Bessent: Unlikely Supreme Court will overrule tariffs, Trump's 'signature economic policy'

• Bessent compared the situation to the Supreme Court's decision not to overturn Obamacare, arguing the court would not want to 'create chaos' by overruling a major presidential economic policy
• Trump invoked emergency powers under IEEPA to impose tariffs on dozens of nations and recently announced additional tariffs on Europe until a 'Complete and Total purchase of Greenland' is reached
• The administration justifies the emergency tariff powers as necessary for national security to counter Russian and Chinese expansion in the Arctic region, despite widespread rejection from Greenland, Denmark, and European leaders

Summary

Key Development:

Treasury Secretary Scott Bessent stated Sunday that the Supreme Court is "very unlikely" to overturn President Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The Supreme Court could rule on the legality of Trump's use of IEEPA for tariffs as early as this week before the end of its current term.

Main Policy Actions:

Trump announced new tariffs on European goods Saturday, contingent on reaching a deal for the "Complete and Total purchase of Greenland." The statute being invoked for these European tariffs was not specified but appears to mirror previous IEEPA-based duties imposed on dozens of nations. The IEEPA grants the president broad authority to deploy economic tools against "unusual and extraordinary threats."

Official Rationale:

Bessent defended the tariffs as a response to a national emergency, stating "The national emergency is avoiding a national emergency." He characterized the move as strategic use of U.S. economic power to "avoid a hot war." The administration claims U.S. acquisition of Greenland is critical for national security to counter Russian and Chinese expansion in the Arctic region.

Political Context:

Bessent drew parallels to the Supreme Court's handling of Obamacare, suggesting the court avoids creating "chaos" by overturning signature presidential policies. The court upheld a key Affordable Care Act provision in June.

Market Implications:

The pending Supreme Court decision creates uncertainty for international trade and tariff policy. European leaders and Greenland/Denmark officials have widely rejected Trump's demands, setting up potential escalation in transatlantic trade tensions.