget Model has estimated that the court’s rejection of the IEEPA tariffs could result in as much as $175 billion in refunds for businesses.
• Forward look: Trump announced Friday he is imposing a 10% global tariff rate while the administration mulls its options. 

Just hours after the Supreme Court’s 6-3 decision Friday to strike down President Trump’s “Liberation Day” tariffs, Treasury Secretary Scott Bessent argued that the court did not invalidate tariffs, while also outlining alternative legal avenues to maintain tariffs now that the court had ruled.

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Bessent, speaking to a crowd at the Economic Club of Dallas Friday afternoon, committed to getting creative in order to keep tariffs at levels near where the administration has had them since April 2, 2025 — a day President Trump dubbed “Liberation Day.”

“The total amount of revenue that the Treasury will collect this year will be little changed,” Bessent said. “No one should expect that the tariff revenue will go down. I did not change a single word in my speech post-the ruling.”

Bessent quibbled with public reports of the scope of the Supreme Court’s decision. 

“Despite the misplaced gloating from Democrats, ill-informed media outlets, and the very people who gutted our industrial base, the court did not rule against President Trump’s tariffs,” Bessent said. “Six justices simply ruled that IEEPA authorities cannot be used to raise even one dollar of revenue.”

President Trump expressed anger with the court’s decision to rule against tariffs on social media following the decision, saying that “other alternatives will now be used to replace the ones that the Court incorrectly rejected.”

“It is my opinion that the Court has been swayed by Foreign Interests, and a Political Movement that is far smaller than people would think — But obnoxious, ignorant, and loud,” Trump wrote. “This was an important case to me. … The Good News (sic) is that there are methods, practices, Statutes, and other Authorities, as recognized by the entire Court and Congress, that are even stronger than the IEEPA TARIFFS, available to me as President of the United States of America.”

In an interview with CNBC in November, Bessent cited Section 232 of the Trade Expansion Act and Section 301 of the Trade Act as possible avenues, but admitted these were “more cumbersome” strategies. 

Bessent laid out how the administration would pivot in response to the decision, saying that the administration has “multiple tools in its toolbox” to uphold trade policy. These include Section 232 of the Trade Expansion Act and Section 301 of the Trade Act, which, according to him, “have withstood more than 4,000 lawsuits since the first Trump term.” 

Bessent also cited Section 122 of the Trade Act, saying it “grants the president five months … to put a global tariff on.” 

“The President announced today he’s going to put a global tariff of 10%,” Bessent said. “And then the number of [Section] 232 and Section 301, tariff investigations will be started [,t]hose take a number of weeks and months to implement.”

Bessent said that the Treasury estimates leveraging these authorities should allow tariff revenue to remain unchanged, indicating the administration has no plans to back down from its tariff plans.

According to the New York Times, as a hedge fund manager in 2004, Bessent warned investors that “tariffs are inflationary.”

Bessent denied making such a statement at a recent hearing in the House Financial Services Committee and dismissed reporting to the contrary, expressing skepticism about the accuracy of the claim due to the outlet that reported it.

The Penn-Wharton Budget Model has estimated that the court’s rejection of the IEEPA tariffs could create up to $175 billion in refunds for businesses and that tariff revenue could fall by 50% unless replaced with another strategy. 

Bessent said the question of whether companies can claim refunds was not dealt with by the Supreme Court and that the matter is now being sent to the Court of International Trade. 

“It’s in dispute,” Bessent said. “[The Supreme Court] pushed it back down to the International Tax and Trade court, and my sense is that it could be dragged out for weeks, months, years. So we’ll see what happens there.”