The US Supreme Court ruled (6–3) that President Donald Trump lacked authority under IEEPA to impose broad tariffs, triggering likely refund mechanics, near-term policy substitution (Section 122),and renewed volatility for import planning, contracts, and sourcing decisions.
The Supreme Court ruled that IEEPA does not grant the president authority to implement the administration’s wide-ranging “Liberation Day” tariffs imposed since April 2025. The decision effectively invalidates those tariffs and disrupts a central pillar of US trade policy over the past nine months.
For global supply chains, the significance isn’t only the legal outcome—it’s the operational reset: landed-cost models, supplier allocations, and shipment timing decisions built around IEEPA tariff assumptions now need immediate recalibration.
IEEPA-based tariffs ranged from 10% to 50% depending on country,with most at 15% or lower. With the ruling, some paused or delayed US-bound volumes could re-enter the pipeline as pricing and pass-through assumptions stabilize.
A New York Federal Reserve paper cited in the report found roughly 90% of the added tariff costs were passed on to consumers and businesses—reinforcing why demand elasticity and retail pricing resistance became binding constraints for importers.
A major downstream question is how US Customs and Border Protection (CBP) will refund tariffs collected over the last nine months. The ruling did not specify the process, and trade advisors expect the US Court of International Trade to determine how refunds will be executed.
Notably, CBP had already outlined a new electronic refund processin early January—seen by practitioners as a signal that alarge-scale refund pathway was being prepared.
The administration has indicated it will pursue alternate tariff authorities. The most immediate substitute signaled is Section 122, including an immediate 10% “global” tariff, presumably across trading partners.
Section 122 can be used to address a “large and serious” balance-of-payments deficit via import surcharges (up to 15%), quotas, or both. The constraint: measures expire after 150 days, and repeated extensions could draw scrutiny.
Section 338 could allow tariffs up to 50% on imports from countries that discriminate against US commerce, but it is widely viewed as outdated and effectively superseded by other tools.
Section 301 (used against China in Trump’s first term) requires an investigation by the US Trade Representative before tariffs are imposed—slower, but procedurally durable.
Expanded Section 232 tariffs remain a viable lever when the administration frames categories or origins as national-security risks.
This decision underscores a defining macro trend: trade policy volatility is now a core planning variable, not an exception. Importers and logistics leaders should treat tariff exposure likefuel price risk—requiring continuous monitoring, contractual protections, and scenario-based routing/ sourcing strategies.
