Supreme Court ruling escalates supreme doubts over $175 billion in IEEPA tariffs
Last week’s supreme Court decision that the administration could not use the International Emergency Economic Powers Act to levy duties has left roughly $175 billion of collections tied up and consumers unlikely to see tariff rebate checks anytime soon. The ruling forced rapid policy shifts: the administration is shifting to a different trade law and a 10% global tariff is set to begin as officials pursue a separate path toward a possible 15% rate.
Supreme Court decision and the Oval Office response
The supreme Court on Friday ruled that President Trump could not use the International Emergency Economic Powers Act, or IEEPA, to impose sweeping global tariffs, a decision the Oval Office called for urgent follow-up. The ruling was described as unlawful for that use of IEEPA and prompted a weekend of updates from the administration as it scrambled to find new legal footing to continue collecting import duties. Members of the administration publicly signaled they will take the matter into the courts and explore alternative authorities.
How the IEEPA tariffs were rolled out: China, Canada, Mexico and "Liberation Day"
The tariffs challenged under the IEEPA were imposed in phases: they were initially imposed on China in February 2025, and a month later they were imposed on Canada and Mexico. April’s so-called "Liberation Day" tariffs also came under the IEEPA authority. Those dates and actions are central to the current disputes over which collections are subject to refunds and which are not.
Money at stake and Scott Bessent’s warning in Dallas
Economists and budget analysts project large potential refunds: the Penn Wharton Budget Model estimates up to $175 billion in potential refunds, reflecting cumulative IEEPA collections of roughly $164. 7 billion by January 2026 and collections running at about $500 million per day. Few households had expected a tariff rebate check from the White House, and Treasury Secretary Scott Bessent, speaking at the Economic Club of Dallas after the ruling, warned the funds are unlikely to reach consumers. Bessent said the supreme Court had not resolved how IEEPA-generated funds should be handled and that the question will be pushed to international trade courts; "My sense is that could be dragged out for weeks, months, years, so … we’ll see what happens there, " he said, later adding, "I got a feeling the American people won’t see it. " He also noted that using alternative authorities such as Section 232 for national security or Section 301 for unfair trade practices means tariff revenue generation itself may not drop or slow.
New tariff route: Section 122 memo, a 10% start and the push to 15%
After the IEEPA decision, the administration moved to a different trade law. On Friday the president announced a quick implementation of a 10% flat tariff for all trading partners under that new authority, and one day later he said he would raise the 10% worldwide tariff to 15%. The trade law the administration is turning to, Section 122, allows tariffs of up to 15% to be applied quickly, but only for up to 150 days. Hours before the new sweeping tariff was set to take effect, U. S. Customs and Border Protection sent a memo to importers saying the rate would be 10% at first and that it would apply to "every country for a period of 150 days, unless specifically exempt, " starting at 12: 01 a. m. ET Tuesday. A White House official confirmed that the message to importers was correct and said the global tariff will start at 10% while the administration works on raising it to 15% in a separate order the president will need to sign; the official did not have a timeline for when that would occur.
Reactions abroad, trade deals frozen and economic debate over refunds
The back-and-forth over tariffs has drawn sharp foreign responses. Bernd Lange, a top European Union lawmaker from Germany, wrote Sunday that the situation is "Pure tariff chaos from the U. S. administration, " adding that "No one can make sense of it anymore — only open questions and growing uncertainty. " As a result of the renewed uncertainty, the E. U. earlier Monday froze implementation of a massive trade deal reached with the president last summer. Other trading partners — India, China, Switzerland and the United Kingdom — are considering what to do next. Analysts and officials have noted that most of the trade framework deals the administration and foreign partners reached since early last year were built under the IEEPA, the 1977 law the supreme Court said was improperly used for last year’s sweeping tariffs.
There is also debate about who would receive any refunds and whether rebates would lower consumer prices. Optimists have suggested refunds could act as an economic stimulus because U. S. importers would receive the cash influx, and consumers might hope companies pass savings on. UBS chief economist Paul Donovan told clients that hopes of businesses passing rebates back to consumers may be naive: "Tariff rebates will increase the U. S. fiscal deficit, and act as a fiscal stimulus. Any rebates will be paid to U. S. importers (as they are the ones who made payments to the U. S. Treasury). With new tariffs coming in, it seems unlikely anyone will rush to lower prices to their customers. "
U. S. Trade Representative Jamieson Greer, in a Sunday interview, framed the next steps as a judicial matter: "So it’s a matter for the courts, " he said, adding, "They created the situation, and we’ll follow whatever they say to do. "
