Post by : Badri Ariffin

In a high-stakes session on Wednesday, the U.S. Supreme Court challenged President Donald Trump’s authority to impose sweeping global tariffs, signaling potential upheaval for U.S. trade policy. Justices questioned the legality of tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), which does not explicitly authorize tariffs but allows regulation of imports during declared national emergencies.

Only Justices Samuel Alito and Clarence Thomas appeared supportive, while the rest expressed skepticism over the administration’s claim of unlimited tariff powers. Analysts say this raises the likelihood of a ruling against the tariffs, which have already collected over $100 billion from U.S. importers.

Even if the court rules against Trump, experts warn that alternative trade measures could quickly replace IEEPA tariffs. Options include Section 232 of the Trade Expansion Act, covering national security, or Section 122 of the Trade Act, permitting temporary duties. Companies, meanwhile, remain in limbo, struggling to plan investments amid persistent uncertainty.

Refunds for tariffs already collected could become a legal quagmire. While some small businesses may automatically receive refunds, most importers would need to navigate administrative protests, potentially taking months. Customs lawyers predict that even with clear instructions from the Supreme Court, the process could stretch up to a year.

The ruling, expected in early 2026, adds another layer of unpredictability for global trade, especially after recent U.S.-China trade truce and deals with Southeast Asian nations temporarily easing some tariffs. Economists caution that extended uncertainty may influence broader economic conditions, including investment decisions and trade-dependent industries.

As the case unfolds, businesses and policymakers alike are bracing for continued volatility, while the Supreme Court’s decision could redefine the limits of presidential authority in shaping international trade.

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