In a landmark 6-3 decision handed down on Friday, the U.S. Supreme Court ruled that several of President Donald Trump's tariffs on foreign imports, imposed under the International Emergency Economic Powers Act (IEEPA), were unlawful. The ruling, which specifically targeted duties levied using the 1977 IEEPA—a law originally designed to restrict presidential emergency powers to threats originating outside the United States—marks a significant check on the administration's aggressive trade policies. While the decision provides some relief to importers and small businesses burdened by billions in additional costs, it leaves many questions unanswered about refunds and the broader trade landscape.
The tariffs in question, announced last year, included steep duties on goods from Canada, Mexico, and China, as well as so-called "reciprocal" tariffs applied to imports from nearly every other country. The administration also used the IEEPA to eliminate the de minimis exemption, which had previously allowed low-value packages to enter the U.S. duty-free. No prior president had invoked the IEEPA for such widespread tariff actions, raising legal challenges almost immediately from affected businesses and trade groups.
Justice Brett Kavanaugh, joined by Chief Justice John Roberts and Justice Amy Coney Barrett in dissent, argued that the majority's interpretation could complicate national security efforts. In his written dissent, Kavanaugh noted that the U.S. Treasury "may be required to refund importers who paid tariffs under the IEEPA," warning that the process could become a "mess." The New York Times reported that outstanding refund requests could total as much as $120 billion, though consumers—who often bear the ultimate cost of tariffs through higher prices—are unlikely to see any direct reimbursements.
The Supreme Court's ruling does not extend to other Trump-era tariffs, such as those on steel and aluminum or industry-specific duties imposed under separate authorities. These measures, which have reshaped global supply chains since their introduction in 2018, remain in place. At a White House press briefing on Friday, President Trump expressed frustration with the decision, criticizing the majority of justices while singling out Kavanaugh for praise. "These guys don't get it," Trump said, according to reports from the briefing. He vowed to pursue additional blanket tariffs and launch investigations into unfair trade practices, signaling that the administration's protectionist stance is far from over.
Monica Gorman, managing director at Crowell Global Advisors and a former manufacturing policy expert under President Joe Biden, explained in an email to The Verge that the ruling shifts the battle to lower courts. "The issue will now go to the Court of International Trade and could take months to sort out," she said. Gorman pointed to the president's recent announcement of Section 122 tariffs, set to take effect almost immediately at a 10 percent rate. Although limited to 150 days without congressional approval, these measures could serve as a bridge while the administration explores options under Section 301 and other statutes. "Bottom line, industry should expect a continued high tariff environment for the foreseeable future," Gorman added.
Business groups hailed the decision as a step toward stability. The National Retail Federation issued a statement saying the ruling "provides much-needed certainty for U.S. businesses and manufacturers" and urged the creation of "a seamless process to refund the tariffs to U.S. importers." Small businesses, which have been hit hardest by the unpredictable tariff regime, were quick to celebrate but emphasized the need for swift action on repayments.
The administration’s only responsible course of action now is to establish a fast, efficient, and automatic refund process that returns tariff money to the businesses that paid it. Small businesses cannot afford to wait months or years while bureaucratic delays play out, nor can they afford expensive litigation just to recover money that was unlawfully collected from them in the first place. These businesses need their money back now.
This statement came from We Pay the Tariffs, a coalition representing hundreds of small U.S. companies that rely on imported components. Formed in response to the initial wave of tariffs, the group has been vocal since last year, highlighting how duties on everyday goods like electronics parts and apparel have squeezed profit margins and forced price hikes on American consumers.
From the outset, Trump's tariff strategy has been wielded as leverage against foreign governments and multinational corporations, often leading to abrupt changes in policy. Tariffs on specific countries were lifted or adjusted when trading partners made concessions, creating a volatile environment for importers. Businesses reported scrambling to reroute supply chains, with some stockpiling inventory in anticipation of escalations. The chaos peaked last year when the de minimis exemption was revoked, affecting e-commerce giants and small online retailers alike by subjecting even minor cross-border shipments to duties.
Even with the Supreme Court's intervention, uncertainty lingers. The Port of Los Angeles, one of the nation's busiest gateways for imports, informed CNN that it anticipates an influx of cargo ships as U.S. companies rush to import goods before potential new tariffs materialize. This surge could exacerbate port congestion, reminiscent of bottlenecks seen during the early days of the trade war in 2018 and 2019.
Economist Kathryn Anne Edwards, a policy consultant, described the ruling's economic ripple effects in an email to The Verge. "Taking control of tariffs out of [Trump’s] hands is unequivocally good for the economy," she said. However, Edwards cautioned that the decision itself might cause short-term disruptions. "That’s not to say the ruling won’t cause harm, but he was using the American consumer as leverage." She highlighted how tariffs have historically passed costs directly to U.S. buyers, with studies showing little relief from foreign exporters absorbing the burden.
Edwards also warned of potential political fallout. "I think the political blowback could be incredible, given that companies are poised to see a refund, but consumers are not," she said. Public approval of trade policies has already reached historic lows, according to recent polls, amid rising prices for everything from cars to clothing. Many Americans, she noted, may perceive the refunds as a corporate windfall at their expense, further eroding trust in economic institutions.
The broader context of Trump's second term underscores the ruling's significance. Since taking office in January 2025, the president has doubled down on protectionism, framing tariffs as essential to reviving American manufacturing. Yet critics, including economists from both parties, have long argued that such measures distort markets and invite retaliation. China, for instance, imposed counter-tariffs on U.S. agricultural exports in response to earlier duties, costing farmers billions and prompting federal bailouts.
Looking ahead, the administration's pivot to alternative legal pathways could prolong the trade skirmishes. Section 301 of the Trade Act of 1974, which allows tariffs in response to unfair practices, has already been used extensively in the past. Combined with the new Section 122 measures, these tools might replicate much of the IEEPA's impact, albeit with more oversight. Legal experts anticipate a flurry of challenges in the Court of International Trade, potentially dragging resolutions into 2026 or beyond.
For small businesses like those in Appleton, Wisconsin—home to manufacturers dependent on imported machinery parts—the ruling offers a glimmer of hope amid ongoing struggles. Local chambers of commerce have echoed national groups in calling for expedited refunds, noting that delayed cash flow could force layoffs or closures. As one importer told local reporters last year, "These tariffs aren't hurting China; they're hurting us right here in the heartland."
Ultimately, while the Supreme Court's decision curtails one avenue for unilateral action, it does little to resolve the underlying tensions in global trade. Consumers and businesses alike brace for a "new normal" of elevated costs, with economists predicting that companies have scant incentive to lower prices even if tariffs ease. As Edwards put it, the American public remains the unintended casualty in this high-stakes game of economic brinkmanship.
The fight over tariffs, a defining feature of Trump's economic agenda, is thus far from concluded. With refunds in limbo and new duties on the horizon, the coming months will test the resilience of U.S. supply chains and the patience of an electorate weary of trade wars.