Trump Governance Defends Tariffs Amidst Scrutiny Over Deficit Impact & Supreme Court Challenge
WASHINGTON – December 4, 2025 – top Trump administration officials are defending the current tariff regime as beneficial for American labor and trade rebalancing, even as new data casts doubt on its projected impact on reducing the national debt, which recently surpassed $38 trillion.The debate comes as the Supreme Court considers the legality of the administration’s use of emergency powers to impose the tariffs.
Kevin Hassett, a senior advisor to the President, maintains that spending restraint alongside tariff revenue will contribute to deficit reduction. However, this claim is being challenged by budget watchdogs. A recent estimate from the Congressional Budget Office (CBO) indicated that projected savings on the national debt have shrunk by $1 trillion between August and November, linked to declining effective tariff rates as trade deals evolve.Pantheon Macroeconomics recently found tariffs have generated $100 billion less revenue than initially projected by the white House, largely due to a decrease in imports from China.
While tariff revenue has increased significantly from 2024 to 2025 – tripling or quadrupling the previous year’s level, according to calculations by Apollo Global Management’s torsten Slok in September – the Peter G. Peterson Institute and the Committee for a responsible Federal Budget have raised concerns. The Peterson Institute noted the debt grew by $1 trillion in just two months, the fastest rate recorded outside of the pandemic period.
In an interview with The new York Times’ Andrew Ross Sorkin, Commerce Secretary Alex Bessent asserted that tariffs are currently generating “ample revenue” and are “good for labor.” He emphasized that the primary objective is to rebalance trade and revitalize domestic manufacturing,not to permanently fund the government.
The administration’s tariff strategy is also facing legal challenges. The Supreme Court is currently reviewing whether former President Trump overstepped his authority by utilizing the 1977 International Emergency Economic Powers Act to implement tariffs beyond historical precedents. Bessent stated that a Supreme Court ruling against the tariffs would be “a loss for the administration” and “a loss for the American people.”
Hassett defended the use of the emergency economic powers law, arguing it is indeed justified by the social damage caused by decades of trade deficits and the resulting hardship for American workers, citing “deaths of despair,” frequently enough linked to fentanyl. He expressed confidence the Supreme Court will uphold the administration’s authority to levy import charges. Both Hassett and Bessent also dismissed the notion that tariffs are inherently inflationary, characterizing them as a one-time price adjustment rather than a sustained driver of rising prices.
