US tariff policy in flux after Supreme Court ruling

Shortly after the Supreme Court decision, President Trump said the administration would introduce a 10% tariff on global imports, using alternative legal authorities, including Section 122 of the Trade Act of 1974. This provision allows the US government to impose broad-based tariffs or import restrictions to address balance-of-payments concerns, without going through a full investigative process.

Section 122 is designed as a short-term tool. It allows tariffs of up to 15% to be applied for up to 150 days, unless Congress approves an extension. Because it can be implemented quickly, it is often used as an immediate response while longer-term measures are prepared under other statutes.

The US Supreme Court has ruled that President Donald Trump did not have the legal authority to impose broad “Liberation Day” tariffs using emergency powers under the International Emergency Economic Powers Act (IEEPA).

In a 6-3 decision, the court said that IEEPA does not give the president the power to apply wide, global tariffs. It confirmed that tariffs are a type of tax, and that this power mainly sits with Congress unless clearly given to the president.

The ruling does not remove all tariffs, only applying to tariffs created under IEEPA. It does not affect tariffs created under other laws (such as those linked to national security or unfair trade practices).

This means tariffs are still part of US trade policy, but they may now be applied in different ways. The court did not decide what should happen to tariffs already collected. This creates uncertainty for companies that have already paid these duties.

“The worst case scenario is this will be very chaotic in terms of refunding over $100 billion in customs uses and also having a great impact on the US economy,” TTP Global Advisory Panel Member and ICC UK Secretary General Chris Southworth said on BBC.

Any refund process, if it happens, will depend on future legal and government decisions.