The recent U.S. Supreme Court ruling on the Trump administration tariffs was expected, but nonetheless has left many questions unanswered.
In the wake of the decision, speakers at a recent online trade and tariff briefing organized by World Trade Center Utah made a few things clear, including that tariffs aren’t going away.
The 6-3 court ruling struck down tariffs the administration had imposed under the International Emergency Economic Powers Act (IEEPA), but the administration already has turned to other tariff tools they have available. The court decision also provided no guidance about rebates of tariffs collected illegally under the IEEPA approach.
The online briefing took place minutes after the ruling.
The court ruled that the White House had exceeded its authority under IEEPA. “What it means is, the IEEPA tariffs that have been applied over the last year or so were done without authority, so they were done illegally,” said Troy Keller, partner at Dorsey & Whitney. As for whether companies will receive rebates, “the very short answer is of course. If the tariffs were taken without authority, then a company should get them back. But it’s not as easy of an answer as that, of course.”
The Supreme Court made it clear that the question about rebates would be determined by the Court of International Trade, he said. Some estimate that over $130 billion had been collected prior to the Supreme Court ruling.
But other questions remain. President Trump has suggested that he would apply tariffs under other mechanisms, even making some of them retroactive. “That would just lead to a whole lot more chaos and litigation,” Keller said. “Still a lot to kind of ‘wait to see what
happens.’”
Trump had said months ago that he had backup tariff plans if the court ruled against him, but those options are more complex and less speedy than under IEEPA. Some apply to steel and aluminum imports, as well as to the aerospace and pharmaceutical industries. Some are country-specific, as is the case with tariffs on Chinese goods.
The president acted quickly. During the weekend after the ruling, he announced a new global tariff of 15 percent under part of the Trade Act of 1974 and a 10 percent tariff on imports under the Trade Expansion Act, which was boosted to 15 percent the next day.
But Keller noted that the Trade Act tariffs are limited to 15 percent and 150 days. “That gives them pretty broad authority but it’s limited,” he said.
“There are a few tools they have. Some of them are slower,” he said. “It doesn’t mean tariffs are going away — far from it. I think there are a lot of reasons why the White House will double down and will exercise some of these other authorities.”
Another option is for the administration to work with Congress to establish tariffs.
“I think we’re going to see perhaps some reach-outs there to Congress from the White House: ‘Let’s figure something out that helps us more readily accomplish our goals.’ But I’m not sure. I think it could be that the White House, with the tools that it still has, will just continue to go its own way.”
Among the companies hit with tariffs has been Stadler Rail Group, a Swiss-based rail car manufacturer with nearly 19,000 workers at 22 locations worldwide. Its North American headquarters are in Salt Lake City, with more than 700 employees.
Martin Ritter, CEO of Stadler US Inc., said the company may seek rebates on already paid tariffs but mostly is concentrating on the future.
“Unfortunately, the decision this morning will not bring more certainties than we had before, at least short term,” he said. “There are still enough tools in the [administration’s] shed to keep the pressure high. … The volatility and uncertainties are pretty high and I think an issue generally. So, we have the Supreme Court ruling in the meantime, but I’m not sure we have more certainty currently, so we’re now waiting for how this will be applied and what’s really the way forward but also backwards, so it doesn’t make it easier.”
Keller said terms of the United States-Mexico-Canada Agreement “will continue to be pretty important,” as well as agreements between the U.S. and
individual nations.
“There are so many angles to this,” he said. “There’s the geopolitical. We’ve crossed the Rubicon. We’re not going back to these global, world-trade type arrangements. It’s going to continue to be these bilateral deals.”