The United States Supreme Court has delivered a significant ruling that could complicate the refund process for tariffs collected during the Trump administration. In a decision issued on March 15, 2024, the court found, by a 6–3 vote, that President Donald Trump exceeded his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs on various trading partners. The ruling raises questions about the estimated $175 billion collected from these tariffs and how refunds will be processed.
Chief Justice John Roberts upheld a lower court’s ruling regarding the improper use of IEEPA, but the Supreme Court did not provide explicit guidance on how the federal government should manage the refunds. In his dissent, Justice Brett Kavanaugh noted that the refund process could become “a mess,” highlighting practical challenges ahead. The case will now return to the Court of International Trade, which will oversee the refund process.
Legal experts anticipate a wave of litigation, as over 1,000 lawsuits have already been filed by importers seeking refunds. The expectation is that the government will require importers to apply for refunds individually, a process that could disproportionately impact smaller businesses. Greg Shaffer, a law professor at Georgetown University, expressed concern that the government may not willingly return the funds. He stated, “The government is probably not going to voluntarily pay back the money it unlawfully took. Rather, they’re going to make everyone request a refund through different procedures.”
Despite the Supreme Court ruling, several tariffs remain in effect. President Trump had previously utilized Section 232 of the 1962 Trade Expansion Act to impose tariffs on steel, aluminum, and other goods. Following the ruling, he announced plans to implement a new 10 percent global tariff for 150 days under Section 122 of the Trade Act of 1974. This statute allows the president to impose duties of up to 15 percent on any country facing significant balance of payments issues without requiring extensive investigations.
Trump’s ongoing trade policies have raised questions among international partners. Wendy Cutler, vice president of the Asia Society Policy Institute, noted that trading partners were aware of the risks involved in Trump’s use of IEEPA. She highlighted that negotiations with Washington were conducted under the assumption that alternative statutes would be employed to maintain tariffs.
Furthermore, the administration continues to explore various legal avenues for imposing tariffs. Shaffer pointed out that options such as Section 301 of the Trade Act of 1974 could be employed to address unfair trade practices. While this option requires an investigation, it grants the president considerable discretion in tariff implementation. However, he warned that any new tariffs would not retroactively apply to previously paid duties.
The Supreme Court’s ruling also places pressure on Congress to clarify the scope of executive trade authority. Roberts emphasized that the president must provide clear congressional authorization for such measures. As a result, both allies and critics of Trump in Congress are being urged to take action. Mike Johnson, House Speaker, stated that Congress and the administration would determine the best path forward. Conversely, Senate Democratic Leader Chuck Schumer welcomed the ruling, asserting it would provide necessary relief for families and small businesses.
The complexities of the refund process could lead to delays, particularly if the collected funds have already been allocated. Babak Hafezi, a professor of international business at American University, explained that if the money has been spent, Congress will need to reallocate funds to facilitate repayment. He commented, “This is not something that will be fixed in 24 hours. It will most likely take years, possibly even a decade, to resolve all the issues this less-than-a-year-old law has imposed on Americans.”
As the situation unfolds, the focus will remain on how the government manages the refund process and the broader implications for trade policy moving forward.
