Congress must enact Trump tariffs now to steer the U.S. from a massive revenue cliff

MarketWatch

by Charles Benoit

February 24, 2026

AI-Generated Deep Dive Summary

The U.S. Supreme Court’s recent ruling on former President Donald Trump’s “liberation day” tariffs has thrown a financial wrench into the federal budget. The court determined that Trump exceeded his authority under the International Emergency Economic Powers Act of 1977 (IEEPA) when imposing certain tariffs, potentially stripping the government of billions in revenue. If lawmakers fail to act, this decision could add $2.4 trillion to U.S. debt and severely impact federal finances. With less than 150 days remaining for Congress to address this issue, the stakes are high. Trump’s reliance on IEEPA to impose tariffs accounted for a significant portion of recent federal tariff revenues. Two specific orders under this authority now generate most of these funds, making their potential loss a major blow to the budget. Tariffs have become a critical revenue stream, particularly in an era of rising debt and constrained fiscal policies. Without this income, the federal government faces a substantial shortfall, threatening its ability to fund essential programs and services. The ruling underscores the importance of Congress enacting Trump-era tariffs before the window closes. If they fail to do so, the financial implications could be severe. Tariffs not only generate revenue but also play a role in protecting U.S. industries from foreign competition. Industries like manufacturing, agriculture, and technology stand to suffer if these protections are removed, potentially leading to job losses and economic instability. This decision highlights the delicate balance between trade policy and fiscal responsibility. Lawmakers must weigh the economic benefits of maintaining tariffs against the legal and financial risks of inaction. The situation also raises broader questions about the long-term sustainability of U.S. trade policies and their impact on national debt. With time running out, the urgency for Congress to act is clear. Failure

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Originally published on MarketWatch on 2/24/2026