American businesses are watching with bated breath as a high-stakes legal showdown over billions in tariffs unfolds, threatening to reshape the rules of presidential power and international trade. At the heart of the dispute is whether President Donald Trump exceeded his legal authority by imposing sweeping tariffs on dozens of U.S. trade partners, using emergency powers that courts now say he never had. If the latest court ruling stands, the U.S. government could owe tens of billions of dollars in refunds to companies that have paid tariffs since Trump’s second term began—potentially upending Treasury finances and business plans across the country.
According to data from U.S. Customs and Border Protection reported by CBS MoneyWatch, more than $200 billion in tariff revenue has been collected from American businesses between October 2024 and August 24, 2025. Of that massive sum, over $70 billion stems from country-based tariffs that, as a federal appeals court ruled on September 1, 2025, President Trump lacked the authority to impose. These tariffs, some as high as 145%, targeted Chinese, Mexican, Canadian, and other foreign goods, and were justified by Trump under the International Emergency Economic Powers Act (IEEPA)—a statute designed to let presidents act swiftly in the face of “unusual or extraordinary” threats from abroad.
The legal drama began early in Trump’s second term, when he declared a national emergency over opioid trafficking, citing the alleged inability of countries like Mexico, Canada, and China to stem the flow. Later, on what he dubbed “Liberation Day” in April 2025, Trump again invoked emergency powers, this time citing “lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers.” He imposed country-specific duties with rates reaching up to 50% on a wide array of products. Trump’s administration argued that, while the IEEPA doesn’t mention tariffs by name, its broad language about regulating or prohibiting imports gave him the necessary authority.
But not everyone agreed. In May 2025, a unanimous three-judge panel of the Court of International Trade struck down the tariffs, concluding that the IEEPA “requires more than just the fact of a presidential finding or declaration” and doesn’t grant authority for tariffs simply because the president says an emergency exists. The appeals process continued, and just before Labor Day, the Court of Appeals for the Federal Circuit reviewed the case—V.O.S. Selections v. Trump—and delivered a stinging rebuke to the administration. The seven-judge majority ruled that the IEEPA does not authorize the president to impose tariffs, avoiding judgment on Trump’s actual emergency declarations but making clear that the statute’s powers are not as sweeping as the White House claimed.
However, the decision was not unanimous. Four dissenting judges, including both Bush and Obama appointees, accepted Trump’s emergency claims at face value. They cited earlier Supreme Court decisions that limit how much judges can second-guess presidential declarations of emergency, essentially arguing that if the president says there’s an emergency, that’s enough. These dissenters pointed to Trump’s assertion that “large and persistent annual U.S. goods trade deficits have led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries.” In their view, the president’s control over the national economy via emergency declaration could be nearly absolute, so long as the emergency’s source is “substantially outside the United States.”
Now, with Trump having appealed the ruling, the Supreme Court is poised to decide the fate of these tariffs—and, more broadly, the scope of presidential emergency powers. As The Atlantic notes, this could be the most significant test yet of the constitutional system of checks and balances. If the justices uphold the lower courts’ decisions, it would mark the first substantive intervention to restrain Trump’s use of emergency authority. If they defer to Trump, it could signal a dramatic shift, giving presidents near-plenary powers to declare economic emergencies and act unilaterally.
For businesses, the uncertainty is excruciating. Since April 2, 2025, companies have struggled to price their goods, not knowing whether tariffs will stand or be struck down—or if they’ll ever see refunds for the billions already paid. “From the supply chain perspective, we are seeing a lot of uncertainty, which has been the case since April 2,” said Scott Pruneau, CEO of ITS Logistics, in an interview with CBS MoneyWatch. “No one knows how to price their goods, because you can’t whipsaw your customers on pricing.”
If the courts’ decisions are upheld, the U.S. government could be on the hook for returning a staggering sum. But how would refunds work? Ted Murphy, co-leader of Sidley Austin’s global arbitration, trade and advocacy practice, explained to CBS MoneyWatch that there are a few possibilities. The government could issue automatic refunds to all affected businesses (though he doubts this is likely), or it might limit refunds to plaintiffs who filed suit, requiring others to take legal action. The most probable scenario, according to Murphy, is that companies would have to submit requests for reimbursement—a process that could overwhelm both businesses and the government.
There’s precedent for such refunds. In 1998, after the Supreme Court struck down a harbor maintenance tax imposed by the Reagan administration, the government was forced to refund over a billion dollars to companies, but only to those who applied. Dan Anthony, president of Trade Partnership Worldwide, echoed that the process could quickly become complicated and labor-intensive. “Theoretically, the government could quite quickly figure out who paid what, and refund it to the payer,” he said. “But the government could also make it very difficult and force people to make requests. That’s infinitely more work for the government, but it’s pretty clear the government does not want to give money back, so if you make it a difficult process, then a number of importers are probably not going to pursue it.”
Large-scale refunds could also have ripple effects in the broader economy. According to TD Securities analysts, such payouts could force the Treasury to increase bill supply, potentially pressuring funding spreads and adding new stresses to government finances. Meanwhile, the Trump administration could seek alternative emergency powers to keep tariff rates high, even if the IEEPA tariffs are struck down.
As the Supreme Court prepares to weigh in, the stakes couldn’t be higher. The decision will not only determine the fate of billions in tariff revenue and the financial health of thousands of American businesses, but could also redraw the boundaries of presidential power for years to come. The coming months promise to be pivotal—for business leaders, lawmakers, and anyone concerned about the balance of power in Washington.
