The Supreme Court ruled Friday that most of President Donald Trump’s widespread tariffs put in place last year are invalid — but that doesn’t mean shoppers will suddenly see prices drop.
The high court ruled that Trump overstepped his authority by relying on a decades-old emergency law to impose tariffs on goods from nearly every country.
Now, the fate of the tariffs is uncertain. Trump is unlikely to completely back off from the levies, and the administration has been preparing backup plans in the case the Supreme Court ruled against it.
Here’s what the ruling means for American consumers and what happens next.
Does this mean all tariffs are off?
No. The Supreme Court’s ruling applies to the tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA). That includes the country-specific tariffs such as a 15 percent levy on goods from European Union countries or a 20 percent tariff on imports from Vietnam.
That includes most of the tariffs Trump put into place last year, but not all of them. Sector-specific tariffs, such as duties on steel, aluminum and autos will remain in place.
What does this mean for prices?
Tariffs contributed to rising prices throughout the past year, though not as significantly as some analysts had initially feared. Still, the Yale Budget Lab estimates that the average household would lose about $1,800 because of the cost of tariffs in the short term.
Federal Reserve Chair Jerome H. Powell said in December that tariff price increases caused much of the overshoot in inflation, which has remained stubbornly higher than the Fed’s target rate of 2 percent.
But even with IEEPA tariffs gone, consumer are unlikely to see much immediate relief in their shopping bills.
“Generally, prices don’t go down once they’ve gone up,” said Joe Feldman, senior managing director and retail analyst at Telsey Advisory Group. “We might see a little bit of relief.”
Companies may be wary to reduce prices when so much uncertainty remains about the future of tariffs.
For months last year, many companies stocked up on imports in anticipation of tariffs. That gave them a cushion before they had to raise prices to make up for the increased cost of goods. That advance inventory started running out for many late last year, but it’s possible that throwing out the IEEPA tariffs will prevent future price increases that would have otherwise taken place.
Will I get any rebates?
Probably not. For the most part, tariffs are paid by importing companies during a Customs and Border Protection process. Individual consumers eventually see some of those fees in the form of cost increases but do not pay tariffs directly.
It’s unlikely that individual businesses will refund customers for price increases.
Trump said several times last year that he planned to use the tariff revenue, which was about $200 billion as of mid-December, to give stimulus checks to Americans. But there are many challenges inherent in that plan, including that tariff funds go to the Treasury and must be allocated by Congress before they are used.
Will businesses get refunds from tariff payments?
Maybe. There’s already a process in place for importers to adjust and dispute the duties they’ve paid at the border, and it’s possible that companies will use that system to appeal the fees they’ve paid over the past several months.
But the government has yet to say if or how refunds would work or how long they might take to reach companies. The Supreme Court did not address what to do about refunds.
Businesses are preparing for a potential refund process, and some had already started petitioning CBP for refunds even before the court ruled, in the hopes of getting put in the front of the line.
Costco, one of the nation’s largest retailers, sued customs officials in late November, saying separate legal action was needed to guarantee its refund rights.
What does this mean for the future of tariffs?
Trump is unlikely to simply dismiss the idea of tariffs because of the legal setback. Members of the Trump administration have already discussed other avenues to impose levies. After the Supreme Court oral arguments, Trump told reporters his team would “develop a ‘game two’ plan.”
There are more traditional — albeit slower — ways to put tariffs in place, such as the sector-specific tariffs on steel, aluminum and copper. Those are generally proceeded by a government investigation and are more specific than the countrywide tariffs Trump imposed last year.
One way Trump might proceed would be to use a different law to temporarily put in place tariffs of up to 15 percent for about five months, said Patrick Childress, an international trade attorney at Holland & Knight in D.C. and a former assistant general counsel at the Office of the U.S. Trade Representative. During that time, the Trump administration could conduct investigations using a separate law to potentially put in place country-specific tariffs.
“This is the path I think the administration is most likely to take because it gives them speed. They have flexibility to raise tariffs up or down, and they result in country-specific tariffs much like the IEEPA tariffs,” Childress said.
If that’s how the White House ultimately tackles tariffs, it could mean that not much changes at all for consumers.
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