JPMorgan has warned about potential economic challenges following the Supreme Court’s recently announced decision to overturn President Donald Trump’s emergency tariffs. They suggest that the U.S. government might be obligated to refund businesses an amount that could reach up to $200 billion.
Michael Feroli, a leading economist at the bank, highlighted that even though officials from the Trump administration intend to explore other legislative avenues to reintroduce the tariffs, the ruling might still contribute to increased trade uncertainty and affect business expenditures negatively.
“The court’s decision has sent the matter back to a lower court, so we can’t precisely gauge the total amount or timing of any potential refunds,” Feroli stated.
He referenced data from U.S. Customs and Border Protection, estimating that the stakes are somewhere between $150 billion and $200 billion in a message sent to clients.
Many sizable corporations had already initiated lawsuits before the Supreme Court’s ruling in hopes of reclaiming tariffs paid.
Among these are major retailers like Costco, the clothing line J.Crew, footwear brands Crocs and Goodyear, and the multinational EssilorLuxottica, which owns Ray-Ban and Oakley.
Latest Updates on Trump’s Tariffs Post-Supreme Court Ruling:
The publication has reached out to the five mentioned companies and the Treasury Department for their insights.
JPMorgan further forecasts that legal decisions requiring the government to return tariff payments and the accompanying market disruptions could lead to an expanded budget deficit by 2026.
This deficit would represent around 6.6% of GDP—approximately $2.1 trillion—reflecting a notable increase of 0.5 percentage points based on current economic metrics.
When a government spends more than it takes in from taxes, it leads to a budget deficit, which adds to the national debt.
However, a report from a prominent U.S. financial institution emphasized that officials from the administration have consistently indicated that the tariffs wouldn’t just vanish.
Feroli’s communication to clients included a quote from Treasury Secretary Scott Bessent, who noted that the administration might “reconfigure the current tariff structures” through different methods, with Commerce Secretary Howard Lutnick confirming that “the tariffs will stay.”
“Considering the statements made by various officials, a plausible scenario appears to be that the administration will utilize various legal channels to maintain the average effective tariff rate for U.S. buyers,” the economists pointed out.
“Achieving even this scenario would necessitate a considerable adjustment of tariffs across various products and countries, leading to some beneficiaries and others at a disadvantage. There would also be a notable uptick in trade policy uncertainty,” he added.
While the ruling keeps some sectoral tariffs in effect, JPMorgan analysts predict that, in the absence of IEEPA tariffs, the average effective tariff rate might drop from 9.4% in December to slightly above 4%.
President Trump declared on Friday that he would enact a document imposing a 10% tariff on most incoming goods, a sharp rise from the 2.3% rate recorded in 2024, prior to the extensive range of tariffs his administration instituted.
