A Trump Supreme Court tariff defeat would add to trade uncertainty

By David Lawder, Andrea Shalal and Ann Saphir

WASHINGTON (Reuters) -The U.S. Supreme Court's tough questioning of President Donald Trump's global tariffs fueled increased speculation that they will be struck down, but raised the specter of additional chaos as he is widely expected to shift to other trade tactics in the wake of an adverse ruling.

On Wednesday during ​oral arguments, Supreme Court justices cast doubt on Trump's authority to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), which contains no references to tariffs - only language ‌on regulating imports during national emergencies declared by the U.S. president.

"Based on the questions posed by the justices, the IEEPA tariffs appear to be in jeopardy," said Damon Pike, a principal with BDO USA's customs and trade services practice.

He added that all the ‌court's justices, except Samuel Alito and Clarence Thomas, "seemed skeptical that IEEPA gives President Trump the power to levy unlimited tariffs on every product imported from every country around the world."

But Pike said if the Trump administration loses, it will simply invoke other trade laws, a view widely shared by trade lawyers, senior Trump administration officials, importing companies and analysts.

These groups had just started to get used to the idea of a somewhat more stable trade environment, bolstered by a new year-long U.S.-China trade truce and more U.S. deals with southeast Asian countries that reduced the IEEPA tariff rates to more manageable levels.

Companies have clamored for certainty and predictability on tariffs so that they can plan ⁠their investments, but Conference Board policy executive David Young said he did not ‌see relief in sight.

"We've still got no clarity - CEOs remain kind of precariously positioned around what the future looks like," said Young, who briefed about 40 CEOs following the Supreme Court arguments. "Even if it goes against IEEPA, the uncertainty still continues."

A ruling is unlikely before early 2026, Young said, and ‍companies are totally in the dark about potential refunds of the more than $100 billion in IEEPA tariffs paid so far if Trump loses.

POTENTIAL REFUNDS "A MESS"

The issue of refunds was raised by Justice Amy Coney Barrett, who said that it "could be a mess" for the courts to administer refunds to U.S. importers who have paid tariffs that were declared illegal.

Neal Katyal, the lawyer representing five small businesses challenging the tariffs, said that these firms would get their refunds automatically if the court ruled ​against the Trump administration, but all other companies would have to lodge administrative protests to get money back. "It's a very complicated thing" that could take a long time, he added.