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WASHINGTON (AP) — The Supreme Court’s rebuke of President Donald Trump’s most sweeping tariffs means the administration cannot keep using the emergency authority it relied on to impose new import taxes “on a whim,” trade lawyers and analysts said. But they also said the ruling is unlikely to end the uncertainty over Trump’s trade policy that has already disrupted business planning, and they pointed to legal fights ahead over which tariff powers can replace the ones the court rejected.
Ryan Majerus, a trade lawyer at King & Spalding and a former U.S. trade official, said the tariff overhaul has only increased business confusion. “It’s only gotten more complicated for everybody,” Majerus said, describing continuing questions about how the president will rebuild tariff tools using other laws and whether those efforts will survive legal challenges.
Even as the court decision removed one major pathway, Trump’s response after the ruling was described as fast and inconsistent. On Friday, he said he would use other legal authority to impose 10% levies on imports from other countries. On Saturday, he said the levies would rise to 15%, but U.S. Customs and Border Protection began collecting levies at 12:01 a.m. Tuesday at 10%, according to the report.
The ruling also changed what the administration can no longer do. The sweeping tariffs Trump had justified under the 1977 International Emergency Economic Powers Act, or IEEPA, were part of an effort to address persistent U.S. trade deficits. But the court decision removed the ability to invoke that emergency law for new tariff changes, even if officials and lawyers expected other authorities could be used to recreate much of a tariff wall.
One alternative discussed by trade lawyers is Section 122 of the Trade Act of 1974, which allows tariffs of up to 15% for up to 150 days. Trump moved toward that option immediately after the defeat in court, but some critics said it cannot function as a substitute for the IEEPA tariffs used to target the trade deficit. Bryan Riley of the National Taxpayers Union argued that Section 122 was intended to address what his group called “fundamental international payments problems,” and he said the provision has been “effectively rendered obsolete” because the U.S. currency is no longer tied to gold, the mechanism the provision was built around.
Other lawyers said Section 301 of the same 1974 trade act could offer a more durable path. Section 301 gives the United States authority to impose tariffs after accusing countries of engaging in “unjustifiable,” “unreasonable” or “discriminatory” trade practices. In a statement Friday, the U.S. Trade Representative Jamieson Greer said the administration was launching a series of Section 301 investigations after the Supreme Court loss, and Majerus pointed to how similar China tariffs from Trump’s first term were kept in place, calling them “sticky tariffs.”
The Supreme Court decision also raised questions about the trade deals Trump negotiated last year by using the threat of potentially unlimited IEEPA tariffs to squeeze concessions from partners, including the European Union to Japan. The European Union’s trade deal with Trump was already on hold after the court ruling, and European lawmakers delayed a vote on ratifying the pact while seeking clarification. They were concerned that Trump’s new Section 122 global tariff could stack on top of “most favored nation” tariffs under existing World Trade Organization rules, potentially lifting U.S. tariffs on EU imports above the 15% level Europeans had agreed to last year.
In remarks reported Monday, commission spokesman Olof Gill said: “A deal is a deal.” He added that Europe was telling the United States to “clearly show to us what path you are taking to honor the agreement.” The report also noted the United Kingdom’s deal last year set 10% tariffs on its exports to the United States, and it raised the question of whether that would increase to 15% under the new approach.
Majerus and other analysts said partners may still feel pressure to stay within the commitments made last year, because the United States could use other tools such as Section 301 tariffs to punish alleged violations. “They’re going to pretty leery of rocking the boat on their deals,” Majerus said, adding that violations could become a basis for 301 action. Greer, in his statement, said the administration was “confident that all trade agreements negotiated by President Trump will remain in effect.”
The uncertainty extends beyond tariff authority and deal commitments to the question of money already collected. In its ruling, the Supreme Court did not spell out what should happen to the revenue from the IEEPA tariffs, which the report said totaled $133 billion as of mid-December. Instead, it left the refund issue for lower courts and for Customs and Border Protection, the agency that collects import taxes, to address, with the report saying hundreds of companies are already lined up to seek refunds and that repayment could take months or years.
“The whole thing’s going to be a mess,” Majerus said. The report also cited strategists Thierry Wizman and Gareth Berry at Macquarie Investment Bank, who wrote that Congress could order Customs to use a simple “one-click” approach to refunds. Otherwise, they warned, the administration could make the refund process more burdensome by requiring importers to file paperwork stacks or lawsuits to recover the money.
Normally, analysts said, lower tariffs resulting from the court decision might be expected to provide some lift to the economy. But Mike Skordeles, head of U.S. economics at Truist, said any benefit would likely be outweighed by the economic drag from uncertainty. “Any benefit you would get from that is more than offset to a modest negative from the uncertainty front,” Skordeles said.
AP Economics Writers Christopher Rugaber in Washington and David McHugh in Frankfurt, Germany, contributed to this report.