Last week, the Supreme Court issued a landmark ruling that invalidated a large portion of tariffs imposed under the International Emergency Economic Powers Act (IEEPA), concluding that the statute does not authorize the president to levy tariffs. The decision effectively struck down the legal foundation for many of the reciprocal and trafficking-related duties that have shaped U.S. trade strategy since 2025.
The ruling did not address whether importers are entitled to refunds for tariffs already paid, leaving that issue to lower courts. This creates significant uncertainty for manufacturers and importers, and companies in this space should act now to preserve potential tariff refund claims.
While refunds are not guaranteed, manufacturers and importers should ensure that import documentation is complete, tariff payments are clearly tracked by entry and legal authority, and internal systems are prepared to support future claims or protests if courts ultimately allow refunds.
A closer look
Within hours of last week’s ruling, the administration moved to preserve its trade agenda by invoking alternative legal authorities. Most notably, the president announced a temporary, across-the-board tariff under section 122 of the Trade Act of 1974. Section 122 allows tariffs of up to 15% to be imposed for a maximum of 150 days without congressional approval. Still, as RSM chief economist Joe Brusuelas wrote Monday, the use of section 122 will be challenged in both Congress and the courts by the American commercial community.
Previously imposed duties under sections 232 and 301 also remain in effect, and the administration has signaled an accelerated timeline for launching new section 301 and section 232 investigations that could result in additional, longer‑lasting tariffs. The most pressing impact is a massive reshuffling of trade costs, rather than a total rollback. While the Global Trade Alert estimates the effective U.S. tariff rate would drop from 15.3% to 8.3% if IEEPA tariffs are fully removed, the new 15% section 122 tariff—combined with existing section 301 and 232 duties—means manufacturers may see little actual cost relief in the short term as the average tariff rate under the 15% section 122 regime is estimated to be 13.2%.
However, looking under the hood, the shift from the IEEPA tariff regime to the 15% section 122 regime produces clear winners and losers. For example, Brazil, China, and India are expected to benefit the most since a flat 15% tariff would replace higher IEEPA country-specific rates. Conversely, the United Kingdom, Italy, and Singapore will likely see higher average tariff rates under a 15% section 122 regime.
Next steps
Manufacturers and importers should prepare for a potential surge in import activity over the next 150 days. The temporary nature of section 122 creates a strong incentive to accelerate imports before tariffs potentially rise again under sections 301, 232, or other authorities. Supply chain leaders should evaluate near‑term sourcing, inventory, and logistics strategies to take advantage of this window while planning for renewed trade volatility later in the year.
