Background on the Case and Key Players
Executives from companies, customs agents, and trade lawyers are preparing for a Supreme Court ruling on the legality of President Donald Trump’s tariffs, and a potential dispute to seek refunds of $150 billion from the U.S. government for tariffs already paid if Trump loses.
The expectation that the court will annul the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977 increased after the November arguments in the case, when conservative and liberal justices expressed skepticism about whether that law granted Trump the authority to impose tariffs.
Uncertainty Surrounding Refunds
The court is expected to rule this Friday, but as usual, it has not disclosed which cases it will address.
Some companies anticipate that, even if the court invalidates Trump’s tariffs, the Republican president will not make it easy to return their money.
“It’s not in the DNA of the U.S. government to return money, and Trump won’t want to give it back either,” said Jim Estill, CEO of Danby Appliances, a Canadian company that sells small refrigerators, microwaves, and laundry appliances through major retailers like Home Depot.
Danby’s products are manufactured in China and other Asian countries targeted by Trump’s tariffs. If Danby can recover its $7 million, Estill said he is concerned that Home Depot and its customers will also want a share.
“It’s just going to be a dog fight,” Estill added, referring to the potential complication.
Historical Context of IEEPA and Tariff Implications
Trump is the first president to invoke the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Historically, the IEEPA has been used to impose sanctions on U.S. adversaries or freeze their assets.
Tariffs related to the IEEPA have generated an estimated $133.5 billion in revenue between February 4 and December 14, according to the most recent data from U.S. Customs and Border Protection (CBP).
The current total is estimated to approach $150 billion, based on the continuation of average daily collection rates from late September through mid-December, according to Reuters calculations.
Key Questions and Answers
- What is the case about? The case revolves around the legality of tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) of 1977.
- Why are US importers preparing for refund requests? If the Supreme Court rules against Trump’s tariffs, importers anticipate seeking refunds for tariffs already paid, totaling approximately $150 billion.
- What makes this situation unique? Trump is the first president to use IEEPA to impose tariffs, which has historically been employed for sanctions or asset freezes on U.S. adversaries.
- What challenges do importers face in seeking refunds? There is uncertainty about whether the U.S. government will readily return the money, and major retailers like Home Depot may also claim a portion of the refunds.
