Portuguese 
English 
Spanish 
3 min of reading 
0 comments 
After Court Considers Illegal Surcharges, A Battle In The Supreme Court Will Determine The Fate Of A Billion-Dollar Fortune Paid By Companies.
The tariffs policy of President Donald Trump faces a decisive moment. A recent court ruling could force the U.S. government to reimburse more than US$ 200 billion to American companies. The issue is now heading to the Supreme Court, which will define the future of the surcharges and the fate of a billion-dollar amount.
Understand The Court Decision Against Trump’s Tariffs
A federal appeals court ruled that Trump illegally used the International Emergency Economic Powers Act (IEEPA). The decision was issued on Friday (29). The law was used to impose sweeping tariffs on various countries.
These measures raised import tax rates. The rates reached 50% for India and Brazil. In China, the rates peaked at up to 145% earlier this year. As a result, American companies paid more than US$ 210 billion by August 24 to cover these tariffs, now deemed illegal by the courts.
-
Coca-Cola announces in Brazil the end of the cycle for a historic bottled product, initiating a change that could end an era for consumers and shake up the habits of millions of Brazilians.
-
Brazil’s gross debt rises to 80.1% of GDP in March and a primary deficit of R$ 80.676 billion triggers a fiscal alert on a day of pressure on public accounts.
-
Government of Argentina increases fuel tax in May, catches drivers by surprise and further pressures gasoline after a 20% increase since the start of the war in Iran.
-
Desenrola 2.0 can withdraw R$ 4.5 billion from the FGTS to pay off renegotiated debts, allows the use of up to 20% of the balance by workers earning up to five minimum wages, and provides for discounts of 40% to 90%.
The Uncertain Future In The Supreme Court Of The U.S.
On Tuesday (2), Trump acknowledged the possibility that the U.S. Treasury may have to “return” the collected revenue. This would happen if the decision is upheld by the Supreme Court. The government is preparing an appeal and is asking for urgency to keep the tariffs valid after the October 14 deadline.
“It’s a very important decision and, frankly, if they make the wrong decision, it would be devastating for our country“, Trump said. However, the nation’s highest court may not accept the case, upholding the lower court’s ruling. If the appeal is heard, the tariffs are expected to remain in effect during the process.
How The Reimbursement Of Billions To Companies Would Work
If the Supreme Court confirms the illegality, the charges will need to cease immediately. However, the reimbursement process is uncertain and would not be quick. Thomas Beline, a business lawyer, states that his clients are already asking when they will get their money back. His answer: don’t rush.
Ted Murphy, another trade lawyer, points out three possible scenarios for reimbursement:
- The government reimburses all importers who paid.
- The decision applies only to the plaintiffs of the lawsuit.
- The government creates an administrative process where companies need to apply for reimbursement. This is the most likely option.
Faced with uncertainty, many companies continue to file administrative protests to facilitate a future reimbursement. Some investment firms are already trying to buy rights to these potential reimbursements.
The Economic Risks Of A Billion-Dollar Reimbursement
The prospect of reimbursement pleases companies but poses risks to the U.S. economy. The billion-dollar revenue from tariffs allowed the government to borrow less. Returning the money would require more indebtedness to cover the bills.
Furthermore, reimbursements could fuel inflation. According to Gary Hufbauer, a researcher at the Peterson Institute for International Economics, the measure could inject a large amount of money into the economy. He notes that budget deficits and loose monetary policies under the Biden administration triggered the rise in inflation. If Trump can get the Federal Reserve to lower interest rates while refunds are being made, the inflationary scenario could worsen.
-
-
2 people reacted to this.