If the Supreme Court lets a lower court’s decision stand, and tariffs are ruled unlawful, companies—and consumers—could start asking that the money they paid be returned.
Key Facts
The Supreme Court granted the Trump administration’s request to take up the tariff dispute, after a federal appeals court found the president’s sweeping fees on imports from nearly all foreign countries are unlawful and Trump exceeded his authority in imposing them.
The Federal Circuit and Court of International Trade have both ruled Trump’s “Liberation Day” tariffs illegal, finding the law that Trump used to justify them—the International Emergency Economic Powers Act (IEEPA)—doesn’t actually allow him to impose tariffs, let alone such broad ones.
Treasury Secretary Scott Bessent has framed the legal challenge, and any delay in resolving it, as potentially “catastrophic” for the government and the economy, and Trump warned Tuesday that if the Supreme Court “make[s] the wrong decision, it will be a devastation for our country.”
A Supreme Court decision against the tariffs would eliminate a key way Trump has been boosting government revenue—already taking in billions of dollars—and could also impact the White House’s negotiations with other countries, as Trump and his officials have used tariffs as a negotiating tactic for trade deals and foreign policy.
But a ruling against tariffs would also have significant impacts for businesses impacted by the tariffs, who may not only not have to pay tariffs going forward, but could also recoup money they’ve paid.
A ruling against tariffs could lead to a rush of companies asking the government to refund money they’ve already paid on “Liberation Day” tariffs, which could have broader impacts on the economy.When Could The Supreme Court Rule?
The Supreme Court said Tuesday it will hear oral arguments in the tariff litigation in the first week of November, and will consolidate multiple lawsuits brought by small businesses and Democratic-led states. It’s unclear when a final ruling will come out, though the justices’ decision to take up the case so quickly suggests a decision could come out sooner than the court’s typical time frame of waiting several months before it issues a decision. The tariffs are expected to remain in effect while the case is pending.Will Any Tariffs Stay In Effect If The Supreme Court Overturns Them?
The tariff case before the Supreme Court specifically concerns the “Liberation Day” tariffs, or “reciprocal tariffs,” that stem from Trump’s April announcement imposing tariffs on nearly all foreign countries. These tariffs are general tariff rates that apply to nearly all goods from foreign countries, with tariff rates set by country. The president also used IEEPA for his tariffs against Mexico, Canada and China, which he imposed due to the countries’ purported failing to address the flow of fentanyl into the U.S., so those tariffs would also be affected by a ruling declaring Trump can’t impose tariffs under IEEPA. The lawsuit would not impact other tariffs Trump separately imposed on specific industries or goods, such as automobile tariffs or tariffs on steel and aluminum, as those were justified under different federal statutes.
