US Treasury can easily cover any tariff refunds, says Bessent
The US Treasury has more than adequate funds to pay any tariff refunds ordered if the Supreme Court rules against President Donald Trump's emergency tariffs, but any repayments would be spread out over weeks or even a year, US Treasury Secretary Scott Bessent told Reuters on Friday.Bessent said in an interview that he still doubted that the court would rule against Trump's tariffs, but he believed that any refunds would be a corporate boondoggle for companies that passed on added costs to their customers.He added that any negative ruling may not be a simple yes-or-no result, but something more nuanced that could complicate the refund process."It won't be a problem if we have to do it, but I can tell you that if it happens - which I don't think it's going to - it's just a corporate boondoggle," Bessent said. "Costco, who's suing the US government, are they going to give the money back to their clients?"Bessent said companies generally, however, were not passing tariffs on to consumers, saying there was "very, very little, if any, pass-through," and disputed that Trump's tariffs contributed to inflation. He said goods inflation had been below headline inflation.Importers and trade lawyers had anticipated a Supreme Court ruling on Friday but the court instead issued a ruling on a different matter. It remains unclear when the court will rule on the tariff case, which challenges President Donald Trump's use of the International Emergency Economic Powers Act to impose broad tariffs on nearly every US trading partner.Bessent said he believed that the longer the tariff decision is delayed, the more likely it is that the Supreme Court rules in Trump's favour.With cash on hand of nearly $774 billion as of Thursday, the Treasury has more than enough funds to cover any refunds."We're not talking about the money all goes out in a day. Probably over weeks, months, may take over a year, right?" He said.Meanwhile the US Treasury Department's plan to increase scrutiny of overseas transfers of money should not harm people who can prove the funds did not come from social service payments, Scott Bessent told Reuters.Bessent on Friday announced the Treasury's Financial Crimes Enforcement Network (FinCEN) is investigating some money services businesses as part of a crackdown on federal social benefits abuses in Minnesota, while some banks will be audited by the Internal Revenue Service for alleged money laundering.FinCEN also issued a geographic order increasing scrutiny on banks and money transmitters in Minnesota's Hennepin and Ramsey counties, which will require firms to report additional information on funds transferred outside of the US, including FinCEN reports on transactions above $3,000.Asked if this would have a chilling effect on legitimate remittances made by migrants to families overseas, Bessent said, "No, it shouldn't. Anyone who can prove where the money has come from... is fine," in an interview after touring the Minneapolis-area engineering lab of RV and boat maker Winnebago Industries.Bessent said payments from people who are in the United States legally were usually transferred through the regulated banking system. "You cannot send welfare money from the people of Minnesota to Somalia, right? Like, that just means you're getting too much, or you can't send stolen money."Remittances account for large percentages of the gross domestic product of many poorer countries, including El Salvador and Somalia.Minnesota Governor Tim Walz, a Democrat and a vice presidential candidate in the 2024 election, this week announced he will not seek a third term and instead focus on allegations of state welfare fraud that have become a crisis after mounting attacks from Republican U.S. President Donald Trump's administration.The Trump administration has singled out Walz and Minnesota, including its large population of Somali Americans and Somali immigrants, over allegations of fraud dating to 2020 by some nonprofit groups that administer the state's childcare and other social services programs, backed by federal funding.At least 56 people have pleaded guilty since federal prosecutors started to bring charges in 2022 under Trump's Democratic predecessor, Joe Biden.