To justify the bulk of his tariffs, Trump has invoked the International Emergency Economic Powers Act. In the administration’s view, this law authorizes them to impose tariffs on more or less any nation, since America’s trade deficit constitutes an unusual and extraordinary threat to the United States.
But the idea that a trade deficit constitutes such a calamity is disputed by most economists and legal scholars, and it’s not clear that IEEPA authorizes broad tariffs in any case.
Since taking office, Trump has massively increased taxes on imports. In January, the average U.S. tariff was 2.5 percent. Now, it is 17.9 percent — the highest since 1934 — according to the Budget Lab at Yale.
This has taken a toll on the U.S. economy. By taxing various foreign-made industrial inputs, Trump has made it more expensive for American companies to produce things. And by taxing imported goods, he’s driven up retail prices.
According to a recent analysis from the Budget Lab, Trump’s tariffs are poised to slow economic growth by 0.5 percentage points in 2025 and 2026. If maintained indefinitely, his trade regime will leave the American economy persistently 0.35 percent smaller, effectively shedding $105 billion off our national wealth, year after year.
The tariffs are also likely to raise America’s price level by about 1.3 percent in the short run. This would effectively cost the average household $1,800 in annual income, due to higher expenses. Making matters worse, by depressing consumption and investment, the tariffs are set to marginally increase unemployment. In the Budget Lab’s model, joblessness rises by 0.3 percentage points by the end of this year and 0.7 points by the end of next year.
If the Supreme Court invalidated all of the tariffs that Trump imposed under IEEPA authority, most of these harms would disappear.
The only major benefit of the tariffs has been their impact on federal deficits. Trump’s trade agenda is poised to raise about $2.2 trillion in revenue over the coming decade. The repeal of the tariffs would cut that by more than half.
Nonetheless, taken together, the overturning of the tariffs would provide a significant economic stimulus — increasing the average household’s real annual income by more than $1,000, accelerating growth, and reducing unemployment.
And all that is before accounting for the impact of tariff reimbursement payments: When the government levies an illegal tax, it isn’t allowed to retain that revenue. Rather, every importer that paid a tariff this year would be entitled to a refund. To make full restitution, the government would need to send out more than $100 billion to U.S. businesses.
The stimulative impact of those reimbursements would likely be modest. Nevertheless, reimbursements would boost business revenue — and thus potentially, investment — at the margin.
Of course, stimulating the economy can entail costs. Typically, slashing taxes and increasing deficits nudges up inflation. But since Trump’s tariffs directly increase the cost of both consumer goods and industrial inputs, lifting them would likely spark growth and dampen inflation simultaneously. Ending the trade war would therefore be a win-win.
Unfortunately, it is a “win” that Trump will likely do everything in his power to avoid. Outside of IEEPA, a number of other laws could allow Trump to reimpose virtually all of his tariffs. But the process of rebuilding his trade regime could be lengthy and cumbersome.
Thus, if the Supreme Court rules against Trump in the IEEPA case, tariffs would likely decline slightly in the short-term. But in the longer run, they could eventually creep back up to something approaching their current level.
That said, the Trump administration has strong political incentives to pare back its trade war. Americans’ top concern is the cost of living. And they overwhelmingly disapprove of Trump’s handling of both trade and inflation.
Trump seems to have been rattled by the GOP’s dismal showing in the 2025 elections. The morning after Democrats stomped to victory, Trump declared on Truth Social, “Costs are coming way down. Affordability is our goal.”
In this context, the White House might see an adverse Supreme Court ruling as an opportunity to reset its trade policy. By claiming that his hands have been tied, Trump could seek to replace some, but not all, of his tariffs without losing face.
If Trump wants to make America poorer in service of his economically illiterate trade ideas, however, the Supreme Court probably won’t stop him. Rather, it will just force Trump to pursue such self-sabotage in a more laborious and bureaucratic manner.
Eric Levitz is a senior correspondent at Vox, where he covers a wide-range of political and policy issues, with a special focus on questions that internally fracture the American left and right.
JOEL PETT