The Country Is Facing an "Economic Disaster" and national security concerns if the Supreme Court rules against the imposition of large-scale tariffs on imports from other countries, warned US President Donald Trump.
In a statement to reporters on Monday, he said his administration plans to pay $2,000 each to low- and middle-income Americans, using the proceeds from the tariffs. The rest of the funds will be directed towards reducing the national debt.
"We will pay a dividend to the middle and lower income groups — "about $2,000, and we'll use the rest of the tariffs to reduce our debt," Trump said during the swearing-in ceremony for the new US ambassador to India, Sergio Gore.
White House chief economic adviser Kevin Hassett added that the original plan was to use the tariff revenue solely to reduce the budget deficit. The higher than expected tax revenues, however, allow some of the funds to be redirected to a "household dividend".
What is the case?
The U.S. Supreme Court is currently reviewing the legality of tariffs imposed by Trump under the Foreign Economic Offenses Act of 1977. (IEERA). During oral arguments last week, some justices expressed doubts about whether the president had the right to use IEERA for customs purposes. Judge Amy Coney Barrett even warned that a possible ruling against the administration could lead to "chaos", as the courts would have to decide how to compensate American companies that paid illegal tariffs.
If the Supreme Court upholds the lower court's ruling, the government could be forced to rescind over $100 billion in contributions. Trump, however, claims that the figure will be much higher - "over $2 trillion".
"They're not giving the right numbers. "There will be an economic catastrophe, as well as a national security catastrophe, if we lose the deal," Trump said.
ΠPolitical context
The statements come against the backdrop of a decline in the president's approval ratings in recent months. Some voters are expressing dissatisfaction with inflation and the availability of goods, which led to Republican losses in several states in local elections.
At the same time, Trump defended the economy and its policies, stating that inflation is already falling and food and energy prices are decreasing. ΠYou think inflation will fall to 1.5% "overall". Labor Department data showed that the consumer price index rose 3.0% year-on-year through September, slightly below expectations. The rise in rents and fuel was also partially offset by cheaper cars, airfares and hotel rates.