The Supreme Court delivered a stunning rebuke to the Trump administration's trade policy Thursday, ruling that the president's sweeping global tariffs exceeded his constitutional authority—and immediately putting more than $175 billion in collected duties at risk of refunds.
In a 6-3 decision, the Court found that the president lacked the legal authority to impose blanket tariffs on all imports without explicit Congressional approval, striking down the emergency trade measures that had been in effect since early 2025. The ruling invalidates tariffs that affected virtually every product entering the United States, from automobiles to consumer electronics.
The numbers don't lie, but executives sometimes do. In this case, the Treasury Department will face uncomfortable questions about $175 billion already collected from American importers—funds that companies like Costco and over 1,000 other firms are now positioning to recover.
The decision, however, failed to resolve what Fortune called "the $200 billion question": who gets their money back, and when? While the Court struck down the tariffs as illegal, it punted the refund mechanics back to the Court of International Trade, where resolution could take months.
Trump's Immediate Pivot
Within hours of the ruling, Trump announced he would impose a new 10% global tariff using different legal authority—specifically Section 301 of trade law, which allows targeted tariffs on specific countries or products based on alleged unfair trade practices.
The pivot represents more than tactical maneuvering. It signals that the administration views the Court's decision not as a defeat on trade policy, but as a procedural obstacle requiring new paperwork. "We have other options," a White House official stated, "and we're going to use them."
The new 10% tariff, while lower than some of the previous rates, would still apply broadly across trading partners. Legal experts suggest this approach may survive constitutional scrutiny because it relies on established statutory frameworks rather than emergency powers.
