Landmark Supreme Court ruling may change little for you | Opinion

• The Supreme Court struck down a key part of the Trump administration's tariff policy.
• The White House immediately announced a backup plan to keep tariffs in place.
• Consumers are unlikely to see significant price changes or receive any tariff refunds.
• New temporary tariffs may create a short-term opportunity for businesses to import goods at lower rates.

On Feb. 20, the U.S. Supreme Court turned the world of international trade on its head by striking down a core pillar of the Trump administration’s tariff policy. The court held that the International Emergency Economic Powers Act (IEEPA) – the statute underlying the administration’s most impactful and high-profile tariffs – is not a legal basis for the imposition of these charges.

Opponents of the president’s trade policy celebrated this news, hoping it would herald a new day for U.S. international economic policy. Hours later, those hopes were dashed.

In his remarks to the news media, the president was unambiguous: The White House had a backup plan, and tariffs weren’t going anywhere.

As an international trade lawyer focused on tariffs and trade policy, I’ve received an avalanche of questions over the past few days. I'll address some common queries, focusing on how the tariff fireworks will impact U.S. consumers and businesses.

Lower expectations about big changes in prices

What do we know about the replacement tariffs?

Quite a bit. The president revealed the administration’s “Plan B,” which starts with placeholder tariffs of 10% to 15% under Section 122 of the Trade Act of 1974. The United States began collecting these tariffs Feb. 24.

These tariffs come with a statutory time limit of 150 days. The administration will use that 150-day period to investigate a host of trading partners under Section 301 of the Trade Act.

Those investigations will then be the basis for additional tariffs that, unlike the Section 122 tariffs announced Feb. 20, are not time-bound or capped at a certain percentage.

These new Section 301 tariffs will give the president what he wants in a replacement tariff regime: the ability to adjust tariffs up or down, country-by-country specificity, and a statutory basis that has held up to court challenges.

Don't hold your breath waiting for refund checks

When will tariff refunds be available?

We don’t know. The Supreme Court’s decision was silent on the issue of refunds. While the administration has not revealed how it will approach this issue, President Donald Trump’s comments during his Feb. 20 news conference were telling.

Referring to refunds, the president mused: “I guess it has to get litigated for the next two years.” This suggests that the administration is girding for a years-long judicial fight against the issuance of IEEPA-based tariff refunds.

Who will receive tariff refunds?

Probably not consumers. If and when the government cuts tariff refund checks, those funds will not be going to everyday citizens. Instead, the businesses that directly imported the affected goods will receive the money.

It will then be up to other entities in the supply chain – foreign suppliers, downstream buyers, etc. – to negotiate for a cut of those refunds. While some level of business-to-business refund sharing seems plausible, the idea that individual customers will receive their own mini-refund checks seems unlikely.

Impact on what consumers pay may be minimal

Will these events impact consumer prices?

Not really. The Supreme Court’s ruling will have little impact on consumer prices for two reasons.

First, the administration’s near-immediate imposition of replacement tariffs means that we will not see any significant period when goods will enter the United States tariff-free.

Second, while the Section 122 replacement tariffs will be lower than the IEEPA tariffs on goods from certain countries like Vietnam and Indonesia, the new tariffs will be higher than the old tariffs on goods from other countries like the United Kingdom and El Salvador.

In my opinion, when taken as a whole, imported goods will face a similar overall tariff burden, meaning consumers are unlikely to see significant changes to their household budgets.

Can U.S. businesses capitalize on the new tariff landscape?

Potentially. The 15% replacement tariff rate is lower than the IEEPA tariff rate for goods from several significant U.S. trading partners, including Thailand, Vietnam, Indonesia and others. The reduction is most pronounced for Brazil, which saw its effective tariff rate drop from 50% to 15%, and for China, which saw its rate fall from 35% to 15%.

These reduced rates may not last long, however. As soon as Section 301 investigations conclude, expect tariff rates to snap back to pre-Supreme Court decision levels.

Savvy businesses can capitalize on this low-tariff window to stockpile imports or make major purchases from these countries.

In addition, companies should consider participating in the new Section 301 processes, which will be led by my former colleagues at the Office of the United States Trade Representative. USTR will soon accept stakeholder comments during these investigations, giving affected business an opportunity to make their voices heard.

Patrick Childress is a partner in the international trade group at Holland & Knight in Washington, DC. He previously served as assistant general counsel at the Office of the United States Trade Representative.