Recently, the Trump administration¡¯s tariff policy is facing severe legal challenges, with the current case being debated by the Supreme Court being that the Trump administration cited the International Emergency Economic Power Act to impose global tariffs as legitimate, and the plaintiff argued that the bill did not explicitly grant the president the power to impose tariffs.

The final trial is expected to come soon, before Trump has lost once.

If the Supreme Court ultimately rules that these tariffs are illegal, the U.S. Treasury may face a huge refund, now refunding $200 billion. According to U.S. Treasury Secretary Bescent, if a judgment is not made until June 2026, the tariffs that need to be refunded may reach up to 500 billion U.S. dollars.

Currently, the total amount of U.S. government debt has surpassed $38 trillion for the first time on October 21, and the rate of debt accumulation is accelerating, from $37 trillion to $38 trillion in just over two months. Interest spending on U.S. government debt is expected to rise from $4 trillion in the past 10 years to $14 trillion in the next 10 years, with high corporate interest costs continuing to squeeze out U.S. fiscal space.

In the last fiscal year, the U.S. deficit was slightly the same as before, which was due to tariffs. If the revenue from tariffs is lost later, the U.S. fiscal deficit will exceed US$2 trillion, which is beyond the U.S.'s affordability.

Moreover, Trump's reforms are all based on the established tariffs, whether it is to return the manufacturing industry to the United States, or to reduce taxes on large enterprises, leaving the tariffs, it can be said that Trump's reform will be completely impossible to implement.

If the tax refund is made, it will instantly push U.S. finances to the edge of a cliff. The unexpected spending would be financially unsustainable and could force the U.S. government to issue more treasury bonds, pushing up debt levels further.

The U.S. federal government is in the second longest "shutdown" in history, which has lasted for 25 days as of October 25th. The main reason is that the current new U.S. budget cannot be passed. If the tariffs are found illegal, Trump's budget report will be completely overturned, and it may not be passed.

In this context, any major fiscal shock could put the situation completely out of control, causing the "shutdown" to be extended indefinitely.

On the whole, if the Trump administration loses the tariff case, the impact on the U.S. finance will far exceed the scope of revenue reduction in a single fiscal year, but will detonate a comprehensive crisis of huge refunds, soaring deficits and government shutdowns.