Department of Justice issues Social Security warning

The Department of Justice has cautioned that striking down President Donald Trump’s tariffs under the 1977 International Emergency Economic Powers Act (IEEPA) could spark a financial catastrophe comparable to the Great Depression, placing vital social programs like Social Security and Medicare at risk.

The Department of Justice

“In such a scenario, people would be forced from their homes, millions of jobs would be eliminated, hard-working Americans would lose their savings, and even Social Security and Medicare could be threatened,” wrote U.S. Solicitor General D. John Sauer in a letter submitted to the U.S. Court of Appeals for the Federal Circuit. The appellate court is weighing whether to uphold a May ruling by the Court of International Trade (CIT), which found that Trump had exceeded his authority in imposing most of the tariffs. While the CIT’s order, along with a similar decision from the District Court for the District of Columbia, has been temporarily stayed, the outcome could have sweeping implications for Trump’s trade policies and the broader U.S. economy.

The IEEPA

The IEEPA grants presidents broad authority to regulate commerce in response to “an unusual and extraordinary threat” during national emergencies. Trump invoked trade deficits and fentanyl smuggling to justify tariffs on Canada, Mexico and China, as well as reciprocal duties on dozens of U.S. trading partners. “The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the three-judge panel of the CIT wrote in May.

Justice and tariffs

The White House immediately condemned the ruling as a “judicial coup” and appealed. On May 29, the appellate court granted the administration a stay, allowing the tariffs to remain in place during litigation. The court heard oral arguments, with Reuters reporting that the 11-judge panel appeared skeptical of the administration’s justification for using the 1977 law. In the meantime, the Trump administration has pursued deals with several major economies, including the European Union, Japan and South Korea. These agreements, worth more than $1 trillion in investment commitments, aim to lower tariff rates while channeling financing into private-sector projects.

The global economy

The DOJ’s latest filing shifted focus away from the legal interpretation of the IEEPA, instead emphasizing the potential fallout if the tariffs were dismantled. Sauer and Assistant Attorney General Brett Shumate argued that unwinding these international agreements could destabilize the global economy. “The President believes that our country would not be able to pay back the trillions of dollars that other countries have already committed to pay, which could lead to financial ruin,” they wrote. “These deals for trillions of dollars have been reached, and other countries have committed to pay massive sums of money. If the United States were forced to unwind these historic agreements, the president believes that a forced dissolution of the agreements could lead to a 1929-style result.” The warning echoes Trump’s own comments. On Truth Social, he recently posted: “If a Radical Left Court ruled against us at this late date, in an attempt to bring down or disturb the largest amount of money, wealth creation and influence the U.S.A. has ever seen, it would be impossible to ever recover, or pay back, these massive sums of money and honor.”

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