Chaos and uncertainty: Trade expert Ann Harrison on SCOTUS tariff ruling fallout

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The business world is facing widespread uncertainty after the Supreme Court’s landmark 6–3 decision that President Donald Trump does not have the authority to unilaterally impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA).

U.S. Customs and Border Protection announced it will halt collection of the now-illegal “Liberation Day” tariffs at midnight EST tonight. Meanwhile, Trump immediately signed an executive order to impose a new global tariff of 10%; by Saturday, he had raised it to 15%. And today, he warned that any country that fails to abide by agreed-upon tariff deals would be met with “a much higher tariff, and worse.”

We asked Professor Ann Harrison, an international trade expert and former dean of the Haas School, to explain what the ruling means for business, and particularly for small businesses that were disproportionately affected by the tariffs.

Trump moved quickly to utilize other tools to keep taxing imports, including **Section 122 of the Trade Act of 1974***, which no president has ever invoked. Trump also said he would use other provisions and trade statutes that allow the president to impose tariffs on specific products and on an entire country. What will this mean for businesses?*

These new actions by President Trump will contribute to chaos and even greater uncertainty. Section 122 tariffs can only be imposed for 150 days unless Congress supports an extension. With all this uncertainty, companies will continue to find international trade more challenging than before. If the goal is to bring back manufacturing to the United States—which has not yet been happening due to the uncertainty—then targeted policies would be more effective. For example, a subsidy or tax credit for key sectors like semiconductors, autos, rare earths, and advanced manufacturing would be much more impactful than these broad tariffs.

Will this ruling trickle down to impact consumer pricing and how long might that take?

Trump has already imposed the new 15% tariffs, effective Tuesday, to take their place. Overall tariffs won’t fall that much—perhaps from an average 18% to 13%. So there will be some improvement but this could take six months. The overall continued policy chaos makes it difficult to predict the direction of import prices.

The federal government has collected more than $200 billion in tariffs since the start of last year. What does that scale of redistribution actually mean for U.S. businesses and supply chains?

The Supreme Court did not specifically discuss any refund process, but since Trump’s tariffs under IEEPA were ruled illegal then businesses have the legal basis for requesting refunds. The process would indeed be very time consuming and arduous. Tariffs have been paid by very large companies—for whom it might be easier to track the costs and afford the fees—and very small ones. For the smaller enterprises, it could be challenging as there is no formal structure in place for repayment. One small business owner in San Francisco, speaking to local news ABC7, suggested turning the tariff revenues to be reimbursed into tax credits. This is a good idea. Perhaps they could even be earmarked for the goal of restoring American jobs and manufacturing.

Small businesses absorbed a disproportionate share of the Liberation Day tariff costs, but major retailers like Costco and Revlon **filed preemptive lawsuits**** back in December to receive refunds and FedEx filed suit Monday. Does this ruling create a first-mover advantage for large corporations?**

There is no question that this ruling creates a first-mover advantage. The Supreme Court provided no details on reimbursement, and the government has shed many roles, making reimbursement even more complicated. Hence the idea for a tax credit for either job creation or manufacturing development, or both, makes good sense.

Could the government be required to issue refunds automatically, or will it effectively become a pay-to-play system where only companies that can afford litigation see their money back?

No one knows as yet what the process will look like.

Many large businesses invested heavily in shifting supply chains out of China or Mexico to avoid these specific tariffs. With a large portion of the tariffs struck down, will these investments make these companies less competitive than slower moving rivals?

We are in a new world. With new tariffs appearing daily, designing alternative supply chains is a good strategy regardless of the Supreme Court decision. The world for the last 80 years evolved to produce and export where it is most efficient—least costly. We are witnessing a transformation of global supply chains into a world where production will go where it is also most reliable and least likely to be hit with tariffs. So moving out of China continues to make economic sense.

Does this create a two-tier trade economy where some goods remain heavily taxed while others are suddenly duty-free?

Industry specific tariffs, which were imposed through other laws, are still in effect. This means that tariffs on autos and steel continue to be operating. All these new tariffs imposed under different regimes mean that importing has become more costly and uncertain. It’s hard to plan.

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