The US Supreme Court has ruled that President Donald Trump exceeded his authority by imposing global tariffs using the International Emergency Economic Powers Act (IEEPA). In a 6-3 decision, the court affirmed that such tariffs could not be applied without Congress’s authorization.
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Trump's original tariffs targeted goods from China, Mexico, and Canada, citing fentanyl trafficking as an emergency. Later, he expanded these levies to nearly every country, claiming the US trade deficit posed a significant threat. However, the court emphasized that creating taxes is a power reserved for Congress and that IEEPA was not intended for revenue generation.
New Temporary Tariffs
In response to the court ruling, Trump signed a proclamation under Section 122 of the 1974 Trade Act, allowing a new 10% global tariff on imports, subsequently raised to 15%. Section 122 permits a temporary tariff for up to 150 days, after which Congress must intervene. However, the law may allow the president to let tariffs lapse and reintroduce them by declaring a new emergency, as noted by the Cato Institute.
The administration is also exploring tariffs under Section 301 of the Trade Act of 1974, which authorizes tariffs on countries with discriminatory trade practices. Additionally, Section 232 of the Trade Expansion Act of 1962, used by Trump in his first term, allows for tariffs on imports that threaten national security after an investigation.
Treasury Secretary Scott Bessent stated that combining Section 122 tariffs with enhanced Section 232 and Section 301 tariffs would ensure continued tariff revenue. This strategy seeks to compensate for the revenue loss from the IEEPA tariffs.
Refunds and Legal Implications
While the Supreme Court deemed the IEEPA tariffs unlawful, it offered no guidance on refunds. Trump predicts extended litigation over potential refunds. Larger companies might benefit more from refunds due to the complex claims process, leaving smaller businesses at a disadvantage.
Over a thousand businesses have already requested tariff refunds, with numbers expected to increase. Illinois Governor JB Pritzker urged the White House to issue $1,700 refund checks to affected households. Trump previously hinted at the possibility of rebate checks.
Current Tariff Landscape
The new tariffs, effective February 24, apply to all imports into the US. Countries with existing trade deals, such as the UK, India, and the EU, are not exempt from these tariffs under Section 122. The Trump administration expects these countries to continue honoring their trade agreements.
Certain goods, including critical minerals, energy products, pharmaceuticals, and items under the USMCA agreement, are exempt from the new taxes. Informational materials, donations, and personal baggage are also exempt.
Trump has retained tariffs on low-cost goods by eliminating the de minimis exemption, which allowed goods valued at $800 or less to enter the US duty-free.
Future Considerations
The tariffs aim to address international payment issues and rebalance American trade, according to the White House. The strategy reflects Trump’s emphasis on leveraging tariffs to boost the US economy by channeling revenue into the Treasury.
The ongoing trade and tariff dynamics highlight the complex interplay between executive actions, legislative powers, and international trade relations. As the situation evolves, businesses and consumers alike face uncertainty regarding the financial implications and potential refunds.
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Adapted by ASEAN Now · Source · 21 Feb 2026