Following a significant ruling by the US Supreme Court, numerous businesses have achieved a notable victory as emergency tariffs imposed by the White House were overturned. The process of seeking refunds is now commencing.
The court’s decision, which may have long-lasting implications on the global economy, stated that US President Donald Trump overreached by implementing extensive tariffs on imports using the 1977 International Emergency Economic Powers Act.
Businesses worldwide have been grappling with the ever-changing trade policies under Trump’s administration, where tariffs were not only utilized to tackle trade concerns but also as a tool against foreign governments’ actions and policies.
Now, a significant number of businesses, beyond those who took legal action against the government, are contemplating whether to pursue refunds, potentially leading to the reimbursement of over $175 billion in US tariffs collected, as indicated by economists from the Penn-Wharton Budget Model on Friday.
Stock markets in the US and Europe experienced increases, primarily driven by the surge in shares of impacted companies, including renowned luxury brands like LVMH (LVMH.PA), Hermes (HRMS.PA), and Moncler (MONC.MI) from Italy, all of which saw a rise post the court’s decision.
Numerous Legal Actions
Businesses across various sectors such as consumer goods, automotive, manufacturing, and apparel have been significantly affected, particularly those reliant on cost-effective production in countries like China, Vietnam, and India. The tariffs imposed by Trump have increased the expenses associated with importing finished goods and components, thereby impacting profit margins and disrupting intricate global supply chains.
Since April, over 1,800 lawsuits related to tariffs have been filed with the US Court of International Trade, which holds authority over tariff and customs issues, a substantial increase compared to fewer than 24 cases in the entirety of 2024.
Prominent plaintiffs include subsidiaries of Japan’s Toyota Group, major US retailer Costco (COST.O), tire manufacturer Goodyear Tire & Rubber (GT.O), aluminum company Alcoa (AA.N), Japanese motorcycle producer Kawasaki Motors, and Paris-listed eyewear giant EssilorLuxottica (ESLX.PA).
Legal experts anticipate more companies worldwide to join the lawsuits post the ruling, as many waited to avoid unwanted attention. These companies could face a lengthy wait, spanning from months to years, to reclaim the substantial import duties. The refund process is expected to be gradual, with early litigators likely to receive repayments sooner.
“Companies are challenged with gathering intricate import data to calculate the tariffs paid under various regimes, each applied during different periods. Even multinational corporations may encounter difficulties in organizing all their data efficiently,” noted Nabeel Yousef, a partner at Freshfields law firm. He highlighted that despite the ruling on Friday, immediate refund disbursements are unlikely to occur, stating, “on Monday, companies are going to start getting checks in the mail.”
The elevated tariffs have imposed additional burdens on consumers already grappling with inflation post-COVID. The Federal Reserve Bank of New York disclosed that 90% of the tariffs imposed by Trump are borne by American consumers and businesses, contradicting the White House’s assertion that foreigners shoulder the levies.
As of November, the effective US tariff rate stood at 11.7%, marking a significant increase from the average of 2.7% observed between 2022 and 2024, according to data from the Yale Budget Lab.
