Tariffs under IEEPA Declared Illegal by US Supreme Court, with Refund Implications Considered

The US Supreme Court on Friday, February 20, struck down Donald Trump's tariff order. The court said Donald Trump exceeded authority under IEEPA. The decision covered levies imposed on nearly every US trading partner last year. Soon after, Donald Trump said fresh 10% tariffs would arrive in the coming week.

The ruling drew quick reactions across politics and industry. Several Democratic leaders welcomed the decision on the Trump-era tariffs. Many business leaders also supported the outcome. Some importers hoped to recover money paid under the tariff regime. The judgment, however, did not spell out how any repayments would work.

Analysts said the Supreme Court ruling on Trump tariffs could trigger large refund claims. Reuters cited a Penn Wharton study estimating $175 billion in collections at risk. Penn Wharton used a ground-up forecasting model. The model applied tariff rates by product and country. It also reflected the specific duties imposed by Trump.

Item	Figure	Source mentioned
Estimated tariff collections at risk	$175 billion	Reuters, citing Penn Wharton
Planned new tariff rate	10%	Donald Trump's announcement
Businesses seeking refunds before ruling	More than 1,000	Alex Jacquez, cited by CBS

The court called the tariffs illegal, yet it gave no refund instructions. That left open questions for companies that paid the duties. PWBM director Kent Smetters told Reuters: "The Supreme Court did not talk explicitly about the $175 billion in tariffs that could potentially be refunded. On the other hand, their ruling today clearly does open that door for those refunds to be demanded,"

Refund expectations rose among importers after the verdict. Alex Jacquez, from Groundwork Collective, told CBS that more than 1,000 businesses had sought refunds earlier. Donald Trump told reporters refunds could stay tied up for years. BBC reported that view. US Treasury Secretary Bessent also said the issue could drag for years.

Bessent spoke at an event in Dallas after the ruling. Bessent said revenues raised through the IEEPA tariffs were "in dispute". Donald Trump criticised the decision and targeted the justices. Donald Trump called them "fools and lapdogs". "The Supreme Court's ruling on tariffs is deeply disappointing, and I'm ashamed of certain members of the Court, absolutely ashamed for not having the courage to do what's right for our country," Trump said.