'Financial ruin': Trump's White House is terrified of losing this lawsuit

U.S. President Donald Trump boards Air Force One, as he departs for Scotland, at Joint Base Andrews, Maryland, U.S., July 25, 2025. REUTERS Evelyn Hockstein

New Republic writer Matt Ford says the DOJ must be genuinely frightened of losing its tariff lawsuit to be making such terrible court arguments.

V.O.S. Selections v. Trump is a suit from a group of small businesses who are challenging President Donald Trump’s authority to levy tariffs via the International Emergency Economic Powers Act of 1974. The coalition argues that Trump’s extensive restrictions on nearly every imported good reaches beyond what Congress has authorized by law.

According to the shrill, sloppy arguments the DOJ is now making in that case, Ford says the DOJ may be predicting a loss.

“One rather clear sign of nerves is that Solicitor General D. John Sauer … sent an unusual letter to the Federal Circuit panel reviewing the case earlier this week,” said Ford.

Rule 28(j) letters usually update courts about “pertinent” events that could be relevant to litigation. They sometimes pop up after new laws get passed affecting ongoing lawsuits. But Ford this one was a catch-all of desperate arguments.

“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,” Sauer warned the court. But Ford says this ignores the fact that hard-hit U.S. consumers are paying the tariff fees, not national trading partners. And the amount is certainly not in the “trillions.”

“One year ago, the United States was a dead country, and now, because of the trillions of dollars being paid by countries that have so badly abused us, America is a strong, financially viable, and respected country again,” Sauer wrote, mimicking the “dead country” description Trump used at a Friday press scrum on Air Force One.

“This is not a legal argument,” said Ford. “What Sauer appears to be suggesting is that the court would be responsible for any negative economic consequences that should befall the country if it rules against the tariffs’ legality. That is doubtful on the merits.”

Ford said most indicators actually suggest the nation is heading for a recession thanks to the uncertainty and higher costs from Trump’s tariffs. “If anything, the markets would experience a modest boom if Trump’s tariffs could no longer be collected,” Ford argues.

But Sauer had more.

“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,” Sauer claimed, invoking an argument that Ford said is “unworthy of a high-ranking Justice Department official.”

“You do not need to be an economist to know that a Great Depression won’t happen if the Federal Circuit strikes down tariffs that did not exist six months ago,” said Ford.

“More than anything else, it shows how scared the Justice Department is (and the Trump appointees who staff it are) that Trump might lose this case,” said Ford. “… [A] solicitor general who was confident in the strength of their argument and the validity of the executive branch’s actions would not stoop so low as to telling federal judges that it will blame them for any negative consequences of their ruling. Like all bullying tactics, this one comes from a place of fear, not strength.”

Read the New Republic report at this link.