In 2025, the U.S. Supreme Court is about to make a ruling on whether the Trump-dominated tariff policy against China is legitimate, and if it is eventually recognised as “Veteran,” Trump will not only be hit legally, but more likely to put the U.S. finance under tens of hundreds of billions of dollars in tax refunds and compensation pressures.
China, on the other hand, may usher in the moment of "settling the ledger" in this tug-of-war of trade that has lasted for many years. On November 5th, a hearing that has attracted worldwide attention will become a historic node. The whole world is waiting for the sound of this hammer landing.
So what will Trump ultimately get, and what impact will it have on the world?
Two trials in a row: the legitimacy of Trump tariffs is collapsing
The starting point of this lawsuit can actually be traced back to Trump's "reciprocal tariff" policy against China and other economies in 2018. At that time, Trump used the International Emergency Economic Power Act to bypass Congress on the grounds of "national security" and directly initiated tariff increase measures. On the surface, it is to protect domestic industries, but in fact, it uses tariffs as bargaining chips to forcibly promote the so-called "America first" strategy.
But the legal account, no matter how long it takes, someone has to settle it. At the end of May this year, the U.S. Court of International Trade gave the first "liquidation": Trump's practice violated the president's authority and was obviously ultra vires.
The judges pointed out that the International Emergency Economic Power Act allows the president to take economic measures when the country is faced with an emergency threat, but this is not the same as being able to wave tariffs at will, and tariffs are essentially fiscal policies and should be subject to congressional approval, not a person's account.
Subsequently, at the end of August, the Federal Circuit Court of Appeal also held a second trial. The process was not easy, and the debate between judges lasted for several days, with support and opposition at odds. But ultimately, a 7:4 voteined the original judgment, confirming Trump’s existence of “supremacy” behavior.
These two verdicts equal to completely tearing down Trump's "national security" shield of the year, and more seriously, it provides a clear legal basis for companies around the world to prosecute the U.S. government and demand the refund of tariffs.
The Trump camp is aware of the seriousness of the problem, and they know that they must win the Supreme Court’s final decision. Otherwise, the entire “dual tariff” architecture will turn into a blank paper, and may even ruin America’s finances and credibility.
Hundreds of billions of compensation: How much money can Chinese companies get back?
The significance of legal decisions is not only reflected on paper, but also directly transformed into economic "real money". Once the Supreme Court sides with lower courts, the U.S. government will face a staggering list of reimbursements.
According to U.S. Treasury Secretary Bescent, if the final judgment maintains the "ultra vires" determination, the U.S. government will have to refund at least half of the imposed tariffs. Considering that the total tariffs imposed on China during the Trump era exceeded $500 billion, even if only half of them were refunded, it would be a fiscal expenditure of $250 billion.
But things are not so simple. Because tax refunds are only the first layer, and there is a chain reaction like interest, default, corporate loss compensation. Especially when some export companies suffer significant losses after the tariff policy is introduced, if the court determines that Trump’s policy is illegal, then these companies will be eligible for compensatory compensation.
China, the most affected party in this economic dispute, is also the most anticipated party to "reverse" over the past few years, the rising costs of Chinese export companies due to increased tariffs, loss of orders, and profit shrinkage are not a minority of problems.
Once the tax refund process can be started, many companies will not only be able to get back the additional tariffs imposed in the year, but also get a certain interest compensation.
For Chinese foreign trade enterprises, this is a compensation for a “policy dividend” and a difficult strategic reversal.More importantly, this tax refund is equivalent to the US’ indirect acknowledgment that previous measures are wrong and will weaken its moral basis in future trade negotiations.
However, the Chinese government has always remained calm and restrained in this game, and has never taken the initiative to escalate contradictions. Instead, it has defended its rights according to law and argued for reason. Now it has finally ushered in a possible "counterattack window".
Economies such as the European Union, Japan, and South Korea also consumed "tariff losses" in the Trump era, and if the United States was convicted of infringement, they would also have grounds for filing claims or initiating similar lawsuits.
Trump does not want to calculate this economic account, and neither does the U.S. Treasury, but it has been placed on the table of global trade and cannot be avoided.
Judicial showdown: Trump's political pressure and the Supreme Court's choice
Looking at the increasing disadvantage of the legal level, Trump did not choose to retreat, but instead launched a naked political counterattack.
On the outside, he highlighted that if the courts rejected the tariff policy, the U.S. would no longer have the capacity to retaliate, “national security would be deadly threatened.”
What's even more interesting is that Trump even intends to attend the hearing of the Supreme Court in person. This kind of behavior is extremely rare in American history, and it obviously implies political pressure. His purpose is very clear, that is, to use his influence to exert public opinion and psychological pressure at critical moments.
The composition of the Supreme Court also adds variables to this judgment. At present, conservative judges occupy six seats out of nine, three of whom were nominated by Trump during his term of office. This background makes the outside world generally worry about whether the court can truly be politically neutral and make judgments according to law.
Conservative judges tend to support executive power, but they value the Constitution and the principle of balance of power more, and whether to allow the president to bypass Congress and directly formulate trade policy will be the core topic of this hearing.
This debate is not only about Trump's personal fate, but also likely to determine the power boundaries of American presidents in the coming decades. If it is ruled that the president can implement major fiscal policies without the consent of Congress, then future presidents will have greater power. On the contrary, if the ruling exceeds its authority, it will become a major constraint on executive power.
Regardless of the outcome, the verdict will profoundly affect the global confidence in the U.S. rule of law system, affecting the background and position of countries in future trade negotiations with the U.S.
China has always emphasized acting in accordance with the rules of World Trade, advocating fair, equal and sustainable trade relations. If U.S. courts eventually correct the wrong policies of the Trump era, it is not only a legal victory, but also a correction of the international trade order.
This is also why this hearing is regarded as a "watershed" in global trade. It is not only a judicial event, but also a contest of power, law and global interests.
On November 5, the curtain opened, and the world waited with breath. This verdict may be the "last mile" for China to win the tariff war, or it may be a "general liquidation" of U.S. trade policy.
If Trump is found illegal, the Sino-U.S. trade pattern will be completely wiped out, and China will not only be able to regain the benefits it once lost, but will also take a more proactive position in the formulation of new rules.
The United States, for its part, may have to face a president's economic legacy that has been denied by courts and a more intractable global trading environment.
This is not a simple win-win game, but a global test of system, rules, and trust, and this time the world will no longer easily believe that “America has said it” and that the law is the ultimate judge.
Who can really keep the bottom line in this complex game, who can win respect and initiative in the future international order, now, all the eyes, are focused on that wooden piece of the Supreme Court, once it falls, the world will sound differently.
References:
"Extremely unusual", Trump plans to attend the Supreme Court tariff case debate-2025-10-16 08:07 · Observer.com