Supreme Court ruling against Trump on IEEPA wouldn’t mean the end of all tariffs, experts say
Trade experts predict that even if the Supreme Court rules against President Trump’s use of federal emergency powers to impose high tariffs on America’s trading partners, the tariffs are likely to remain in place. The court hearing on Wednesday raised doubts about Trump’s invocation of the International Emergency Economic Powers Act (IEEPA) to implement tariffs on nearly every country, with justices expressing skepticism about the president’s motives. Trump administration officials argue that the tariffs are necessary to reduce the trade deficit and promote domestic manufacturing.
Ted Murphy, a legal expert at Sidley Austin, believes that even if the Supreme Court strikes down the IEEPA tariffs, Trump will not abandon tariffs altogether. He points out that the president has other legal tools at his disposal to maintain high duties on imports under different tariff authorities. These include Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974, which allow the president to impose tariffs for national security reasons and in response to unfair trade practices, respectively.
However, a ruling against Trump would deal a blow to his economic agenda. Implementing tariffs under Section 232 and 301 is a lengthier and more complex process compared to the broad authority granted by IEEPA. This could delay the imposition of tariffs by months rather than weeks, according to international trade attorney Patrick Childress.
Potential tariff refunds
If the Supreme Court rules against Trump, the U.S. government may be required to refund billions of dollars in tariffs to businesses. Importers have paid nearly $89 billion in IEEPA tariffs through August, according to Customs and Border Protection data. Rick Woldenberg, CEO of Learning Resources, a plaintiff in the case, expressed a desire for refunds, calling the tariffs a “massive tax” imposed by the government.
The U.S. currently has an average tariff rate of 18%, the highest since 1934, according to the Yale Budget Lab. While a ruling against Trump’s use of IEEPA could lead to refunds for businesses, it may also create more uncertainty in trade policy, potentially impacting hiring and business investment, according to economist Grace Zwemmer.
The White House did not respond to inquiries about Trump’s potential use of other laws to impose tariffs if the Supreme Court rules against him. Treasury Secretary Scott Bessent expressed confidence in Trump’s emergency powers and optimism about a favorable ruling from the court.
Experts anticipate a ruling in the case early next year.
