Washington Keeps Losing Tariff Cases and Keeps Getting Its Way

Seven months ago, the Supreme Court handed the White House one of the more lopsided defeats of the administration's trade agenda, ruling 6-3 that the century-old emergency powers law it had invoked to impose tariffs on nearly every trading partner on earth did not authorize tariffs at all. Importers were told they were owed roughly $166 billion in refunds, plus interest. Congress and outside groups celebrated a rare judicial check on unilateral executive trade power.

What has happened since is a case study in how little a single court ruling can actually constrain a determined executive branch. On September 9, two members of Congress sent a letter to the Commissioner of U.S. Customs and Border Protection warning that the refund system built to return that money is failing the small businesses it was supposed to help first. Meanwhile, the tariffs themselves never really went away. They were re-imposed within months under a different statute, at similar rates, on similar goods, from many of the same countries — and this version has no built-in expiration date.

A Ruling, a Pivot, Another Ruling, Another Pivot

The chronology matters because it shows a pattern rather than an isolated defeat. After the Supreme Court's February ruling in Learning Resources v. Trump, the administration did not withdraw from tariff policy; it pivoted within days to Section 122 of the Trade Act, a rarely used provision allowing a temporary 15% surcharge to address balance-of-payments emergencies, and imposed a 10% global surcharge under it. The Court of International Trade struck that down too, ruling in May that the statutory precondition — an actual balance-of-payments deficit crisis — had not been shown. Those tariffs expired in July.

By then the administration had already lined up a third vehicle: Section 301 of the same 1974 trade law, ordinarily used for narrow, investigation-driven disputes with individual countries. In July, the U.S. Trade Representative's office announced that 60 economies had failed to adequately police forced labor in their supply chains and imposed duties of 10% to 12.5% on nearly all of their exports to the United States, effective July 24. Unlike IEEPA or Section 122, Section 301 tariffs carry no statutory sunset clause once finalized, which is precisely why trade lawyers describe this iteration as more durable, not less.

The Refund That Keeps Not Arriving

For the roughly 330,000 importers owed money from the invalidated tariffs, the practical experience has been closer to stalling than restitution. Customs and Border Protection's new refund portal, called CAPE, has issued a portion of the money owed, but businesses have reported account-approval delays that threaten to run out the agency's own 90-day filing clock — a problem serious enough that Representatives Haley Stevens and Steven Horsford told the CBP commissioner directly that companies risk forfeiting refunds they are legally owed simply because the agency has not processed their accounts in time. Representative Raja Krishnamoorthi had raised a related warning months earlier, arguing the process as designed would deliver the greatest benefit to large, well-resourced corporations while smaller importers, who often lack in-house trade compliance staff, fell behind on the paperwork.

The Justice Department has compounded the uncertainty by appealing the trade court's refund order itself, arguing the remedy improperly functions as a universal injunction and that only companies which filed their own lawsuits should be guaranteed money back. That position, now before the Federal Circuit, means a small importer who never sued could plausibly wait indefinitely for a refund the Supreme Court's ruling already entitles it to.

Who Absorbs the Cost of a Legal Argument

The businesses caught between these two tracks are rarely the multinational importers with government-affairs offices in Washington. They are the small and mid-size companies — apparel makers, spice importers, specialty tool distributors — that operate on thin margins and cannot easily absorb a tariff bill twice: once when it was collected illegally, and again when a nearly identical duty reappears under new legal cover. A coalition of 25 states, led by Oregon, sued in August arguing the forced-labor rationale for the new tariffs was pretextual, applied almost uniformly across dozens of countries with no serious differentiation in labor conditions between them — the opposite, they say, of what a genuine forced-labor remedy would look like.

"After losing at the Supreme Court, the federal administration is again trying to raise taxes on families and businesses with another round of illegal tariffs," New York Attorney General Letitia James said when the lawsuit was filed.

The administration's defenders make a coherent, if debatable, counterargument: forced-labor enforcement is a legitimate trade-policy goal that Congress explicitly delegated to the executive under Section 301, and the fact that this authority produces similar economic effects to the tariffs the Supreme Court invalidated does not make it the same legal claim. There is something to that distinction — Section 301 does require an underlying investigation and findings, however broad, that IEEPA never did. But the near-uniform 10-12.5% rate applied across 60 economies of wildly different circumstances is difficult to square with a remedy calibrated to actual labor practices, and it is the argument the states' lawsuit and several private plaintiffs are now testing in court.

What Congress Could Do, and Has Not

The remedy for a pattern of executive statute-shopping is not more litigation over which 1970s trade statute best fits a preferred tariff rate; it is Congress reclaiming the tariff authority the Constitution assigns it in the first place. A bipartisan bill, the Trade Review Act, would require the president to notify Congress within 48 hours of any new tariff and let it expire after 60 days absent explicit approval — modeled deliberately on the War Powers Resolution. It has drawn co-sponsors from both parties, including Senators Grassley and Murkowski, and its backers say support keeps growing. It has not received a floor vote in either chamber.

Until it does, the pattern documented since February will likely repeat: a court rules against a tariff program, the executive branch reroutes the same policy through a different statute within weeks, and the people actually owed money from the losing round wait behind a bureaucratic queue that outlasts the news cycle. The Supreme Court settled a narrow legal question in February. It did not settle who pays, or when, or whether the same tariffs simply return under a new name — those questions remain squarely Congress's to answer, and so far it has chosen not to.