If Supreme Court rules against Trump tariffs, here's what you can expect

If the Supreme Court strikes down many of the tariffs President Donald Trump issued during his second term in office, businesses could expect refunds and consumers could expect some potential price decreases in the long run.

Both should expect more uncertainty.

The nation’s highest court agreed Sept. 9 to hear Trump’s appeal of lower court rulings that he overreached when he invoked a 1977 law to impose tariffs on imports from most countries. If the court sides against him, many – but not all – of the tariffs imposed during his second term could be affected.

Trump has said the United States will face an “economic disaster” unless the tariffs remain in place.

Economic experts aren't so sure. The justices will hear arguments in November.

Rohit Tripathi, vice president of industry strategy, manufacturing, at RELEX, said while refunds could benefit businesses’ bottom lines, consumers wouldn’t be likely to see immediate price declines on shelves. 

“Simply because a lot of the businesses so far have either been absorbing those increased costs or pushing their suppliers to absorb these costs,” Tripathi said.

Which tariffs would be affected?

This case concerns tariffs Trump enacted under the International Emergency Economic Powers Act, or IEEPA. This law lets the president take economic actions, including regulating or prohibiting imports and exports, to deal with “any unusual and extraordinary” foreign threat to U.S. national security, foreign policy, or the economy, as long as the president declares a national emergency. 

Trump invoked IEEPA on Feb. 1 when he announced tariffs on imports from China, Canada, and Mexico, tied to declared emergencies concerning drug trafficking and illegal immigration. These are sometimes referred to as the “fentanyl tariffs,” and represent a range of tariffs imposed on imports from the three countries. 

The president declared another emergency on April 2 over U.S. trade deficits and what he described as unfair trade practices. Based on that declaration, Trump imposed at least a 10% tariff on almost all imports and higher, country-specific “reciprocal tariffs.”

The case does not concern sector-specific tariffs on imports like steel and aluminum, issued under Section 232 of the Trade Expansion Act of 1962.

Would the administration need to issue refunds?

Treasury Secretary Scott Bessent told NBC’s “Meet the Press” on Sept. 7 the U.S. Treasury Department would need to issue refunds for “about half the tariffs, which would be terrible for the Treasury.”

Trump has said he will ask the Supreme Court for an expedited ruling, but the court’s decision could come as late as June 2026. 

“The longer a final ruling is delayed, the greater the risk of economic disruption,” Bessent said in a declaration to the Supreme Court. “For example, delaying a ruling until June 2026 could result in a scenario in which $750 billion-$1 trillion in tariffs have already been collected, and unwinding them could cause significant disruption.”

Would Trump impose other tariffs?

Drew DeLong, who leads the Geopolitical Dynamics Practice at Kearney, a global strategy and management consulting firm, said it’s reasonable to think that if the high court ruled against Trump, the White House would promptly implement a contingency plan.  

That may look like the administration using Section 122 of The Trade Act of 1974 to impose new tariffs. The section allows the president to take measures, including a temporary import tariff not exceeding 15% when necessary to address “large and serious United States balance-of-payments deficits” or other situations that present “fundamental payments problems.” However, that law would only allow the tariffs to remain in place for a maximum of 150 days.

“There is a fuse on it. So, what do you do after the fuse runs out? That was another big question mark. Can you re-up it?” DeLong said.  

He imagines the White House's backup plan could look like the administration using Section 122 to set that 150-day gap in place, and then using Section 301 of the same act, which would allow the administration to impose tariffs in response to actions by foreign governments that burden or restrict U.S. commerce. That method requires an investigation into each country, and is “much more cumbersome,” according to DeLong. 

DeLong also said the White House would have the “wild card” option of asking help from Congress, which has the power to regulate foreign commerce and impose import tariffs. 

“Tariffs aren’t super popular,” DeLong said. “So, what would Congress do?”

What businesses could expect

Tripathi said Wall Street might, at least temporarily, reward businesses that have been heavily impacted by tariffs through rises in their stock value if the court sides against Trump. 

However, the decision would introduce “a wide range of headaches” for executives, according to DeLong. 

Businesses who have paid tariffs during Trump’s second term in office will first ask whether they qualify for a refund and how they could get one.

Then comes the question: What now? Businesses will look to see if the White House quickly acts to implement a stopgap solution. 

“If there is a window of time where they’re not in effect, before the White House does something, you have a question of: how quickly can you restock the shelves or restock inventory?” DeLong added. 

While economic uncertainty has plagued boardrooms this year, some businesses are not putting plans on hold. They’re planning for multiple scenarios and putting data infrastructure in place so they can pivot if tariffs change. 

“When there’s this significant of volatility, waiting is a strategy," DeLong said.

What consumers could expect

If the Supreme Court strikes down the tariffs, the decision would not spell relief for consumers this holiday season, as import and inventory decisions for that time of year were made months ago, according to Tripathi. 

In six to eight months after the decision, Tripathi said consumers may see more inventory on shelves, but that it would likely be a year or longer before consumers may notice some price decreases. 

Katie Thomas, who leads the Kearney Consumer Institute, an internal think tank at Kearney, said it’s unlikely consumers would receive any sort of refund for past tariff costs that have been passed to them. However, she said that some companies might work to bring down prices to a reasonable level and the refunds they receive could lead to less layoffs.

“Could it change rates? Could it change inflation? Those heavier questions and unemployment are what I’d really be watching for,” Thomas said. “Broadly, what would benefit consumers the most, that I just don’t think is in our foreseeable future for years, is just less uncertainty."