Supreme Court Strikes Down Tariffs, White House Retaliates
The U.S. Supreme Court struck down the Trump administration's April 2025 tariffs, ruling the President cannot independently impose them without Congress. The White House responded by instituting a new 15% tariff on all imported goods and a 10% global surcharge. In response to the ruling, the Senate is advancing a bill to refund an estimated $175 billion in tariffs that were collected.
The Supreme Court's 6-3 decision in *Learning Resources Inc. v. Trump* found the administration's use of the International Emergency Economic Powers Act (IEEPA) to be an overreach of executive authority. Chief Justice John Roberts, joined by two of Trump's own appointees, argued the power to levy taxes, including tariffs, is explicitly granted to Congress by the Constitution. The White House's immediate retaliation invokes Section 122 of the Trade Act of 1974, a statute designed to address "balance-of-payments deficits." This authority is more limited than IEEPA, capping the new tariffs at 15% and imposing a 150-day time limit before requiring Congressional approval for any extension. In response to the ruling, the "Tariff Refund Act of 2026" was introduced by Senate Democrats Ron Wyden, Ed Markey, and Jeanne Shaheen. The legislation would require U.S. Customs and Border Protection to issue full refunds of the illegally collected tariffs, with interest, within 180 days of the bill's passage. The bill specifically directs authorities to prioritize small businesses for repayment and to coordinate with the Small Business Administration to provide support. This is intended to streamline the process for smaller importers who were disproportionately affected by the tariffs and may lack the resources for complex administrative claims. For retailers, the constant shifts in tariff regimes create significant supply chain uncertainty and price volatility, impacting everything from raw materials to finished packaging. The beauty industry, which relies on complex global sourcing for both ingredients and components, is particularly exposed to these disruptions. The new, uniform tariff structure under Section 122 could realign competitive dynamics. Some trading partners in the EU and Asia may now face a lower effective rate than under previous, country-specific deals negotiated under IEEPA, potentially altering the sourcing cost calculations for importers.
