Bessent responded saying, “We would have to give a refund on about half of the tariffs, which would be terrible for the Treasury,” adding, “If the court says it, we’d have to do it.” However, without providing details, the treasury secretary said that there are “numerous other avenues” that can be taken instead of rebates though they would “diminish President Trump’s negotiating position”.

A federal appeals court last month ruled that the usage of the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose emergency tariffs, the exercise which Trump carried out earlier this year.

In its majority ruling, the appeals court said, “We discern no clear congressional authorization by IEEPA for tariffs of the magnitude of the Reciprocal Tariffs and Trafficking Tariffs.”

Since the appeals court delayed the implementation of its order until October 14, the fresh tariff rates imposed by the Trump administration in early August would remain in place until a Supreme Court’s verdict comes in.

Bessent said that he is confident of a victory of the federal government in the Supreme Court, however, the appeals court verdict has put a question mark over the Trump administration’s ability to continue trade negotiations.

Trump had also negotiated trade deals with some countries, including Japan, South Korea, the UK, European Union among others. America has imposed a 50% tariff, one of the highest, on Brazil and India.

(with inputs from CNN)