The Supreme Court delivered a massive blow to Donald Trump’s trade agenda on Friday, declaring his sweeping national tariffs unconstitutional. While the 6-3 ruling effectively ends the controversial levies, it leaves a $133 billion hole in the federal ledger as companies demand their money back.
Legal experts expect a difficult transition period as the government tries to figure out how to return the massive sum it has already pocketed. “It’s going to be a bumpy ride for awhile,” said trade lawyer Joyce Adetutu, a partner at the Vinson & Elkins law firm.
The justices decided that Trump overstepped his bounds by using a 1977 emergency powers law to bypass Congress and tax nearly every country in the world. The court made it clear that the power to tax imports belongs to the legislative branch, not the White House. Now, federal agencies and specialized trade courts are bracing for an unprecedented wave of paperwork.
“The amount of money is substantial,” Adetutu said. “The courts are going to have a hard time. Importers are going to have a hard time.” Despite the coming headache, she noted that the government has no choice but to pay up. “It’s going to be really difficult not to have some sort of refund option” given how decisively the Supreme Court repudiated Trump’s tariffs.
The lack of a clear plan for the money sparked concern even within the court. Justice Brett Kavanaugh, who dissented, hit back at his colleagues for leaving the logistics up in the air. “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,” he wrote. Echoing a term used by Justice Amy Coney Barrett during earlier hearings, Kavanaugh warned that “the refund process is likely to be a ‘mess.’” Trump was equally frustrated, venting to the press about the ruling. “I guess it has to get litigated for the next two years,” Trump told reporters at a press conference Friday. “We’ll end up being in court for the next five years.”
While the end of these taxes might help cool down inflation, regular shoppers shouldn’t expect a direct payout. The refunds are aimed at the corporations that paid the import taxes, like Revlon or Costco, even though those costs were often passed on to customers in the form of higher price tags.
Trade specialists argue that the complexity of the situation doesn’t excuse the government from its debt. “Just because the process is difficult to administer doesn’t mean the government has the right to hold on to fees that were collected unlawfully,” said trade lawyer Alexis Early, partner at the law firm Bryan Cave Leighton Paisner. She anticipates a legal marathon across the country. “We may see years of ongoing litigation in multiple jurisdictions,” Early said.
The political fallout is also heating up as state officials demand their cut. Illinois Governor JB Pritzker has already called for over $8 billion in refunds for his state’s households, while Nevada’s Treasurer Zach Conine has submitted a $2.1 billion request. Conine made it clear he intends to go after every cent lost to the federal government’s overreach. “As Nevada’s chief investment officer, I have a responsibility to try to recoup every single dollar that the Trump Administration takes from Nevada families,” Conine said in a statement. For thousands of businesses, the focus now shifts from fighting the tax to fighting for their check.
