What the Supreme Court ruling on tariffs means for businesses

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What is the Supreme Court ruling on tariffs?

Over the past year, the executive branch has implemented a broad tariff policy, raising questions about how far its authority extends when shaping trade policy. On February 20, 2026, the Supreme Court issued a decision limiting the executive branch's ability to impose broad, open-ended tariffs under the International Emergency Economic Powers Act, or IEEPA—the primary authority used to justify most of the tariff increases imposed in 2025. At issue was whether emergency powers could be used to support sweeping tariff actions without direct congressional approval.

The Supreme Court's ruling narrows how some tariffs can be applied, but it doesn't eliminate them. Businesses and consumers should expect tariffs to remain a key part of US trade policy—although applied in more targeted and potentially less predictable ways moving forward.

As of April 20, businesses can also begin applying for refunds on certain tariffs deemed unlawful through an online claims portal.

Who is impacted

Tariff collections totaled an estimated $195 billion in 2025—over 250% more than 2024 levels. Because importers are responsible for paying tariffs, most of these costs have been absorbed by US businesses, not foreign exporters. For many companies—particularly those that rely on imported goods, raw materials or global supply chains—this has translated into higher input costs, margin pressure and more complex pricing decisions.

Because many businesses have passed costs to consumers through higher prices, tariffs have functioned much like an indirect tax on consumers. The Tax Foundation estimates that tariffs could cost approximately $1,300 per household in 2026.

Who is eligible for tariff refunds?

On April 20, the government began accepting applications for refunds on certain tariffs paid under the IEEPA. According to US Customs and Border Protection, or CBP, roughly $90 billion of tariff taxes could be eligible for a refund.

To support this, CBP has launched an online claims process through its Consolidated Administration and Processing of Entries, or CAPE, portal, which provides a centralized way for businesses to submit refund requests tied to court rulings. The CBP has also created a reference guide for CAPE declarations.

Companies must actively file claims and may need to demonstrate eligibility based on how tariffs were assessed, whether goods were entered under IEEPA authority and whether related legal challenges apply. In many cases, businesses are also pursuing claims through the Court of International Trade, which could influence both timing and outcomes.

Importantly, only the importer of record—the entity officially responsible for bringing goods into the country and paying the tariff—is eligible to receive a refund. This means that while consumers may have indirectly paid higher prices due to tariffs, they may not be eligible to submit claims for reimbursement.

In cases where a logistics provider acted as the importer of record on behalf of a customer, the process may differ. DHL recently announced that it will file refund claims directly for eligible shipments where it served as importer of record. Once funds are issued by CBP, it will pass those refunds back to the party that originally paid the duties. Both UPS and FedEx have announced similar plans.

How will the ruling affect future tariffs?

With the Supreme Court's ruling, the White House can't use the IEEPA to impose widespread, open-ended tariffs with trading partners. However, the administration may still raise tariffs under other trade and tariff acts, including:

• Sections of the Trade Expansion Act of 1962
• The Trade Act of 1974
• The Tariff Act of 1930

For example, Section 232 of the Trade Expansion Act authorizes tariffs on imports that are considered threats to national security, and Section 301 of the Trade Act permits tariffs when foreign trade practices are found to be a burden or restriction on US commerce.

New legislation could also significantly expand tariff powers. The Sanctioning Russia Act, a popular Senate bill, is intended to impose severe penalties on Russia for invading Ukraine. It includes provisions that may allow the White House to levy tariffs of up to 500% on any country importing Russian crude or refined products. Approximately 40 countries currently import oil from Russia, including China, Germany and Japan.

Trade negotiations may shape outcomes

Regardless of the Supreme Court's ruling, the president can continue to implement his trade agenda through renegotiated deals with other countries—many of which are willing to bargain. These commitments still stand after the court's decision, and the accompanying terms—including purchase commitments, regulatory oversight and investment pledges—will also continue.

What action is required and when

With a variety of mechanisms still available to adjust tariff rates, higher tariffs are likely to remain the new normal, leading to continued uncertainty for business owners. Tariffs may be implemented unevenly, change frequently and vary by country or industry, making long-term business planning more complex. Business owners are also subject to counter tariffs imposed by other nations.

Small business owners should build these increased costs into their business plans and consider large purchases, new hires and other investment decisions carefully. It'll also be important to review past import activity and understand where tariff-related costs are affecting margins. Businesses that rely on imports may want to adjust sourcing or inventory strategies to reduce risk.

Those with significant tariff exposure in 2025 should move quickly to assess their eligibility for refunds and prepare to act. This may include reviewing import records, identifying which payments were made under IEEPA authority and coordinating with customs brokers, legal counsel or trade advisors to determine the most effective path forward. In some cases, businesses may also need to evaluate whether additional legal action is warranted to support a claim.

For consumers, the risk of sharp, tariff-driven price hikes may be lower following the ruling. However, it's unlikely that prices will meaningfully decline. Uncertainty surrounding trade policy is likely to persist and may continue to influence inflation, market conditions and overall economic stability. Individuals may want to review their personal spending plans, comparison shop for lower costs where possible and delay large purchases to preserve liquidity and protect their financial position in case the economy continues to soften.

Who to talk to now

As tariff policy continues to evolve, business owners may need to adjust their operations and personal financial plans—from pricing and sourcing decisions to liquidity, investments and long-term growth strategy.

A First Citizens Wealth consultant can work with our banking team to help business owners evaluate how shifting trade policies may affect performance, cash flow and overall financial position, as well as identify opportunities to strengthen resilience in a changing environment.