Business celebrates win over Trump tariffs, but refunds will take time

• Over 1,800 tariff-related lawsuits filed since April 2024 involve major companies like Toyota, Costco, Goodyear, and Alcoa, with more expected to join now that the ruling provides legal cover
• Companies selling refund rights to investors receive only 25-30 cents on the dollar upfront, while the refund process requires gathering detailed import data across different tariff regimes and time periods
• Trump's tariffs raised the effective U.S. tariff rate to 11.7% (from 2.7% average in 2022-2024), with 90% of costs borne by American consumers according to the Federal Reserve Bank of New York

Business Celebrates Win Over Trump Tariffs, but Refunds Will Take Time

Summary

The U.S. Supreme Court overturned President Trump's emergency tariffs, ruling he could not use the 1977 International Emergency Economic Powers Act to impose broad import levies. This landmark decision could result in $175 billion in tariff refunds, according to Penn-Wharton Budget Model economists.

Key Developments:

• Over 1,800 tariff-related lawsuits have been filed with the U.S. Court of International Trade since April, compared to fewer than two dozen in all of 2024
• The effective U.S. tariff rate reached 11.7% as of November, up from an average of 2.7% between 2022-2024
• The Federal Reserve Bank of New York reports 90% of tariff costs are borne by American consumers, contradicting White House claims foreigners pay

Companies Affected:

Major plaintiffs include Toyota Group subsidiaries, Costco, Goodyear Tire & Rubber, Alcoa, Kawasaki Motors, and EssilorLuxottica. Luxury brands LVMH, Hermes, and Moncler rallied on the news. Consumer goods, automotive, manufacturing, and apparel sectors were hardest hit, particularly those relying on Chinese, Vietnamese, and Indian production.

Market Implications:

The refund process will be lengthy, taking months to years. Companies must compile detailed import data across different tariff regimes and time periods. Some businesses are selling refund rights to investors for 25-30 cents on the dollar rather than waiting.

Attorneys expect thousands more companies to file suits. However, tariffs won't disappear entirely—the Trump administration plans to continue using other legal authorities, including 25% tariffs on vehicles from Mexico and Canada based on national security grounds. Price reductions for consumers remain unlikely despite potential refunds.