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As Supreme Court bars some tariffs, Trump imposes new ones

The Supreme Court ruling against the Trump administration鈥檚 sweeping tariffs may ease import taxes on U.S. consumers and businesses, but it also brings new economic uncertainty.

Friday鈥檚 6-to-3 ruling has widespread implications. It means that the White House, with weakened credibility abroad, is seeking other ways to rebuild its tariff wall. It means companies that have paid duties on imported goods will likely sue the federal government for refunds. And it means that consumers might see the prices of those goods fall, even as budgetary pressure to raise taxes goes up.

鈥淭his was an important case to me, more as a symbol of economic national security,鈥� President Donald Trump, appearing combative, said at a briefing at the White House. 鈥淣ow I鈥檓 going to go in a different direction. Probably the direction I should have gone the first time .... which is even stronger than our original choice.鈥�

Mr. Trump immediately invoked an alternative approach, imposing a temporary 10% global tariff under a different statute to replace the canceled ones. And in a Saturday social media post, he went further, pledging to boost the new rate to 15% while his administration pursues additional actions.

It may take weeks or even months for the extent of the economic fallout and Mr. Trump鈥檚 evolving next steps to become clear. But at minimum, the ruling checks the President鈥檚 executive authority, undermining the administration鈥檚 signature tariff policy while triggering legal chaos over $175 billion in potential importer refunds.

Friday鈥檚 court ruling involved the 1977 International Emergency Economic Powers Act (IEEPA), which allows the president to regulate imports during national emergencies. The administration has used it far more expansively than any previous president, says Gautham Rao, a legal historian at American University. 鈥淣o president before Trump would have looked at the conditions in the world and declared an emergency on this scale,鈥欌�� he says.

A majority of the court ruled that Mr. Trump couldn鈥檛.

It鈥檚 a clear ruling against the president鈥檚 ability to unilaterally tax Americans through tariffs, says Alan Wm. Wolff, a senior fellow at the Peterson Institute for International Economics and former deputy director-general of the World Trade Organization. But the court didn鈥檛 address a host of other related questions.

One of those unanswered questions is where tariff policy will go next 鈥� in an economy that has already struggled for a year with the doubts that have attended Mr. Trump鈥檚 bluff, zig-zag course on the scale and scope of tariffs.

Options for new tariffs

Many companies, which have seen prices rise and business slow because of the tariffs, cheered Friday鈥檚 court decision. But the president has vowed to reinstitute the tariffs using other authorities.

Four tariff-related statutes offer options, says Mr. Wolff of the Peterson Institute. But all are problematic for an administration looking to reinstitute sweeping tariffs. Two of those statutes haven鈥檛 been used in at least 50 years. The administration has invoked a third, Section 232 of the Trade Expansion Act of 1962, to restrict imports of steel, aluminum, copper, automobiles, and other products. The fourth, allowing the president to retaliate against foreign unfair trade acts under Section 301 of the Trade Act of 1974, is already being used against China.

Those tariffs are not affected by the high court鈥檚 ruling. But they include requirements, such as formal government investigations of the administration鈥檚 claims, that make them difficult to use to rebuild Mr. Trump鈥檚 tariff wall.

For the near term, the president is trying another route, signing an order Friday under Section 122 of the Trade Act of 1974.

The new global tariff comes 鈥渙ver and above our normal tariffs already being charged,鈥� Mr. Trump said Friday. 鈥淎nd we鈥檙e also initiating several Section 301, and other investigations, to protect our country from unfair trading practices of other countries and companies.鈥�

But action under Section 122 expires after 150 days unless Congress votes to extend it. Whether Congress goes along is another uncertainty. In one symbolic move, some House Republicans voted with Democrats on Feb. 11 to overturn the Trump administration鈥檚 tariffs on Canada.

鈥淲e can expect the tariffs to come back,鈥� says Mr. Wolff. 鈥淭he question is to what extent and whether those tariffs will be judged to be legitimate if there鈥檚 a suit against the government.

鈥淗e will re-impose some鈥� tariffs,鈥� agrees Howard Gleckman, a non-resident fellow at the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution that analyzes tax and budget policies. But 鈥淚 don鈥檛 think he鈥檚 going to reimpose as much as he says he will.鈥�

Other uncertainties

Friday鈥檚 ruling also didn鈥檛 address reimbursements to companies that have paid the IEEPA tariffs. Without a clear path to getting their money, they鈥檙e likely to sue in court, which could lead to litigation that lasts for months or years.

鈥淭here鈥檚 no mechanism鈥� for refunds in a case like this, says Mr. Gleckman. 鈥淎ssuming that they actually refund them, the Trump administration is going to have to figure out exactly how it鈥檚 going to do this. That鈥檚 going to be a rather complex process.鈥�

Then there鈥檚 the budgetary uncertainty.

The federal deficit fell by about 2.8% in fiscal year 2025, in part because of corporate tariff payments estimated at $175 billion to $200 billion. From that, the government netted about $132 billion, according to the Tax Foundation. If the government now has to refund the $175 billion, then the federal deficit, already drowning in red ink, will look even worse, especially as President Trump鈥檚 new income-tax cuts kick in.

Those tax cuts are projected to cost $4 trillion over 10 years, offset by tariff revenues that were supposed to reach $1.4 trillion during that same period. But the import levies that were just overturned accounted for about three-fourths of the expected revenue from tariffs. For the budget, much will depend on whether new tariffs from Mr. Trump will stick 鈥� and replace the revenue the court ruling has taken away.

Staff writer Victoria Hoffmann contributed to this report.

Editor's note: This article was updated Feb. 21, the date of initial publication, with news that President Trump pledges to boost a new global tariff to 15%.