Supreme court decision leaves IEEPA tariffs and $175 billion locked in legal limbo, treasury warns
The Supreme Court's recent decision has upended the administration's use of emergency trade authority and left a mass of tariff revenue in question, producing what officials describe as supreme uncertainty over refunds and future levies. That legal shift matters now because an executive order imposing a new 10% global tariff went into effect hours after the ruling, even as Treasury and trade officials brace for lengthy litigation and international fallout.
Supreme Court ruling: scope and immediate legal effect
Justices handed down a 6-3 decision on Friday that the president overstepped his authority by using the International Emergency Economic Powers Act to impose sweeping global tariffs. The court specifically found the Oval Office could not use the IEEPA to levy duties on trading partners, a determination that has pushed questions about millions — and billions — of dollars of collections into litigation. The decision prompted a weekend of administrative updates as the White House scrambled to find new legal footing to continue collecting import duties.
New 10% tariff order and the short-term authority being used
Hours after the ruling, the president signed an executive order that took effect from February 24 to impose a temporary 10% global import levy. The order said the duty was intended to "address fundamental international payments problems and continue the Administration's work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers. " The administration is applying the levy under Section 122 of the 1974 Trade Act, which allows the president to impose a charge for 150 days without congressional approval. The new 10% rate is lower than the 15% the president had indicated he would seek, and an official directive to increase the rate has not yet been issued.
How much money is at stake: $130 billion, $164. 7 billion and a $175 billion refund estimate
Estimates of the sums tied up differ across analyses. One assessment notes the United States has already collected at least $130 billion in tariffs using the IEEPA. A separate budget-model analysis projects 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. Economists and officials warn that separating IEEPA proceeds from existing customs duties and levies under prior and new trading agreements will complicate any effort to determine who is owed refunds.
Treasury and trade officials on refunds, courts and alternative authorities
Treasury Secretary Scott Bessent, speaking at the Economic Club of Dallas in the aftermath of the ruling, said the court had not ruled on how IEEPA-generated funds should be handled and that that question will be pushed to international trade courts. He warned the legal process could be protracted: "My sense is that could be dragged out for weeks, months, years, so … we'll see what happens there. " Bessent also suggested other legal authorities — Section 232 (national security) and Section 301 (unfair trade practices) — could be used to continue generating tariff revenue and that revenue generation under those paths "won’t drop or slow. " On the prospect of refunds reaching consumers, he added bluntly: "I got a feeling the American people won’t see it. "
U. S. Trade Representative Jamieson Greer, asked in a Sunday interview whether the White House will fight compensation claims or pay refunds, said: "So it's a matter for the courts. They created the situation, and we'll follow whatever they say to do. "
Business and international reaction: warnings of chaos and retaliation
Market and policy analysts warned the rapid legal and policy shifts increase risk and uncertainty for businesses. Carsten Brzeski, an analyst with ING, said the fast-changing tariff measures "simply adds to the chaos and mess" and raises the risk that trading partners will retaliate, elevating the chance of a broader trade war. The president has been outspoken about the ruling, calling it "ridiculous, poorly written, and extraordinarily anti-American, " and on Monday threatened to impose higher tariffs on countries that "play games" with recent trade deals.
Countries and blocs are already reassessing their dealings with the United States: some reciprocal action is not off the table if U. S. tariff commitments are not honored, and one major regional actor said it would suspend ratification of a deal struck over the summer. The chair of the European Parliament's delegations for relations with the U. S., Brando Benifei, urged collective response if conditions worsen: "If we get worse conditions then we need to react... I think you should demand respect... try to work a bit together. " The broader trade picture matters: the U. S. trade deficit widened by 2. 1% compared with 2024 and reached roughly $1. 2 trillion last week, a fact the administration cites in defending the need for tariffs.
Who might benefit if refunds are paid, and industry skepticism
Some optimists have suggested refunds could act as an economic stimulus because U. S. importers — the entities that made payments to the Treasury — would receive the cash influx. That, in theory, could lead to lower prices if corporations pass savings to consumers. But UBS chief economist Paul Donovan warned clients that rebate hopes 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. "
