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Home » Experts warn that tariff refunds could take years as U.S. Supreme Court ruling continues | Trade War News
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Experts warn that tariff refunds could take years as U.S. Supreme Court ruling continues | Trade War News

Editor-In-ChiefBy Editor-In-ChiefFebruary 20, 2026No Comments5 Mins Read
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The U.S. Supreme Court’s ruling against President Donald Trump’s sweeping global tariff policies leaves unanswered questions about how the process will lead to refunds of funds raised over the past few months through tariffs imposed on most of America’s trading partners.

In a 6-3 decision handed down Friday, Chief Justice John Roberts upheld a lower court’s ruling that the president’s use of the International Emergency Economic Powers Act (IEEPA) exceeded his authority.

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The high court did not say how the federal government would refund the estimated $175 billion collected under the tariff. In a dissenting opinion, Justice Brett Kavanaugh warned that issuing refunds would have practical difficulties and said it would be “disruptive.”

The case will now be referred back to the International Trade Court to oversee the refund process.

Importers have already filed more than 1,000 cases in the Trade Court seeking refunds, and more cases are expected to follow. Legal experts say the government is likely to ask importers to apply for refunds individually. This process could place an undue burden on small and medium-sized businesses affected by the tariffs.

Georgetown University law professor Greg Shafer told Al Jazeera: “The government is probably not going to voluntarily repay the money they took illegally. Rather, they’re going to file a formal protest and have everyone request their money back through various processes. They’re going to delay things procedurally for as long as possible. Hiring lawyers and going through these steps costs money and time.”

“Large companies that have been preparing for this eventuality will eventually get their money back, but smaller importers may shrug their shoulders on a cost-benefit analysis that it’s not worth the trouble to get their illegally levied taxes repaid.”

Trump’s path forward

Despite Friday’s ruling, other comprehensive taxes remain in place. President Trump had invoked Section 232 of the Trade Expansion Act of 1962, imposing sectoral tariffs on steel, aluminum, automobiles, copper, lumber, kitchen cabinets and other products around the world.

On Friday, President Trump announced an additional 10% tariff for 150 days worldwide to replace some of the canceled emergency missions. President Trump said the order would be made under Section 122 of the Trade Act of 1974, and the tariffs would exceed any tariffs currently in place.

The law allows the president to impose tariffs of up to 15% on any country for up to 150 days in connection with “large and serious” balance of payments problems. It does not require an investigation or impose any other procedural restrictions.

The President also has other legal tools available to continue aggressively taxing imports.

“Our trading partners were well aware of the risks the president faced when using IEEPA as the basis for reciprocal and other tariffs. Nevertheless, they chose to enter into deals with the United States, persuaded by the U.S. government that other statutes would be leveraged to maintain tariffs,” Wendy Cutler, deputy director of the Asian Social Policy Institute, told Al Jazeera in a statement.

“With respect to China, the USTR remains active in its Section 301 investigation into China’s compliance with the Phase 1 agreement, which could be the centerpiece of Beijing’s backup plan.”

The president is scheduled to travel to Beijing next month to meet with Chinese President Xi Jinping to discuss trade.

“The two main options include Section 301 of the Trade Act of 1974, which is the traditional mechanism for imposing tariffs in response to unfair trade practices by other countries. It requires investigation and reporting, but ultimately gives the president considerable discretion to impose tariffs. It has been used and will continue to be the most frequently used measure,” said Schaefer, the law professor.

But he noted that the administration’s tariff options cannot be applied retroactively, meaning new tariffs would not apply to duties already paid, but only to future imports.

Raj Bhalla, a law professor at the University of Kansas, argues that there are other remedies at the president’s disposal besides Section 122. Barra said President Trump could use Section 338 of the Tariff Act of 1930, also known as the Smoot-Hawley Act. This would allow the president to impose 50% tariffs to combat other countries’ discriminatory trade practices.

“Each option comes with procedural hurdles,” Barra said.

parliamentary pressure

Roberts wrote that imposing tariffs would require the president to “demonstrate clear Congressional approval.” The ruling increased pressure on both Trump’s supporters and critics in Congress to clarify the scope of executive trade authority.

“What a great ruling for a reckless government department. The current trend in the government is toward abdication, but the court has ordered Congress to do its job,” a former White House Office of Management and Budget official told Al Jazeera following the decision.

“Congress would need to enact specific legislation or declare war that would give the president emergency powers to impose tariffs.”

“Congress and the Administration will determine the best path forward in the coming weeks,” House Speaker Mike Johnson said in a post on social media platform X.

In contrast, Senate Democratic leader Chuck Schumer welcomed the ruling, saying it would “finally give families and small businesses the relief they deserve” and that President Trump “must end this reckless trade war for good.”

But how that money will be repaid will require Congressional intervention if it has already been spent.

“If it’s spent, that money has to be reallocated by Congress. Congress has to decide how much to pay importers, pass laws to fund it, and create a mechanism for repayment. There’s also the question of who gets that right. Is it just the importers, or does it extend to the end consumer? Where does that end?” Babak Hafezi, a professor of international business at American University, told Al Jazeera.

“This is not a 24-hour fix. It will likely take years, even a decade, to resolve all the problems that this less-than-year-old law imposes on the American people.”



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