What the Supreme Court tariffs ruling means for consumers and businesses

The Supreme Court dealt a huge blow to President Donald Trump on Friday, ruling that the sweeping global tariffs he imposed under the International Emergency Economic Powers Act are unconstitutional.

Although the stock market rallied and U.S. trade partners cheered the decision, what it means for American consumers and small businesses remained a question — even before Trump announced plans for a workaround.

Ultimately, even if Trump’s backup tariff plans fail as well, the effects his tariffs have already had will take a long time to abate, and some could be permanent.

Will prices go down?

Multiple studies have shown that businesses and consumers in the U.S. have overwhelmingly footed the bill for Trump’s tariffs.

It’s unlikely that the cost of many goods will decrease after prices were hiked last year in anticipation of the tariffs going into effect — especially since there is still so much uncertainty over import taxes.

The tariff hikes that continue to be in place will mostly affect metals, vehicles and electronics. But that tax burden could be lightened on apparel and food products now that IEEPA tariffs are no longer in place.

With the IEEPA tariffs struck down, consumers will face an overall average effective tariff rate of 9.1%, the Yale Budget Lab calculated, compared to a 16.9% rate had the court sided with the Trump administration.

Will businesses get their money back?

The Supreme Court ruled on the constitutionality of Trump’s IEEPA tariffs, but it left the question of refunds open. It’s unclear if companies will be granted tariff refunds as of now, but how those payments are issued would be up to U.S. Customs and Border Protection.

It would likely be a messy and drawn-out legal process.

“The logistics of refunds are expected to be a nightmare and require an enormous amount of documentation,” Diane Swonk, KPMG’s Chief Economist, said in a note to clients.

“Small firms are not likely to fare as well as large firms due to the paperwork, time and potential for additional legal challenges by the administration on refunds,” Swonk added.

Scott Lincicome, the vice president of general economics at CATO, told MS NOW last month that the refunds process “will be very hard and highly inequitable” as large corporations will likely have more resources to battle the federal government on refunds.

“That is fine for a company like Costco, they can wait, but for the little guy it’s a death sentence,” Lincicome said.

“If you pay $20,000 in tariffs and you are owed that and you did nothing wrong, you are going to have to spend $30,000 on lawyers and run your business,” he added. “Either you go on with your business and not fight to get back what you are owed or you go out of business.”

Several members of Congress have also called for tariff refunds to consumers and businesses.

Are tariffs really going away?

Hours after Friday’s court ruling, Trump announced that he will sign an executive order to impose an additional 10% global tariff.

Trump also hinted at other ways he might be able to bring back those tariffs.

“The good news is that there are methods, practices, statutes and authorities, as recognized by the entire court in this terrible decision … that are even stronger than the IEEPA tariffs available to me as president of the United States,” he said in a news briefing on Friday afternoon.

That echoed a passage from Justice Brett Kavanaugh’s dissent: “Although I firmly disagree with the Court’s holding today, the decision might not substantially constrain a President’s ability to order tariffs going forward,” the Trump appointee wrote. “That is because numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue in this case — albeit perhaps with a few additional procedural steps.”

Jordan Rubin contributed to this report.