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US Supreme court rules against Trump tariffs; what does it mean for businesses?
Thousands of firms — and not just those that sued the administration — will decide whether to pursue refunds, as it means more than $175 billion in US tariffs could be refunded
- PUBLISHED: Fri 20 Feb 2026, 9:33 PM
- By:
- Reuters
Thousands of businesses won a hard-fought victory when the US Supreme Court ruled to overturn the White House's emergency tariffs. The process of getting refunds has only just begun.
In a decision that could ripple throughout the global economy for years, the court ruled that US President Donald Trump was not allowed to use the 1977 International Emergency Economic Powers Act to levy broad tariffs on imports.
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The corporate world has spent months adjusting to Trump's often-evolving trade policy and his central use of tariffs for his agenda, not just to address trade issues but also as a cudgel against other governments' policies and actions.
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Now, thousands of businesses — and not just those that sued the administration — will decide whether to pursue refunds, as it means more than $175 billion in US tariffs collected could be refunded, Penn-Wharton Budget Model economists said on Friday.
Stock markets rise
In the United States and Europe, stock markets rose, led by shares of affected companies, including Europe's luxury brands from LVMH to Hermes and Italian luxury outerwear group Moncler, all of which rose after the ruling.
"We don't have 100 per cent of the facts, but we've been waiting for this and so many people have, so it is definitely a good day," said Michael Wieder, co-founder of premium US-based baby products company Lalo, which plans to seek about $2 million in refunds. That process is expected to be slow.
Thousands of lawsuits
Companies across consumer goods, automotive, manufacturing and apparel have been hit particularly hard as they depend on low-cost production in China, Vietnam, India and other sourcing hubs. Trump's duties raise the cost of importing finished goods and components, squeezing margins and disrupting finely tuned global supply chains.
More than 1,800 tariff-related suits have been filed with the US Court of International Trade, which has jurisdiction over tariffs and customs matters, since April, compared with less than two dozen such cases in all of 2024.
Prominent plaintiffs include subsidiaries of Japan's Toyota Group, US big-box retailer Costco, tire maker Goodyear Tire Rubber, aluminum company Alcoa, Japanese motorcycle maker Kawasaki Motors and Paris-listed eyewear giant EssilorLuxottica.
Several lawyers said many more companies around the globe are likely to join the suits, having waited until the ruling to not draw unwanted attention from the White House. They'll join a queue of companies who could be waiting for months to years to recoup the billions of dollars in import duties.
"Companies face the challenge of gathering detailed import data to calculate the tariffs paid under various regimes, which were applied over different time periods. Even multinational firms may not have all their data neatly organised," said Nabeel Yousef, partner at law firm Freshfields.
Even with the Friday ruling, it's not as if "on Monday, companies are going to start getting checks in the mail," he said. The high tariffs have heaped costs on consumers already weary from several years of post-COVID inflation. The Federal Reserve Bank of New York said last week that 90 per cent of Trump's tariffs are borne by American consumers and companies, pushing back against the White House’s argument that the levies are paid by foreigners.
As of November, the effective US tariff rate was 11.7 per cent, compared with an average of 2.7 per cent between 2022 and 2024, according to the Yale Budget Lab.
Uncertainty remains
The logistics surrounding refunds is likely to be left to the US Court of International Trade, which means the claims are likely to be administratively complex, said International Chamber of Commerce Secretary General John Denton, adding that the ruling was "worrying silent" on that issue.
Trump officials have said they will use other authority to levy tariffs, including laws that allow the United States to protect against unfair trade practices or shield sectors crucial to national security. Several companies, business associations and attorneys said this would introduce more uncertainty in coming months.
"The odds that tariffs reappear in a revised form remain meaningful. Layer on potential tariff refunds, and you introduce a messy operational and legal overhang that amplifies economic uncertainty," said Olu Sonola, head of US economics at Fitch Ratings.
Germany's VDMA, which represents engineering machinery firms that have been hit by the tariffs, warned that the decision would in no way reduce uncertainty and that Trump had several other legal options to impose duties.
In addition, the automotive sector will continue to face significant tariffs that were not levied under IEEPA. Import tariffs of 25 per cent on vehicles shipped across the border from either Mexico and Canada, for example, were imposed last year based on national-security grounds.
Still, attorneys say that likely thousands of auto parts shipped into the US from countries subject to Trump’s reciprocal tariffs are being hit with the levies, inflating expenses for both parts suppliers and carmakers.
Some US companies, anticipating a slow refund process, have opted to sell their rights to collect those refunds to outside investors. This involves taking a small payment upfront — around 25 to 30 cents on the dollar — while agreeing to forfeit the rest to investors should the tariffs be overturned, Reuters reported in December.
German logistics firm DHL said that it will use its technology to ensure that their customers get refunds "accurately and efficiently" if they are authorised. It is also not clear whether companies will also lower prices to assuage middle- and lower-income US consumers, who have reined in their spending in response to higher costs.
"We would definitely be filing for a refund as I imagine every other importer would. I highly doubt prices will go down though. That rarely occurs," said Jason Cheung, CEO of small toymaker Huntar Co, which is one of the plaintiffs.
