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Supreme Court Strikes Down Trump Tariffs, Triggers $134 Billion Refund Process and New 10‑15% Tariff Proposal

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Court’s 6‑3 Decision Declares IEEPA Tariffs Unlawful The Supreme Court issued a 6‑3 ruling on February 20, 2026, holding that the 1977 International Emergency Economic Powers Act does not grant the president authority to impose import taxes, thereby nullifying the “Liberation Day” tariffs announced by Donald Trump [1][2][3]. The decision overturned $133‑$134 billion in duties collected through December 2025, marking the largest single‑issue overturning of presidential trade power in modern history [2][3]. Justices warned that the ruling will generate extensive litigation over refund eligibility and accounting adjustments [1].

Refund Process Targets Hundreds of Billions in Customs Revenue Treasury data show $195 billion in customs revenue for FY 2025, much of which stemmed from the invalidated tariffs, and Chinese imports alone accounted for roughly one‑third of the collections ($91.8 billion) [1]. Importers must file a protest within 180 days of entry liquidation, and the refund rollout is projected to take 12‑18 months, coordinated among Customs and Border Protection, the Court of International Trade, and lower courts [2][1]. Trade lawyer Joyce Adetutu warned that the “bumpy” path could delay reimbursements for many firms, while state officials in Illinois and Nevada are already demanding billions on behalf of residents [2].

Trump Announces New 10‑15% Tariff via Section 122 On February 21, 2026, Trump signed a new 10% across‑the‑board duty, with the rate rising to 15% for certain categories, invoking Section 122, which permits temporary ad valorem tariffs for up to 150 days without explicit congressional approval [1]. The move seeks a legally distinct pathway after the Supreme Court loss and aligns with mid‑term election pressures to appear tough on trade [1]. Analysts note the new tariffs could affect the same sectors—autos, apparel, electronics—previously hit, potentially compounding refund complexities [3].

Litigation Landscape Shifts After Small Importer’s Victory Victor Schwartz, owner of New York‑based VOS Selections, became the lead plaintiff in a consolidated case that helped topple the emergency tariffs, after the Liberty Justice Center selected him as the representative importer [3]. Large firms such as Costco, Revlon, and Bumble Bee Foods filed pre‑emptive lawsuits before the Court’s decision to secure priority in any refund distribution, while Schwartz reports ongoing harassment following the win [3][2]. The lawsuits underscore a strategic split: smaller importers seeking redress, and big corporations protecting reputational and financial stakes.

State Leaders Push for Direct Compensation to Residents Illinois Governor J.B. Pritzker claimed the tariffs cost households an average of $1,700, totaling $8.7 billion, and Nevada Treasurer Zach Conine requested $2.1 billion on the state’s behalf, intensifying pressure on the federal refund process [2]. Both officials argue that the federal government should allocate a portion of the $133‑$134 billion refund pool directly to affected citizens, a stance not addressed in the Supreme Court opinion but influencing political discourse [2].

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Timeline

2018‑2020 – Trump’s administration imposes sweeping import duties under the International Emergency Economic Powers Act, creating a $90‑$133 billion tariff regime that later becomes the subject of extensive litigation [7].

Feb 2025 – President Trump issues executive orders establishing a 10 % baseline tariff on most imports and reciprocal tariffs of 11‑50 % on 57 countries, including Canada, Mexico, and China, expanding the IEEPA‑based tariff program [11].

Apr 14, 2025 – Victor Schwartz, owner of VOS Selections, files the lead case VOS Selections, Inc. v. Trump, later consolidated with suits from 12 states and Learning Resources, challenging the legality of the emergency tariffs [2].

Oct 2025 – A CBS News poll finds only 38 % of Americans support new tariffs, a reversal from a 2024 poll, indicating growing public opposition to the trade measures [3].

Nov 5, 2025 – The U.S. Supreme Court hears oral arguments on the IEEPA tariff authority; Justice Gorsuch warns of a “one‑way ratchet” toward executive power and Chief Justice Roberts questions whether the law permits tariffs on “any product, from any country, in any amount, for any length of time” [9][4].

Dec 1, 2025 – Costco files a complaint in the U.S. Court of International Trade in Manhattan seeking a judgment that would guarantee refunds of duties paid if the Supreme Court later invalidates the tariffs, meeting a Dec 15 deadline for tariff liquidation [5][11].

Dec 1, 2025 – White House spokesperson Kush Desai warns that an unfavorable ruling would have “enormous” economic consequences and calls for a “speedy and proper” resolution, reflecting Treasury concerns over billions already collected [1].

Dec 2, 2025 – Costco’s lawsuit emphasizes that Customs and Border Protection denied a request for more time to calculate tariff liabilities, threatening the company’s ability to recover refunds even if the Court rules against the administration [4].

Dec 14, 2025 – U.S. Customs data show that potential refunds for affected importers could total at least $134 billion, underscoring the massive fiscal stakes of the disputed duties [2].

Dec 15, 2025 – CBP begins the tariff liquidation process, giving importers a 180‑day window to protest their bills; Costco warns that a delayed Supreme Court decision could erode this protest period [7].

Mid‑Dec 2025 – Treasury reports that $133 billion in tariffs have been collected under the IEEPA program, highlighting the scale of the contested revenue [6].

Feb 20, 2026 – The Supreme Court issues a 6‑3 ruling that the International Emergency Economic Powers Act does not authorize the president to levy import taxes, nullifying the $133 billion tariff regime; Justice Amy Coney Barrett notes the refund process will be “chaotic and difficult to administer” [6][3].

Feb 21, 2026 – President Trump signs a new 10 % across‑the‑board tariff under Section 122 and hints at additional 15 % measures, seeking a legally distinct pathway after the Court’s decision [2][8].

Feb 2026 (ongoing) – Trade lawyer Joyce Adetutu warns that the refund rollout will be “bumpy,” requiring coordination among CBP, the Court of International Trade, and lower courts and may take 12‑18 months; state officials such as Illinois Gov. JB Pritzker and Nevada Treasurer Zach Conine demand billions in refunds for residents [6].

Future (by June 2026) – The Supreme Court is expected to issue a final opinion on the tariff case by the end of its term, potentially solidifying the refund framework for importers like Costco, Revlon, and Bumble Bee Foods [5].

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