Supreme Court Rules Tariffs Exceeded Presidential Authority (Image Credits: Pixabay)
More than 1,800 companies have filed lawsuits in the U.S. Court of International Trade seeking refunds on billions of dollars in tariffs ruled unlawful by the Supreme Court last week.[1][2]
Supreme Court Rules Tariffs Exceeded Presidential Authority
The Supreme Court issued a 6-3 decision on February 20, 2026, striking down tariffs President Donald Trump imposed under the International Emergency Economic Powers Act.[3] Chief Justice John Roberts wrote that the law, typically used for sanctions or asset freezes, did not authorize tariffs, a power reserved for Congress under the Constitution. No previous president had invoked the act for such duties.
Trump declared a national emergency in April 2025 over the U.S. trade deficit, then imposed sweeping “reciprocal” tariffs on imports from most trading partners. Additional levies targeted China, Canada, and Mexico citing drug trafficking concerns. These measures collected between $130 billion and $175 billion over roughly 10 months before the ruling halted them.[1][3]
Corporate Giants Lead Surge in Refund Lawsuits
FedEx became one of the first major firms to sue after the decision, filing on February 23 in the Court of International Trade for a full refund plus interest on all duties paid under the illegal tariffs.[4] The logistics company acted as importer for many goods, positioning it among those directly affected.
Many suits predated the ruling, with companies acting preemptively. Costco Wholesale filed early to preserve refund rights. Goodyear Tire & Rubber, Revlon, and Bumble Bee Foods also challenged the levies. Other participants include EssilorLuxottica, Kawasaki, Barnes & Noble Purchasing, Dyson, and L’Oreal.[2][1]
- Costco Wholesale: Sought to block enforcement and claim refunds.
- FedEx: Demands complete reimbursement post-ruling.
- Goodyear Tire & Rubber: Among early filers at trade court.
- Revlon: Cosmetics importer challenging duties.
- Bumble Bee Foods: Canned goods producer affected by levies.
Legal Hurdles Complicate Path to Refunds
The Supreme Court opinion left refund mechanics unresolved, remanding the issue to lower courts. Lawyers now press the Court of International Trade and appellate panels for swift action, including interest on payments. The trade court paused cases in December pending the high court outcome.[1]
Federal litigator Matthew Seligman described the volume as “asbestos level of lawsuits,” all converging simultaneously. Law firms like Crowell & Moring and Sidley Austin handled over 150 cases each even before the decision. Smaller importers hope U.S. Customs issues automatic refunds, but experts anticipate prolonged battles.[2]
Trump dismissed refund prospects, stating, “We’ll end up being in court for the next five years.” Treasury Secretary Scott Bessent indicated compliance with court orders but deferred to judges. The administration’s response to key motions arrives by Friday.[1]
Broader Economic Ripples Emerge
Wall Street traders snapped up tariff refund claims post-ruling, betting on payouts. Firms like Quinn Emanuel formed dedicated teams to manage filings. Optimists predict resolutions in one to two years; others foresee drawn-out disputes.
Trump vowed new 10% to 15% global tariffs under alternative authorities, signaling ongoing trade tensions. The original levies disrupted markets and strained alliances, with trading partners celebrating the decision while bracing for successors.[3]
Key Takeaways
- Supreme Court invalidated IEEPA-based tariffs, opening door to $130B+ refunds.
- Over 1,800 suits filed, led by FedEx, Costco, and Goodyear.
- Refunds face years of litigation; government vows to fight.
This torrent of litigation underscores the high stakes in U.S. trade policy battles. Businesses stand to recover significant sums, but only after navigating complex courts. What implications do you see for future tariffs? Share your thoughts in the comments.