The United States Supreme Court is poised to deliver one of the most consequential economic rulings in decades. At stake: the legality of President Donald Trump's sweeping tariffs imposed under the International Emergency Economic Powers Act, and potentially more than $168 billion in duties that could be refunded to American importers if the court rules against the administration.

The decision, expected in January or February 2026, could reshape American trade policy regardless of which way the justices rule. During oral arguments in November, several justices appeared skeptical of the administration's legal theory—but trade experts say even a ruling against Trump may not bring the relief importers are hoping for.

The Legal Question

At the heart of the case is whether IEEPA—a 1977 law designed to give presidents broad authority to address national emergencies—actually authorizes the imposition of tariffs. The law grants the president power to "investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit" various transactions. Notably, it never mentions the word "tariff."

President Trump invoked IEEPA to declare national emergencies justifying tariffs on Canada, Mexico, China, and eventually a 10% baseline tariff on imports from all countries. The administration argued that trade imbalances and dependence on foreign supply chains constitute national emergencies warranting emergency powers.

Both the Court of International Trade and the Federal Circuit have ruled that IEEPA does not authorize tariff imposition. The Trump administration appealed to the Supreme Court, which heard arguments in November in the case styled V.O.S. Selections v. Trump.

"IEEPA does not mention the word 'tariff' and no president has ever relied on the act to justify broad-based tariffs on other nations."

— From the lower court ruling in V.O.S. Selections v. Trump

What's at Stake

The financial implications are staggering. Through December 5, 2025, the U.S. government had collected $259 billion in tariff revenue under the IEEPA framework. The Tax Policy Center estimates that if the Supreme Court strikes down the tariffs and they are not replaced under alternative legal authority, American households could save an average of $1,200 in 2026—amounting to $1.4 trillion in reduced taxes over ten years.

For importers who have paid duties under protest, a ruling against the administration could trigger a massive refund process. The Court of International Trade has confirmed it has authority to order the government to refund tariffs through a process called reliquidation if they are ultimately held unlawful.

CBS News analysis suggests potential refunds could reach $168 billion or more, depending on how far back the court allows claims to reach.

A Divided Court

During oral arguments, several justices expressed skepticism about the administration's expansive interpretation of IEEPA. Justice Elena Kagan questioned whether the law's language could reasonably be stretched to cover tariffs. Chief Justice John Roberts appeared troubled by the precedent that would be set by allowing presidents to impose major taxes through emergency declarations.

However, other justices seemed more sympathetic to the government's position, emphasizing judicial deference to the executive branch on national security matters and the historically broad interpretation of presidential emergency powers.

Why a Ruling Against Trump May Not End Tariffs

Here's the twist that many observers miss: even if the Supreme Court rules that IEEPA tariffs are unlawful, most of the tariffs could likely survive under alternative legal authority.

Trade experts point to several statutes the administration could invoke:

  • Section 232 of the Trade Expansion Act (1962): Allows tariffs to protect national security; already used for steel and aluminum duties
  • Section 301 of the Trade Act (1974): Permits tariffs in response to unfair trade practices; basis for original China tariffs
  • Section 201 of the Trade Act (1974): Allows temporary tariffs to protect industries from import surges

"High tariffs on America's trading partners are likely to remain in place even if the Supreme Court rules that President Trump improperly invoked federal emergency powers," noted trade attorney Jennifer Hillman, a former member of the World Trade Organization Appellate Body. "The administration has multiple legal arrows in its quiver."

The Refund Process

For businesses that have paid tariffs and are hoping for refunds, the process would be complex and lengthy even with a favorable Supreme Court ruling. Importers would need to have properly filed protests with Customs and Border Protection, maintained documentation, and potentially engage in administrative proceedings to recover duties paid.

Legal experts recommend that affected businesses:

  • Review their customs records to identify IEEPA-based duties paid
  • Ensure protests were properly filed within required timeframes
  • Consult with trade counsel about potential claims
  • Monitor the Supreme Court decision closely for immediate next steps

Economic Uncertainty Persists

Regardless of the legal outcome, the tariff saga has created significant uncertainty for American businesses. The average tariff rate the U.S. imposes has soared to 18%—the highest since 1934—up from just 2% in January 2025.

JPMorgan economists note that while businesses absorbed roughly 80% of tariff costs in 2025, they're increasingly passing those costs to consumers. By late 2026, JPMorgan projects that ratio could flip, with consumers bearing 80% of the burden.

Goldman Sachs estimates tariffs have already added half a percentage point to inflation and expects another three-tenths of a point impact in the first half of 2026.

What Happens Next

The Supreme Court typically issues major rulings on Mondays, with the most significant decisions often saved for the end of the term. However, given the pressing economic implications, legal observers expect a decision relatively early in 2026—likely within the next four to six weeks.

For investors, businesses, and consumers, the waiting continues. The court's ruling will determine not just the fate of hundreds of billions in potential refunds, but the legal framework for presidential trade authority for generations to come.

In the meantime, the tariffs remain in effect, businesses continue paying duties, and the economic impact compounds with each passing day.