The United States will stop collecting tariffs that the Supreme Court ruled illegal. The US Customs and Border Protection (CBP) announced that it will halt these tariff collections at 12:01 am EST (5:01 GMT) on Tuesday, more than three days after the Supreme Court struck them down.
In a message sent to shippers via its Cargo Systems Messaging Service (CSMS), CBP said it would deactivate all tariff codes tied to President Donald Trump’s earlier orders under the International Emergency Economic Powers Act (IEEPA). “CBP will provide additional guidance to the trade community through CSMS messages as appropriate,” the agency said.
US stops collecting tariffs ruled illegal by Supreme Court
The end of IEEPA tariff collection comes just as Trump introduced a new 15% global tariff under a different legal authority. This new tariff is meant to replace the ones that the Supreme Court invalidated last Friday. CBP did not explain why it continued to collect the tariffs at ports for days after the Court’s ruling. The agency also did not mention whether importers could get refunds for tariffs already paid.
The notice clarified that stopping IEEPA tariffs does not affect other Trump-era tariffs, including those imposed under the Section 232 national security law or the Section 301 unfair trade practices statute.
Impact on US treasury revenue
Economists at the Penn-Wharton Budget Model have estimated that IEEPA tariffs brought in more than $500 million in revenue per day. Reuters reported that the Supreme Court decision potentially opens the door to refunds totaling more than $175 billion, based on these estimates. The IEEPA tariffs, which targeted imported goods from multiple countries, had become a major source of daily revenue for the US Treasury.
Trump’s tariff changes explained: What it means for India
Immediately after the SC verdict, Trump announced a “temporary surcharge” of 10% on all imported goods for the next 150 days. Hours later, he raised the tariff to 15%, effective immediately. White House officials said that all trade agreements would now “reset” to the 10% rate from February 24, but Trump’s 15% increase came hours later, creating confusion about when it would be applied.
MFN Base Rate – India’s exports were initially subject to a Most Favoured Nation (MFN) tariff of 3.5% on average. This is the standard U.S. duty that applies to most items not covered by special trade measures.
Trump’s New Surcharge – The 15% surcharge announced by Trump is added on top of the MFN rate. This pushes the average tariff on Indian goods to about 18.5%, slightly higher than the 18% under the interim trade deal announced earlier in February.
Trade Deal Confusion – The interim India-US trade deal relied on IEEPA to set its 18% rate. With IEEPA invalidated by the Supreme Court, the legal foundation of the deal is now unclear. Even though both governments say the deal is “mutually beneficial,” the actual duties Indian exporters pay could be higher in practice.
Short-Term Uncertainty – The tariffs have changed multiple times in just a few days. First the Supreme Court ruling lowered duties to MFN levels, then Trump announced 10%, and finally 15%. Indian exporters now face unclear costs for shipments and pricing adjustments, at least until the U.S. issues a final, legally validated tariff schedule.
India’s Union Minister Pralhad Joshi said New Delhi will study the Supreme Court ruling before issuing an official response.