WASHINGTON — The Supreme Court’s ruling last week striking down President Donald Trump’s sweeping emergency tariffs has triggered a scramble among businesses and Democrats seeking refunds for the roughly $130 billion in import duties collected, while the White House signaled it intends to pursue new tariffs through alternative legal avenues.
The 6-3 decision, handed down February 20, found that Trump exceeded his authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to unilaterally impose tariffs, a move that had upended global trade flows. While the ruling rolled back the “reciprocal” tariffs imposed last April, as well as levies on China, Mexico, and Canada linked to fentanyl imports, it did not invalidate all existing tariffs. Tariffs enacted under Section 232 of the 1962 Trade Expansion Act – those based on national security concerns for industries like steel, aluminum, and automobiles – remain in place, as do tariffs imposed during Trump’s first term under Section 301 of the Trade Act of 1974 targeting certain Chinese imports. Learning Resources, Inc. V. Trump
“The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” Chief Justice John Roberts wrote for the majority. “In light of the breadth, history, and constitutional context of that asserted authority, he must identify clear congressional authorization to exercise it.”
Democrats have seized on the ruling, arguing that the collected tariffs represent an illegal tax on American consumers. Senator Elizabeth Warren (D, Mass.) posted on X Saturday, “Donald Trump stole your money with his illegal tariffs — and you paid higher prices on everything from housing to groceries.” She called for the funds to be returned. Senate Democrats have since announced legislation to mandate full refunds with interest, totaling around $175 billion, to businesses that paid the duties, with the expectation that some savings would be passed on to consumers. CNN
The Trump administration, however, has shown no intention of issuing refunds. Trump told reporters the issue “could be in court for up to five years.” Justice Brett Kavanaugh, in a dissenting opinion, echoed this sentiment, noting that “refunds of billions of dollars would have significant consequences.” CNN
U.S. Trade Representative Jamieson Greer announced Friday that the administration plans to launch “accelerated” investigations under both Section 232 and Section 301, targeting batteries, cast iron, electrical grid equipment, telecom equipment, plastics, industrial chemicals, and other sectors. These investigations are expected to cover “most major trading partners” and address concerns ranging from industrial overcapacity to forced labor and pharmaceutical pricing. Chatham House
Trump has similarly invoked Section 122 of the 1974 Trade Act, imposing a 10% tariff on all countries, which he subsequently raised to 15%. These tariffs are capped at 15% and can only remain in effect for 150 days, and are likely to face legal challenges. Senate Democrats have vowed to block any attempt to extend them beyond that timeframe. BBC
The ruling has thrown existing trade agreements into uncertainty. The U.K., Japan, South Korea, and several European Union countries that had negotiated lower tariff rates with the U.S. May now face higher duties. Conversely, China, Brazil, and India could benefit as the 15% tariff replaces the previously higher IEEPA levies. Bernd Lange, Chair of the European Parliament’s Committee on International Trade, described the situation as “pure tariff chaos.” The EU has paused ratification of its trade deal with the U.S. Pending clarification from Washington. Chatham House
Japan, which pledged $550 billion in U.S. Investment in exchange for tariff reductions on autos and auto parts, has signaled it will proceed with its planned investments but has requested assurances from the U.S. Government that its position will not be worsened by the new tariffs. South Korea, which committed $350 billion to the U.S., also intends to honor its trade deal despite Trump’s recent threats to reimpose higher tariffs. Chatham House
Trump warned on Monday that any country attempting to “play games” with the Supreme Court decision would face “a much higher Tariff, and worse, than that which they just recently agreed to.” BBC
