The US Supreme Court struck down sweeping reciprocal tariffs imposed by President Donald Trump on Friday — paving the way for a nearly $175 billion ‘refund’ from the government. The POTUS had announced stringent levies against nearly 185 nations last year and separate curbs linked to international trade. Many businesses have also raised prices and made adjustments to offset higher costs since the government took over 13 months ago. The administration has accrued more than $200 billion in tariffs during this time.
According to an official release, the US had collected “more than $200 billion in tariffs” between January 20 and December 15 last year. The Supreme Court ruling has made approximately $133 billion to $175 billion in previously collected tariffs illegal — with the Trump administration now obligated to return the money. Many businesses have already launched lawsuits seeking repayment and others are expected to follow suit. But efforts to claw back the money is likely to be complicated due to lack of clear directions from the court.
No relief for some industries
Matters came to a grinding halt on Friday as the apex court ruled 6-3 that the International Emergency Economic Powers Act invoked by Trump did not give him authority to tax imports — a power that belongs to Congress. But there will be zero relief for some industries since the decision only affects tariffs imposed under that law. According to an AP News update citing the Home Furnishings Association, many items including steel, upholstered furniture, kitchen cabinets and bathroom vanities will see unchanged tariffs.
The Supreme Court has sent the case back to the Court of International Trade to sort out next steps — a process expected to set off a scramble by companies to demand refunds. Penn-Wharton Budget Model economists told Reuters that more than $175 billion in US tariff collections are subject to potential refunds.
Trump announces fresh tariffs
The pause in tariffs was short lived as the POTUS issued a proclamation within hours of the Supreme Court verdict to levy a 10% tariff on “all articles imported into the United States”. Members of the Trump cabinet have also indicated plans to “invoke alternative legal authorities” to replace the tariffs imposed last year through the International Emergency Economic Powers Act.
“The Court did not rule against President Trump’s tariffs. Six justices simply ruled that IEEPA authorities cannot be used to raise even $1 of revenue. This administration will invoke alternative legal authorities to replace the IEEPA tariffs. We will be leveraging Section 232 and Section 301 tariff authorities that have been validated through thousands of legal challenges,” said Treasury Secretary Scott Bessent.