Of course, we have no idea what Trump will decide to do. But - also of course - there's some likelihood that he'll largely ignore the ruling. Especially considering the lack of any real order or guidance coming from the ruling.
The justices expressed skepticism in November that the administration could impose sweeping tariffs under a federal law granting emergency powers.
The Supreme Court ruled Friday that President Donald Trump doesn’t have the tariff authority he claimed, in a decision authored by Chief Justice John Roberts.
The ruling addressed a key Donald Trump policy as the high court considers the scope of presidential power across several cases this term. The court’s Republican-appointed majority has broadly empowered the Republican president but has occasionally checked him.
The justices agreed in September to consider the tariff issue on an expedited basis, granting review in two separate cases, both of which the administration lost in the lower courts. One of them came through a specialized trade and appeals court, and the other came through a general federal court in Washington.
When the high court heard oral arguments in November, the justices sounded skeptical of the administration’s position that Trump was authorized to impose the sweeping tariffs under a federal law called the International Emergency Economic Powers Act (IEEPA).
The president cited the law when he announced the so-called trafficking tariffs on products from Mexico, Canada and China due to what he said was their failure to stop fentanyl from coming to the United States. He also cited that law when he announced the so-called reciprocal tariffs on “all trading partners.”
At the November hearing, Trump appointee Amy Coney Barrett questioned U.S. Solicitor General John Sauer on the latter, worldwide tariffs. “And so is it your contention that every country needed to be tariffed because of threats to the defense and industrial base? I mean, Spain, France? I mean, I could see it with some countries, but explain to me why as many countries needed to be subject to the reciprocal tariff policy as are,” Barrett said. Sauer said “asymmetric treatment” from other countries “is a global problem.”
In the case called Trump v. V.O.S. Selections, the Federal Circuit ruled that Trump overstepped his authority in attempting to rely on IEEPA. “The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs,” the circuit court wrote in a divided ruling that split the court 7-4, though not strictly along the party lines of the presidents who appointed the judges.
In the other case, Learning Resources v. Trump, U.S. District Judge Rudolph Contreras, an Obama appointee, wrote that if Congress “had intended to delegate to the President the power of taxing ordinary commerce from any country at any rate for virtually any reason, it would have had to say so.” He wrote that no other president “has ever purported to impose tariffs under IEEPA.”
And it's going to be a big fucking mess just to unwind all the refunds on tax payments and surety bonds and all the other collateral shit. Get ready for some more major fuckery as the grifters flock to the smell of even more easy money at taxpayer expense.
So, who exactly is losing here?
- The Supreme Court ruling that many of President Trump’s tariffs are illegal will lead to a process where billions of dollars in refunds will be sought by companies.
- Importers also laid out billions for bonds and collateral required by U.S. Customs and Border Protection to guarantee payment of trade duties.
- The ruling provided no guidance on refunds, and in his dissent, Justice Brett Kavanaugh made a point of noting this and he referred to comments during the oral arguments that the refund process may be a “mess.”
Companies large and small may be eligible for refund payments that in total could reach hundreds of billions of dollars, but trade attorneys have warned that tariff refunds could be delayed, depending on how U.S. courts rule and how U.S. Customs goes about issuing the payments.
Trump wrote in a social media post on Jan. 12 that “it would take many years to figure out what number we are talking about and even, who, when, and where, to pay.” He added: “It would be a complete mess, and almost impossible for our Country to pay.”
Record tariff revenue has been recorded by the U.S. government, with tariff collections surging in January to $30 billion and reaching a year-to-date total of $124 billion. That is up 304% from the same period in 2025.
The ruling was silent on whether tariffs that have been paid under the higher rates will need to be refunded.
But in his dissent from the majority SCOTUS decision on Friday, Justice Brett Kavanaugh wrote, “the Court’s decision is not likely to greatly restrict Presidential tariff authority going forward. But the Court’s decision is likely to generate other serious practical consequences in the near term. One issue will be refunds. Refunds of billions of dollars would have significant consequences for the U. S. Treasury. The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers. But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”
In the lead-up to the decision, importers and customs experts have been pushing back on claims about refunds being a “messy” process, saying that because the tariffs being paid are itemized, the process for refunding the money should be straightforward.
But importers betting on a cash infusion from tariff refunds should be aware there’s no set timeline and any rush for refunds could overwhelm the system and likely lead to long delays, Tim Keeler, partner and co-leader of international trade at Mayer Brown and former chief of staff for U.S. Trade Representative Susan Schwab, recently told CNBC.
The Court of International Trade is typically in charge of refund processes.
Companies will not only be seeking billions in tariff refunds, but billions are tied up in customs bonds and collateral. Tariffs not only lead to additional import taxes, but by inflating the cost of the products, result in the need for importers to increase the value of customs bonds the government requires them to hold.
International trade experts told CNBC that with some tariffs increasing from 10%-25% or more for certain products, importers are facing customs bond amounts that now range from the minimum bond amount by regulation of $50,000 to as high as $450 million.
The increase in bond values have left some companies forced to put up additional money in the form of collateral to ensure they could pay the tariffs.
The rise in tariffs and related need for bonds and collateral has led to a historic number of “bond insufficiencies.” U.S. Customs told CNBC they identified over 24,000 customs bond “insufficiencies” valued at nearly $3.6 billion. That’s double the 2019 level when insufficiencies first soared due to Trump’s first-term tariffs under Section 301 of the 1974 Trade Act.
Importers have told CNBC because tariffs are itemized, as are their customs bonds and collateral documentation, in theory they should be able to receive their refunds quickly. However, trade attorneys also say it may also be difficult for companies to get any refunds on bond overpayment or collateral quickly because the insurers will want to make sure they are not exposed to any tariff payments.
Vincent Moy, international surety leader for Marsh Risk, recently told CNBC that companies should expect some lag time in receiving these customs bond funds due to insurance paperwork requirements. The insurance company will need to verify and audit the paper trail before it releases any collateral.
Some sureties have collateral return review procedures that can take 30 to 60 days for them to go back to underwriting to review. Many small and medium-sized businesses were expected to be reaching out to their insurers ahead of the decision to get the process of review started. “If you are hoping that the collateral will just be returned in due course, the squeaky wheel may make this happen a little bit faster,” Jennifer Diaz, board-certified international attorney at Diaz Trade Law, recently told CNBC.
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