The ruling has highlighted the complexity of unwinding a major trade policy shift – but what are the next steps for the companies involved, as well as their financiers?
The US Supreme Court landed the Trump administration a severe blow last week, determining that the so-called Liberation Day tariffs, launched in April last year under the International Emergency Economic Powers Act (IEEPA) – which gives a president the power to regulate trade in response to an emergency – were unlawful.
Now, the government could be on the hook for US$175bn or more in tariff refunds, with several high-profile companies among the more than 1,400 that have filed protective claims with the Court of International Trade (CIT). Names include global transportation company FedEx, retailer Costco, tiremaker Goodyear and French beauty group L’Oréal.
But the judges’ ruling has sharpened focus on the complexity of unwinding a major trade policy shift, and on what the practical next steps will be for the companies involved – as well as their financiers.
Refunds
Crucially, the Supreme Court’s ruling doesn’t go any further in explaining the issue of refunds and whether or how to issue them, notes Greg Husisian, trade attorney at Foley & Lardner.
Instead, the case has been remanded back to the CIT, which will decide on whether it has the authority to issue a nationwide injunction that would order refunds to every importer who paid IEEPA tariffs, or only those that have filed protective filing actions at the CIT.
Nevertheless, over 2,000 such claims have already been filed “and this is likely to sharply increase next week”, Husisian says. Another concern is whether refunds “can be issued for entries that have already liquidated, which normally means the duties are final, or for all entries”.
Additionally, refund eligibility is tied to ‘importer of record’ status. This has raised concerns among distributors and other downstream supply chain partners like retailers, which also absorbed the cost of tariffs but might now be excluded unless contractual protections were in place.
This opens up issues such as contractual risk allocation between importers, suppliers and buyers, who bears duty cost risk under instruments like letters of credit, and the potential insurance claims for wrongful tariff costs – all of which are yet to be determined.
Ultimately, experts believe it is “unlikely that the US importers will pass any relief to suppliers”, says ODI Global research fellow, Prachi Agarwal.
How long the whole process will take is another major unknown. Any refund process would include filing protests with US Customs and Border Protection, and while the customs agency does have the bandwidth to process large-scale retroactive refund claims, Agarwal says that “given the sheer volume of such cases, there are hints that it may take 12-18 months”.
“We know the value of the refunds will be high, so perhaps they will use a staggered system of payouts distributed over time and in magnitude,” Agarwal says. But the already litigation-heavy process could be further hampered by the administration’s signals “towards lengthier procedures to perhaps dissuade the claimants”.
Financial impact
From a trade finance perspective, there are questions over what impact the ruling could have on corporates’ cash flow and their credit needs.
US Bank’s head of trade and working capital sales origination, Michael Stitt, notes it is “early innings yet”, and that he doesn’t see a “significant impact on how clients finance working capital or their pricing”.
“Except for rare instances, I did not see appreciable pressure on credit capacity, risk appetite or pricing resulting from elevated tariffs,” he says.
“If anything, pressures may reduce if the US administration is limited in its ability to unilaterally set tariff policy,” Stitt says, though adds it “remains to be seen what existing law the administration may try to leverage as a mitigant”.
There are still questions around the ramifications for importers that factored tariffs into their inventory costs. However, Stitt explains that “borrowing bases that include inventory with embedded tariff costs will get smaller if those costs are no longer present but the funding need also reduces in the same proportion”.
“So, probably no net impact.” On the other hand, corporates could boost their bottom lines by maintaining prices rises triggered by previous tariffs, he says.
From a wider economic impact point of view, refunds would be issued only to the US importers by the customs agency and “not to the exporter that may have cut margins, nor to the US consumer that paid higher prices for the imported goods”, notes ODI Global’s Agarwal.
Some sectors might be in for bigger gains – for instance, “maximum duties were paid for imports of machinery, mechanical and electrical appliances and garments”, among others, Agarwal says.
But it is still “very difficult to say how the large the refunds will be, and whether they will be applied retrospectively”.
“The data shows that the customs duties for these imports were on shows that the customs duties for these imports was on an average 11.3% of total import values in December 2025 – this is a large value in dollar terms (approximately US$18bn) that will be injected back into the importers,” she adds.
In terms of the impact on retail prices and overall inflation, “it is possible that the importers pass on the ‘lower price’, without the additional tariff duty, to the consumers”, Agarwal explains.
“We might start seeing this in the CPI data from March or April once it becomes clearer how the [Supreme Court] decision pans out,” she adds – but “this will be from the lower customs duties (only 15%) and not necessarily from the refunds”.
What next?
Although the Supreme Court ruling is a major development, there is much more litigation on the horizon. Trade lawyer Husisian says CBP will likely continue to collect all IEEPA tariffs until they are replaced by new tariffs as announced by President Trump. The customs agency will also probably “hold onto all previously collected tariffs, while the CIT decides what should happen on the topic of refunds”, he believes.
“There likely will only be a refund of the previously collected IEEPA tariffs when there is a final, unappealable ruling, which could involve further rounds of briefing and oral arguments at the CIT, an appeal to the US Court of Appeals for the Federal Circuit, and then a potential appeal (again) to the Supreme Court.”
The Trump administration has already indicated that it will pivot to other tools to sustain its tariff policy. Trump has said there will be a new 10% global tariff using Section 122 of the Trade Act of 1974.
But “any use of this act also is likely to be challenged, given that it never has been used before and is intended to address ‘large and serious United States balance-of-payments deficits problems’ and not necessarily trade deficits”, Husisian says.
Additionally, these tariffs can be used for only 150 days under the statute, meaning it is unclear what would happen after that time has passed.
At the same, the government will focus on safeguarding the agreements it has since struck with countries like the UK and Japan, which saw tariffs on their imports trimmed.
But ultimately, this ruling could further shake other countries’ confidence in US trade policy stability and its effects on business, experts claim.
“Trade partners have said that the US offer no legal certainty on how the trade policy will apply, which increases uncertainty,” Agarwal says.
“This was a major win for the global trading system as it showed that the president does not have unlimited powers to impose tariffs on other countries; however, tariff uncertainty has not gone away,” adds John Ferguson, head of the Future of Trade initiative at UK-based research group Economist Impact.
“Supply chain leaders will continue to face uncertainty and must still focus on a ‘world minus one’ strategy. That means having one strategy to account for US policy volatility and another for more stable, growing markets.”
