WASHINGTON (AP) 鈥� The Supreme Court鈥檚 of President Donald Trump鈥檚 most sweeping tariffs means he can鈥檛 conjure up new import taxes on a whim anymore.
But the justices鈥� ruling on Friday is nonetheless unlikely to ease the uncertainty over Trump鈥檚 trade policy that has over the past year. 鈥淚t鈥檚 only gotten more complicated for everybody,鈥欌�� said trade lawyer Ryan Majerus, partner at King & Spalding and a former U.S. trade official.
Vexing questions remain: How will the president use to reconstruct the tariffs the Supreme Court knocked down, and will those attempts withstand legal challenges? What does the decision mean for the trade deals Trump strong-armed other countries into accepting, using his now-defunct tariffs as leverage? Can importers for the tariffs they paid last year, and if so, how?
Then there鈥檚 Trump鈥檚 own unpredictability. Even though he had weeks to prepare for an unfavorable Supreme Court ruling, his response was still chaotic: On Friday, he said he鈥檇 use other legal authority to impose 10% levies on imports from other countries. Saturday, 鈥� but the levies that U.S. Customs and Border Protection started collecting at 12:01 a.m. Tuesday were just 10%.
Normally, lower tariffs arising from the Supreme Court鈥檚 decision might be expected to give the economy a little lift. But 鈥渁ny benefit you would get from that is more than offset to a modest negative from the uncertainty front,鈥� said Mike Skordeles, head of U.S. economics at Truist, a bank.
Trump looks for new import taxes
Gone for good are the sweeping tariffs Trump justified under the 1977 International Emergency Economic Powers Act (IEEPA), mainly to combat America鈥檚 persistent trade deficits. But that doesn’t mean the president can’t invoke other laws to rebuild much of his tariff wall around the U.S. economy.
鈥淭ariff revenues will be unchanged this year and will be unchanged in the future,鈥� Treasury Secretary Scott Bessent said in a Fox 草莓传媒 interview Sunday.
Trump reached for a stop-gap option immediately after his defeat Friday at the Supreme Court: Section 122 of the Trade Act of 1974 allows the president to impose tariffs of up to 15% for up to 150 days. But any extension beyond 150 days must be approved by as November鈥檚 midterm elections loom.
Section 122 has never been invoked before, and some critics say the president can鈥檛 use it as a stand-in for the IEEPA tariffs to combat the trade deficit.
Bryan Riley of National Taxpayers Union, for example, argues that Section 122 is meant to give the president a tool to fight what it calls 鈥渇undamental international payments problems,鈥欌�� not the trade deficit.
The provision arose from the financial crises that emerged in the 1960s and 1970s when the U.S. dollar was tied to gold. Other countries were dumping dollars in exchange for gold at a set rate, putting alarming downward pressure on the dollar. But the U.S. currency is no longer linked to gold, so Section 122 has been 鈥渆ffectively rendered obsolete,鈥欌�� Riley wrote in a commentary.
鈥淕iven the amount of money at issue for U.S. businesses, it is not hard to imagine a new wave of litigation attacking Section 122, and again seeking refunds of Section 122 duties collected,鈥� said trade lawyer Dave Townsend, a partner at Dorsey & Whitney.
A sturdier alternative is Section 301 of the same 1974 trade act, which gives the United States a handy cudgel with which to smack countries it accuses of engaging in 鈥渦njustifiable,鈥� 鈥渦nreasonable鈥� or 鈥渄iscriminatory鈥� trade practices. In a statement Friday, in fact, U.S. Trade Representative Jamieson Greer said the administration was launching a series of 301 investigations after the loss at the Supreme Court.
Trump invoked Section 301 in his first term to impose sweeping tariffs on Chinese imports in a dispute over the sharp-elbowed tactics that Beijing was using to challenge America鈥檚 technological dominance. Those tariffs were upheld in court and kept by the Biden administration.
鈥淲e鈥檙e eight years in, and those China tariffs are still here,鈥� King & Spalding鈥檚 Majerus said. 鈥淭hey鈥檙e sticky tariffs.鈥欌��
Confusion surrounds Trump’s trade deals
The Supreme Court鈥檚 decision also raises questions about the lopsided trade agreements Trump negotiated last year, using the threat of potentially unlimited IEEPA tariffs to squeeze concessions out of U.S. trading partners from the European Union to Japan.
Will countries try to back out of their commitments, now that the IEEPA tariff threat is gone?
The European Union鈥檚 trade deal with Trump is already on hold amid confusion following the Supreme Court鈥檚 ruling 鈥� and Trump鈥檚 decision to respond to it with the 15% Section 122 global tariff.
on ratifying the pact to seek clarification. They are worried that Trump鈥檚 new import tax will stack on top of the 鈥渕ost favored nation鈥欌�� tariffs the United States charges under pre-existing World Trade Organization rules 鈥� and lift U.S. tariffs on EU imports above the 15% the Europeans had agreed to last year.
鈥淎 deal is a deal,鈥� said commission spokesman Olof Gill. 鈥淪o now we are simply saying to the US, it is up to you to clearly show to us what path you are taking to honor the agreement.鈥�
Then there鈥檚 the United Kingdom, which had reached a deal with Trump last year for 10% tariffs on its exports to the United States. Will they really go to 15%?
Still, trade analysts largely expect U.S. trade partners to stick by the deals they reached with Trump last year. For one thing, the United States could wallop them with hefty Section 301 tariffs, which are potentially unlimited, for violating trade agreements.
鈥淭hey鈥檙e going to pretty leery of rocking the boat on their deals,鈥� Majerus said. 鈥淰iolations of trade agreements can be a basis for taking 301 action. So you could see Section 301 become an enforcement mechanism鈥欌�� for the United States.
鈥淲e are confident that all trade agreements negotiated by President Trump will remain in effect,鈥欌�� U.S. Trade Representative Greer said in his statement.
A messy refund process
In its ruling, the Supreme Court didn鈥檛 bother to say what would happen to all the money collected from the IEEPA tariffs, $133 billion as of mid-December. It left the messy issue of refunds to importers 鈥� 鈥� to lower courts and the Customs and Border Protection agency, which collects import taxes. But they鈥檙e likely to be overwhelmed 鈥� hundreds of companies are already lined up to get their money back 鈥� and the refunds could take months or years to be paid.
鈥淭he whole thing鈥檚 going to be a mess,鈥欌�� Majerus said.
It鈥檚 possible that Congress will order Customs to take an 鈥渆asy 鈥榦ne-click鈥� approach to refunds,鈥欌�� wrote strategists Thierry Wizman and Gareth Berry at the investment bank Macquarie. Otherwise, they warned, the Trump administration could 鈥渕ake the refund process as burdensome as possible, requiring every importer to file stacks of paperwork, if not file a lawsuit, to get its money back. That would be costly for businesses.鈥欌��
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AP Economics Writers Christopher Rugaber in Washington and David McHugh in Frankfurt, Germany, contributed to this report.
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