The United States Supreme Court is at the center of a high-stakes legal battle that could redefine the scope of presidential power over economic policy and reshape the future of American trade. On November 5, 2025, the nine justices heard arguments concerning the legality of former President Donald Trump’s sweeping global tariffs, imposed under the 1977 International Emergency Economic Powers Act (IEEPA). The outcome of this case, expected within months, has the potential to unleash one of the largest government refund waves in U.S. history and to test the Supreme Court’s own consistency in applying the so-called "major questions doctrine."
Trump’s tariffs, which he began imposing soon after returning to the White House, targeted goods from nearly every country. He declared two national emergencies: one related to the trafficking of fentanyl and other drugs into the U.S., and another concerning persistent trade deficits. Citing these emergencies, he levied tariffs ranging from 10 percent on most goods to 50 percent on certain Indian exports and more than 100 percent on some products from China, according to reporting from The Economic Times and CNBC.
Yet, the legal foundation for these tariffs is hotly contested. A coalition of small businesses and a dozen U.S. states challenged the tariffs, arguing that the IEEPA does not explicitly authorize the imposition of "tariffs," "duties," or "taxes." They claim that Trump overreached by using a law intended for specific emergencies to unilaterally overhaul U.S. trade policy—a power the Constitution reserves for Congress. Three lower courts agreed, ruling Trump’s use of IEEPA for tariffs was illegal, prompting the administration’s appeal to the Supreme Court.
At the heart of the Supreme Court’s deliberations is the "major questions doctrine," a legal principle that requires clear congressional authorization for executive actions with vast economic or political significance. The doctrine, formally named and applied in the 2022 West Virginia v. EPA decision, has been wielded by the current conservative majority—tilted 6-3 in favor of the Republicans—to strike down major Biden administration policies, including a COVID-19 vaccine mandate and a $430 billion student loan forgiveness program.
During the nearly three-hour hearing on November 5, skepticism was palpable among the justices, both conservative and liberal. Chief Justice John Roberts, a key conservative, told Solicitor General Dean John Sauer that tariffs are "the imposition of taxes on Americans, and that has always been the core power of Congress." Roberts dismissed the administration’s attempt to frame tariffs as "import regulations" under IEEPA, calling the justification "a misfit" for the sweeping authority claimed. He also pointed out that the word "tariff" does not even appear in the statute, as reported by CNBC and The Economic Times.
Justice Neil Gorsuch, appointed by Trump, expressed concern that upholding the tariffs would create "a one-way ratchet toward the gradual but continual accretion of power in the executive branch." He questioned, "What would prohibit Congress from just abdicating all responsibility to regulate foreign commerce—or for that matter, declare war—to the president?" Justice Amy Coney Barrett, another Trump appointee, pressed the government’s lawyer to identify any other instance in history where "regulate importation" had been interpreted as granting tariff-imposing authority. Justice Ketanji Brown Jackson, representing the court’s liberal bloc, emphasized that IEEPA was designed to constrain, not expand, presidential emergency powers.
The economic stakes are staggering. If the Supreme Court rules the tariffs illegal, the U.S. government could be on the hook to refund up to $1 trillion (approximately £760 billion) in tariffs to American importers, according to Treasury Secretary Scott Bessent’s testimony to the Court. Bessent warned that the longer the decision is delayed, the greater the refund amount becomes, with tens of billions already collected in 2025 alone. If refunds are ordered retroactively, this would constitute one of the largest revenue reversals in American history.
However, the practicalities of refunding such a massive sum are anything but straightforward. Only companies directly involved in the lawsuit would automatically receive refunds, while others would need to navigate a complicated legal process to claim their share. Justice Barrett described the prospect as "a mess," citing the unprecedented administrative burden of untangling customs records and multiple tariff changes. Trade lawyers like Joyce Adetutu from Vinson & Elkins echoed this concern, noting, "Untangling these records is going to take quite a bit of time and will be an administrative burden," as reported by IBT and CNBC.
Many U.S. companies are not waiting for the Court’s decision to protect their interests. Firms large and small are filing protective protests with U.S. Customs, reviewing old paperwork, and calculating potential refunds. Big manufacturers have paid hundreds of millions of dollars in tariffs since Trump’s IEEPA tariffs began, and small businesses say the extra costs have been devastating. More than 700 small businesses joined the We Pay The Tariffs coalition, signing an amicus brief opposing the tariffs and describing the unpredictability and cost increases as "paralyzing." Dan Anthony from the coalition told CNBC that more than 40 tariff code changes in 2025 alone have created chaos for importers.
Despite the warnings about administrative chaos, some importers and customs brokers argue that refunds could be managed efficiently. Rick Muskat, an importer, told CNBC, "I beg to differ with the concern over the repaying of tariffs as being a mess." He demonstrated how customs entry forms clearly itemize each tariff line, suggesting that applying for refunds should be as simple as claiming a tax refund from the IRS. Greenbar Distillery, which paid more than $50,000 in tariffs—10% of its profits—said that, "logistically, technically and theoretically," refunds should be easy because they are clearly marked. However, co-founder Melkon Khosrovian remains skeptical that importers will actually see refunds, stating, "I have very strong reservations that we’re not going to see a penny."
Customs brokers, meanwhile, brace for a potential paperwork explosion. Lori Mullins from Rogers & Brown Customs Brokers noted that a similar refund process occurred in 2018 for GSP duties and was relatively simple, but warned that the stakes and complexity are much higher now. The government’s argument that tariff money is essential to U.S. finances could further complicate matters, and customs brokers are already struggling with staff shortages and constant regulatory changes.
President Trump, for his part, has maintained that the tariffs are necessary for national security and to counter unfair trade practices. He has warned that reversing the tariffs "would literally destroy the United States of America." Critics, however, argue that Trump misused emergency powers and bypassed Congress, which holds the constitutional authority to levy taxes.
As the Supreme Court weighs its decision, the case has become a litmus test for the limits of presidential authority and the consistency of the Court’s application of the major questions doctrine. If the justices strike down the tariffs, it could trigger a constitutional confrontation and force the government into the largest refund rush in history. If they uphold Trump’s actions, the Court may face accusations of selective reasoning and political bias.
With the ruling expected soon, the fate of trillions of dollars, the future of American trade policy, and the boundaries of executive power all hang in the balance. The outcome will reverberate far beyond Washington, shaping both the U.S. economy and the global trade landscape for years to come.
