CRFB Reacts to Supreme Court Tariff Ruling

The Supreme Court has upheld lower court decisions in striking down a wide swath of President Trump’s tariffs on grounds that he exceeded his legal authority in imposing them.  

The court ruled that the International Emergency Economic Power Act (IEEPA) does not authorize the President to impose tariffs. Our preliminary estimate suggests that, absent alternative executive or legislative action to replace the tariffs, this ruling could increase projected deficits by about $2 trillion over the next decade. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

With today’s Supreme Court ruling affirming the illegality of President Trump’s emergency tariffs, the country will now be about $2 trillion deeper in the hole. With the national debt already the size of the entire U.S. economy and interest on the debt costing more than $1 trillion this year, this is very bad news. Congress should work quickly to fill that hole.

Whatever one feels about the tariffs themselves, the country needs that $2 trillion in fiscal improvements, all of which should be dedicated to deficit reduction. Congress should work to quickly replace at least that amount – whether through a border adjusted cash flow tax, cuts to tax breaks, or spending reductions. There is no shortage of options.

We are in a dismal fiscal situation, and it just got worse. More than ever, we need Washington to put forward an agenda to truly address the debt. That means cutting spending, raising revenue, lowering health care costs, and securing our trust funds.

Relying on legally questionable sources of revenue was clearly less than ideal. It’s Congress that needs to get our debt under control. 

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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.