In a landmark decision with profound implications for global commerce, the U.S. Supreme Court has invalidated the Trump administration’s use of emergency powers to impose sweeping import tariffs. The ruling determined that the 1977 International Emergency Economic Powers Act did not provide legal authority for the broad tariff regime implemented by the former president.
This judicial reversal triggers a complex refund mechanism that could return more than $175 billion to thousands of American businesses that paid tariffs under the contested program. According to economists from the Penn-Wharton Budget Model, companies across consumer goods, automotive, manufacturing, and apparel sectors—particularly those reliant on global supply chains—now face strategic decisions regarding pursuit of reimbursement claims.
The immediate market response saw stock markets in both the United States and Europe rally, with luxury brands and import-dependent companies experiencing significant gains. Shares of LVMH, Hermès, and Moncler all climbed following the announcement.
Legal experts caution that the refund process will be administratively complex and time-consuming. More than 1,800 tariff-related lawsuits have already been filed with the U.S. Court of International Trade since April—a dramatic increase from fewer than two dozen cases throughout 2024. Prominent plaintiffs include subsidiaries of Toyota, Costco, Goodyear Tire & Rubber, Alcoa, Kawasaki Motors, and EssilorLuxottica.
Despite this victory for free trade advocates, uncertainty persists within the business community. Trump administration officials have indicated they will pursue alternative legal authorities to implement tariffs, including statutes addressing unfair trade practices and national security concerns. Fitch Ratings’ head of U.S. economics, Olu Sonola, noted that “the odds that tariffs reappear in a revised form remain meaningful,” creating ongoing operational and legal challenges.
The ruling highlights how approximately 90% of tariff costs were ultimately borne by American consumers and companies, according to Federal Reserve Bank of New York research, contradicting administration claims that foreign entities absorbed the financial impact.
Many businesses, anticipating a protracted refund process, have already begun selling their rights to future refunds to external investors at discounted rates. Meanwhile, companies like German logistics firm DHL are developing technological solutions to streamline potential reimbursement procedures for their clients.