US Supreme Court tariff decision means more uncertainty for businesses
The US Supreme Court’s decision to declare US President, Donald Trump’s tariffs illegal creates further uncertainty for businesses, say leading audit, tax and business advisory firm, Blick Rothenberg.
Julie Park, a partner at the firm, said: “This decision brings further uncertainty for businesses, as not all of the tariff increases came about through the use of the International Emergency Economic Powers Act (IEEPA) and so will remain in place. It is unclear what will happen next in terms of systems changes for Customs and Border Protection (CBP) and export/import businesses.”
She added: “The White House has said it will quickly replace these tariffs by using other legal tools. But the available options will be either more cumbersome or more limited in scope than the powers Donald Trump had asserted that the IEEPA gave him.”
Julie said: “A potential tariff refund process was not addressed in the judgement; this will be left to the lower courts. The scope of refunds could, in theory, be more than $175bn. But in the words of one of the Justices, the refund process ‘is likely to be a mess’. This and the White House seeking to re-instate tariffs leaves businesses in limbo about if they will get refunded.”
She added: “The Supreme Court Decision was about the scope of Donald Trump’s powers rather than tariffs. He used IEEPA to declare a threat to critical US supply chains from overseas sourcing rather than using home grown resources and buying local.”
Julie said: “It would be reasonable to assume that this Supreme Court decision would act as a warning shot about taking measures of this nature without congressional approval, but although the decision challenged the actual scope of the President’s powers, it did not challenge his assertion that imports are critically damaging the US economy.”
She added: “Following the introduction of punitive tariffs on goods from most countries worldwide, businesses had to grapple with volatility in the actual rates applying to their goods, making price negotiations with US trade customers difficult and in turn making US suppliers uncertain of their cost base. Now they have to grapple with the uncertainty of knowing if the tariffs will come back in another new form.”