President Donald Trump has signaled plans to end tentative trade agreements should his tariff policy be struck down.
In an Oval Office press conference on Wednesday, Trump warned a lack of tariffs would destroy leverage the administration had to strike deals with trade partners like South Korea and the European Union.
“Our country has a chance to be unbelievably rich again. It could also be unbelievably poor again. If we don’t win that case, our country is going to suffer so greatly, so greatly,” Trump said.
“We made a deal with the European Union where they’re paying us almost a trillion dollars,” he added. “And you know what? They’re happy. It’s done. These deals are all done, I guess we’d have to unwind them.”
The U.S. Court of Appeals for the Federal Circuit ruled on Friday that Trump overstepped his authority in invoking the International Emergency Economic Powers Act of 1977 to declare national emergencies to justify the tariffs. In February, Trump said he would impose tariffs on Mexico and Canada as a way to stop the passage of illegal drugs like fentanyl across the border and halt undocumented migrants from entering the country. He later announced another raft of levies as a means to incentivize domestic manufacturing. The ruling upheld a decision by a federal trade court in New York from May.
On Wednesday, Trump asked the Supreme Court to uphold his tariffs. According to a court filing, Solicitor General D. John Sauer asked the Supreme Court to make its decision on whether to review the case by Sept. 10, saying the federal circuit’s ruling “disrupted highly impactful sensitive ongoing diplomatic trade negotiations and cast pall of legal uncertainty over the President’s efforts to protect our country by preventing an unprecedented economic and foreign policy crisis.”
The striking down of Trump’s tariff policy would also mean U.S. businesses could seek a $150 billion refund through Customs and Border Protection on the taxes they’ve already paid.
The White House did not respond to Fortune’s request for comment.
Will Trump really lose leverage in trade negotiations?
Trump’s indication he would dissolve his trade relationships in the case his tariffs were struck down is a hollow one because the agreements he’s made aren’t legally binding deals, according to Brett House, professor of professional practice at Columbia Business School.
“These are truly nothing more than ad hoc letters of intent,” House told Fortune. “So to say that much would be lost is vastly overstating the quality of those very tentative, very cursory, and very superficial agreements.”
Trump’s argument about the U.S. losing ground in negotiations also undermines legitimate trade deals in place prior to the administration imposing a wave of import taxes, House said. He cited the 1994 entry into force of the North American Free Trade Agreement, which was replaced by the United States-Mexico-Canada Agreement in 2020.
In April, Trump said that since the beginning of NAFTA, the U.S. lost 90,000 factories, reiterating the need for American reshoring. While the figure matched what was used in a 2020 report from the Economic Policy Institute, revised Census data used in that report found a net loss of 70,500 manufacturing facilities between 1997 to 2022, CBS News first reported. About a quarter of those factories had four or fewer workers.
“If anything, countries that were interested and willing to negotiate comprehensive, legally binding trade agreements with the U.S. now are less likely to do so because they can see the good word of the United States—with countries where agreements already exist—is cast aside capriciously,” House said.
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