NEW YORK/LONDON, Feb 20 (Reuters) – Thousands of businesses have won a hard-fought victory after the U.S. Supreme Court has ruled to overturn the White House’s emergency tariffs, but the process of getting refunds has only just begun.
In a decision that could reverberate throughout the global economy for years, a court ruled that US President Donald Trump cannot use the International Emergency Economic Powers Act of 1977 to impose broad tariffs on imported goods.
The business world has spent months adapting to President Trump’s frequently evolving trade policies and the use of tariffs, which are central to his policy agenda, not only to address trade issues but also as a cudgel against other government policies and actions.
The two countries are likely to face further challenges, as President Trump vowed in a furious press conference after the ruling to use additional powers to impose additional tariffs, including a temporary 10% tariff on all imports. On Saturday, February 21st, President Trump raised that number to 15%.
Nevertheless, many businesses and industry groups responded with hopes for more predictable trade policy. Economists at Penn Wharton Budget Models said Friday that thousands of companies, not just those that sued the administration, will now decide whether to seek refunds for more than $175 billion in tariffs collected in the United States.
“If the country needs revenue, it should be discussed in Congress,” said Rick Woldenberg, CEO of toy maker Learning Resources, one of the first companies to file suit against the tariffs last April. “I’m excited. I hope this makes everyone feel like they won. It’s a win for everyone.”
uncertainty remains
Shares of affected companies initially rose on the news, but the gains were pulled back due to uncertainty over trade policy. Shares of Target TGT.N and Coach’s parent company Tapestry TPR.N rose slightly in afternoon trading.
John Denton, executive director of the International Chamber of Commerce, said any refund proceedings would likely be referred to the U.S. Court of International Trade, meaning claims would likely be administratively complex, adding that the ruling was “disturbingly silent” on the issue.
Since April, more than 1,800 tariff-related lawsuits have been filed with the U.S. Court of International Trade, which has jurisdiction over tariffs and customs matters, compared with fewer than 20 such lawsuits in all of 2024.
President Trump’s vow Friday to impose additional tariffs was anticipated by a number of lawyers and business groups interviewed before the news conference. Several said the decision and President Trump’s subsequent moves will create further uncertainty in the coming months.
“The potential for tariffs to be re-imposed in a modified form remains significant,” said Ol Sonora, head of U.S. economics at Fitch Ratings. “The potential for tariffs to be re-imposed in a modified form remains significant. The accumulation of potential tariff refunds would create onerous operational and legal overloads and increase economic uncertainty.”
Many sectors affected
Consumer goods, automotive, manufacturing, and apparel companies have been particularly hard hit because they rely on low-cost production in China, Vietnam, India, and other sourcing locations. President Trump’s tariffs are raising the cost of importing finished goods and parts, squeezing profit margins and disrupting finely tuned global supply chains.
The main plaintiffs include a subsidiary of Japan’s Toyota Group, US retailer Costco COST.O , tire maker Goodyear Tire & Rubber GT.O , aluminum company Alcoa AA.N , Japanese motorcycle maker Kawasaki Motors, and Paris-listed eyewear giant Essilor Luxottica ESLX.PA .
The tariffs are pushing up prices for consumers exhausted by years of post-COVID-19 inflation, and the New York Fed estimated last week that 90% of President Trump’s tariffs are being borne by U.S. consumers and businesses. The White House insists there is little evidence that the levy is being paid by foreign nationals.
As of November, the effective U.S. tariff rate was 11.7%, compared with an average of 2.7% from 2022 to 2024, according to the Yale Institute for Budget Studies.
Additionally, the automotive sector will continue to face significant tariffs that were not imposed under IEEPA. For example, a 25% import tariff was imposed on vehicles shipped across the border from Mexico and Canada last year for national security reasons.
Still, lawyers say the levy is impacting potentially thousands of auto parts shipped to the U.S. from countries covered by President Trump’s reciprocal tariffs, inflating costs for both parts suppliers and automakers.
Lawyers said more companies around the world are likely to join the lawsuit and are awaiting a ruling to avoid drawing unnecessary attention from the White House. They join a growing number of companies that could wait months or even years to collect billions of dollars in import duties.
Wade Kawasaki, CEO of California-based automotive wheel maker The Wheel Group, said his company faces about 20% additional costs under the IEEPA tariffs. He plans to ask for a refund, which he said will involve his team sorting through thousands of transactions to “figure out how much they owe us.”
Some U.S. companies have chosen to sell the right to collect these refunds to outside investors. This involves agreeing to make a small payment upfront (about 25 to 30 cents on the dollar) and forfeit the remainder to investors if tariffs are lifted, Reuters reported in December.
German logistics company DHL said it would use its technology to ensure customers receive refunds “accurately and efficiently” if approved.
Bruce Smith, owner, chairman and CEO of Voltava, a Michigan-based auto parts company, said he supports President Trump’s efforts to balance trade with other countries, but now expects the president and other elected officials to protect national interests and work on trade policies that benefit both the United States and its trading partners.
“We can be tough and act strategically without being unpredictable,” he said.
(Reporting by Nicholas Braun and Arianna McLimore in New York; Additional reporting by Tom Hulse in Delaware, Nora Eckert and Kalea Hall in Detroit, Alexander Murrow in London and Christoph Steitz in Frankfurt; Writing by David Gaffen; Editing by Lisa Jukka and Nick Zieminski)
