What’s at stake as Trump’s tariffs go before the Supreme Court

Also at stake: trillions of dollars.

Three sets of tariffs are in play, which make up the overwhelming majority of U.S. tariff revenue: Baseline tariffs of 10% on virtually all countries, steeper tariffs on countries the administration considers bad actors on trade, and an additional set of tariffs on Canada, China and Mexico, which the administration says are punishment for those countries not doing enough to prevent the flow of fentanyl into the U.S.

Here is what you need to know about the potential consequences of the Supreme Court’s decision.

How much money has the government collected?

Through August, the government had collected around $90 billion from the tariffs, according to analysts’ review of Customs and Border Protection data. The administration has told the court that it expects to have collected between $750 billion and $1 trillion in tariffs by next June.

The White House has said that U.S. trading partners have agreed to deals over tariffs in which they will make trillions of dollars of purchases and investments in the U.S. economy. At one point, Trump projected those commitments could reach $15 trillion, though key details of the investment programs have yet to materialize, and it isn’t clear how much money, if any, other nations have paid.

If the court rules the tariffs illegal, will businesses get their money back?

Maybe. When the U.S. government takes money without authorization—such as overcollection of taxes—courts typically order the feds to give it back. There could be complications here.

Let’s start by saying that a repayment program of such scope would be unprecedented. And the administration has indicated that it thinks it could be impossible to do, because of potentially dire consequences for the Treasury and the economy.

Three lower courts have rejected the tariffs, on the grounds that Trump improperly relied upon a 1977 law that grants the president powers to regulate the economy during an emergency. Still, judges have allowed the duties to remain in effect until the Supreme Court has the last word. If the justices rule against Trump, the onus is on them to say what happens next. Another wild card is Congress. Though unlikely, it is in theory possible the legislature could move to retroactively authorize the tariffs Trump imposed.

Has the government ever run a large-scale refund program?

The Cato Institute’s Scott Lincicome, a critic of the tariffs, says the U.S. has issued very large automatic duty refunds previously. Here’s how.

“All imports that come into the country have a tariff code assigned for that program, and Customs basically pushed a button and the money went back into people’s accounts, or in the olden days, they would get a check from the Treasury," Lincicome said. “Believe it or not, it actually did not take very long to do these refunds: a few months."

“It is doable," he said. “Whether the courts and whether the government agree to it, I think, is a different question."

Would Trump’s trade deals be affected?

Undoubtedly—though it isn’t obvious how. Treasury Secretary Scott Bessent said in court papers that an earlier ruling against the administration left world leaders “questioning the president’s authority to impose tariffs, walking away from or delaying negotiations, and/or imposing a different calculus on their negotiating positions."

It is possible some countries might walk away from their agreements, or seek to renegotiate them, if the Supreme Court knocks out the Trump leverage underpinning the deals.

Some countries might think it is generally to their advantage to keep the deals they have struck. The president could go to Congress to shore up trade deals (though it isn’t clear he would be successful). The president also could attempt to invoke other tariff authorities.

Does the administration have contingency plans if it loses?

Alongside the tariffs at issue here, Trump has imposed a number of levies on industries including automobiles, steel, aluminum and copper under a separate national-security authority known as Section 232. Trump’s team has recently expanded the scope of those tariffs, providing a backstop if the broader tariffs are overturned.

Additionally, administration officials have weighed other contingency plans to replace the tariffs. That includes potentially deploying a never-before-used provision in the Trade Act of 1974 that allows for tariffs of up to 15% for 150 days to address trade imbalances with other countries. That would buy time for Trump to devise individualized tariffs for each major trading partner under a different provision of the same law used to counter unfair foreign trade practices.

Such a plan could be more legally defensible.

What happens if Trump wins?

Trump has wielded his tariff authority to threaten immediate duties on trading partners in response to a litany of irritants, from drug trafficking and immigration to his recent annoyance with an ad campaign from a Canadian province. A decision upholding that authority would legitimize the use of tariffs as a cudgel to resolve trade and noneconomic disputes alike.

It could also give Trump broad authority to regulate the U.S. economy without the involvement of Congress in any circumstance where he finds an emergency exists.

“If we don’t win that case, we will be a weakened, troubled financial mess for many, many years to come," Trump has promised. “And if we do, we’re going to be the most powerful economic country in the world."

This explanatory article might be updated periodically.

Write to Louise Radnofsky at louise.radnofsky@wsj.com and Gavin Bade at gavin.bade@wsj.com