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

NEW YORK/LONDON - Thousands of businesses won a hard-fought victory when the US Supreme Court ruled to overturn the White House’s emergency tariffs, but the process of getting refunds has only just begun.

In a decision that could ripple throughout the global economy for years, the court ruled that US President Donald Trump

was not allowed to use the 1977 International Emergency Economic Powers Act

to levy broad tariffs on imports.

The corporate world has spent months adjusting to Mr Trump’s often-evolving trade policy and his central use of tariffs for his agenda, not just to address trade issues but also as a cudgel against other governments’ policies and actions.

They’re likely to face further challenges, as Mr Trump, in a furious press conference following the ruling,

vowed to use additional powers to impose more tariffs, including a temporary 10 per cent levy

on all imports.

Regardless, many businesses and industry associations reacted with guarded hopes for more predictable trade policy.

Thousands of companies - and not just those that sued the administration - will decide whether to pursue refunds, as it means more than US$175 billion (S$222 billion) in US tariffs collected could be refunded, Penn-Wharton Budget Model economists said on Feb 20.

“If the country needs revenues, then have a debate in Congress,” said Mr Rick Woldenberg, CEO of toymaker Learning Resources, one of the first businesses to file suit against the tariffs last April. “I’m excited. Hopefully this is something everyone feels they won. It’s a win for everyone.”

Uncertainty remains

Stocks of affected companies rallied on the news initially, but retreated from those gains due to the uncertainty surrounding trade policy. Shares of Target and Coach parent Tapestry were up slightly in afternoon trading.

The logistics surrounding refunds is likely to be left to the US Court of International Trade, which means the claims are likely to be administratively complex, said International Chamber of Commerce Secretary General John Denton, adding that the ruling was “worrying silent” on that issue.

More than 1,800 tariff-related suits have been filed with the US Court of International Trade, which has jurisdiction over tariffs and customs matters, since April, compared with less than two dozen such cases in all of 2024.

Mr Trump’s Feb 20 vow to bring additional tariffs was anticipated by numerous lawyers and business associations interviewed prior to his press conference.

Several said the decision - and Mr Trump’s subsequent moves - would introduce more uncertainty in coming months.

“The odds that tariffs reappear in a revised form remain meaningful. Layer on potential tariff refunds, and you introduce a messy operational and legal overhang that amplifies economic uncertainty,” said Mr Olu Sonola, head of US economics at Fitch Ratings.

Numerous sectors affected

Companies across consumer goods, automotive, manufacturing and apparel have been hit particularly hard as they depend on low-cost production in China, Vietnam, India and other sourcing hubs.

Mr Trump’s duties raise the cost of importing finished goods and components, squeezing margins and disrupting finely tuned global supply chains.

Prominent plaintiffs include subsidiaries of Japan’s Toyota Group, US big-box retailer Costco, tire maker Goodyear Tire & Rubber, aluminum company Alcoa, Japanese motorcycle maker Kawasaki Motors and Paris-listed eyewear giant EssilorLuxottica.

The tariffs raised prices on consumers weary from several years of post-COVID inflation, with the Federal Reserve Bank of New York last week estimating that 90 per cent of Mr Trump’s tariffs are borne by American consumers and companies.

The White House has argued with little evidence that the levies are paid by foreigners.

As of November, the effective US tariff rate was 11.7 per cent, compared with an average of 2.7 per cent between 2022 and 2024, according to the Yale Budget Lab.

In addition, the automotive sector will continue to face significant tariffs that were not levied under IEEPA. Import tariffs of 25 per cent on vehicles shipped across the border from either Mexico and Canada, for example, were imposed in 2025 based on national-security grounds.

Still, attorneys say that likely thousands of auto parts shipped into the US from countries subject to Mr Trump’s reciprocal tariffs are being hit with the levies, inflating expenses for both parts suppliers and carmakers.

Several lawyers said many more companies around the globe are likely to join the suits, having waited until the ruling to not draw unwanted attention from the White House.

They’ll join a queue of companies who could be waiting for months to years to recoup the billions of dollars in import duties.

Mr Wade Kawasaki, CEO of The Wheel Group, a California-based automotive wheel manufacturer, said his company has faced roughly 20 per cent added costs under the IEEPA tariffs.

He plans to seek refunds, which will involve his team sorting through thousands of transactions to “figure out how much is owed back to us,” he said.

Some US companies have opted to sell their rights to collect those refunds to outside investors. This involves taking a small payment upfront - around 25 to 30 cents on the dollar - while agreeing to forfeit the rest to investors should the tariffs be overturned, Reuters reported in December.

German logistics firm DHL said that it will use its technology to ensure that its customers get refunds “accurately and efficiently” if they are authorised.

Mr Bruce Smith, owner, chairman and CEO of Voltava, a Michigan-based auto supplier, said he supported Trump’s effort to balance trade with other countries, but hopes now that the president and other elected officials will work toward trade policies that protect national interests and benefit both the US and its trading partners.

“We can be tough and strategic without being unpredictable,” he said. REUTERS