What happens now that Trump's tariffs have been struck down by the Supreme Court
The Supreme Court did not specify how the $240 billion to $300 billion in tariff revenue already collected should be handled
The US Supreme Court on Friday ruled 6-3 that President Donald Trump exceeded his authority by imposing widespread tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977, raising questions about refunds, future trade policy, and global markets.
Immediate impact
The ruling invalidates tariffs imposed under the IEEPA, including a 15% levy on European Union goods and a 20% tariff on imports from Vietnam. Sector-specific tariffs on steel, aluminum, and automobiles, implemented under separate legal authorities, remain in place.
Keep updated, follow The Business Standard's Google news channel
US shoppers are unlikely to see immediate relief. Analysts note that once prices rise, they rarely fall quickly, and companies may be cautious due to ongoing trade uncertainty. The Yale Budget Lab estimated that the tariffs have already cost the average household roughly $1,800 in the short term, says the Washington Post.
Refunds
The Supreme Court did not specify how the $240 billion to $300 billion in tariff revenue already collected should be handled. Most of this cost has been borne by US firms and ultimately passed on to consumers through higher prices. Erin McLaughlin, senior economist at the Conference Board, said that "many studies show that US firms have paid 90% of that," with much of the burden transferred to shoppers.
Even if the government were forced to repay importers, McLaughlin said it "would not be paid back soon." Justice Brett Kavanaugh called the refund process a likely "mess," and Trump dismissed the idea, saying on Friday: "It's not [being] discussed. We'll end up being in court for the next five years," says the Guardian.
Trade lawyers said importers are likely to recover funds eventually, but the process will be complex. Joyce Adetutu, a partner at Vinson + Elkins law firm, said: "It's going to be a bumpy ride for awhile." Legal notes from Clark Hill indicate that refunds will involve the US Customs and Border Protection, the specialized Court of International Trade in New York, and other lower courts. Adetutu added: "The amount of money is substantial. The courts are going to have a hard time. Importers are going to have a hard time."
Individual consumers are highly unlikely to receive rebates, as tariffs are paid directly by importing companies rather than shoppers.
Administration response
Trump called the decision a "disgrace" but signaled he will continue his trade strategy. The administration plans to:
- Use the Trade Act of 1974 (Section 122) to impose a new 10% global tariff. The law allows temporary tariffs up to 15% for 150 days to address international payment imbalances.
- Launch investigations into "unfair trading practices" to justify future country-specific tariffs.
- Treasury officials estimate these measures could result in "virtually unchanged tariff revenue" for 2026.
Global and corporate reaction
Foreign governments and industry groups are monitoring the developments. The UK said its preferential deals on steel, pharmaceuticals, and automobiles are unaffected. The European Commission is analyzing the ruling, while German industry leaders described it as a win for a "rules-based trade order."
Many companies are delaying supply chain changes until the White House clarifies its long-term trade approach. Analysts warn that ongoing uncertainty could affect investment and planning decisions.
The Supreme Court's ruling clarifies the limits of presidential authority on trade but leaves unresolved questions about refunds, future tariffs, and how companies and consumers will be affected. Businesses are likely to pursue complex legal paths for refunds, while consumers will probably see no direct compensation.
