Economist Peter Schiff says that President Donald Trump’s tariffs are likely headed for defeat at the U.S. Appellate Court, setting the stage for what he refers to as “another scapegoat” for the coming recession.
Refunds For Importers And ‘Another Scapegoat’
On Sunday, in a post on X, Schiff said, “The U.S. appellate court will likely strike down Trump's tariffs as unconstitutional,” bringing an end to a central piece of Trump’s trade policy, while also opening the door for American importers to recover substantial sums of money already paid as tariffs.
“That means U.S. importers can get refunds on amounts paid,” Schiff says, referring to the billions that the administration has collected from tariffs in recent months.
See Also: Hot Inflation Report Fuels Fed Dilemma As Tariff-Driven Pressures Mount
Schiff believes that this essentially sets the stage for Trump to blame “another scapegoat” for the upcoming recession, alongside Federal Reserve Chair Jerome Powell, whom he’s been repeatedly attacking for not cutting rates fast enough, and former President Joe Biden.
“Ironically,” he says, “repealing tariffs would actually help,” referring to the much-needed relief they would provide to businesses and consumers, at a time when inflation remains elevated.
Trump Predicts ‘Great Depression’
Early this month, Trump warned of a new “Great Depression” if his tariff policies were overturned by a “radical left court,” in a Truth Social post.
“It would be impossible to ever recover or pay back these massive sums of money and honor. It would be 1929 all over again, a GREAT DEPRESSION!” he said.
The U.S. Court of Appeals for the Federal Circuit is currently examining the rationale behind Trump’s use of the International Emergency Economic Powers Act to impose tariffs. Former House Speaker Paul Ryan (R) said earlier in the week that Trump’s emergency tariff authority could be overruled by the Supreme Court as well.
Contrary to Schiff’s claims of a refund, Goldman Sachs economist Alec Phillips believes that duties already paid by importers will not be refunded.
“Tariff revenue was never counted toward offsetting the cost of the package,” he said, noting that importers may only be spared future tariffs.
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