Murky Outlook for US Businesses After Tariff Ruling Prompts Countermoves by Trump
New York. Businesses are facing a renewed wave of uncertainty after the Supreme Court struck down tariffs imposed by President Donald Trump under an emergency powers law, and Trump vowed to work around the ruling to keep his tariffs in place.
The Trump administration argues that the tariffs boost American manufacturing and reduce the trade deficit. But many US businesses have raised prices and made other adjustments to offset higher costs triggered by the levies.
It remains unclear how much relief businesses and consumers will actually see from Friday’s ruling. Within hours of the decision, Trump pledged to use a different law to impose a 10% tariff on all imports for 150 days and said he would explore other ways to levy additional tariffs on countries he accuses of unfair trade practices.
“Any boost to the economy from lowering tariffs in the near term is likely to be partly offset by a prolonged period of uncertainty,” said Michael Pearce, an economist at Oxford Economics. “With the administration likely to rebuild tariffs through other, more durable means, the overall tariff rate may yet end up settling close to current levels.”
Efforts to claw back an estimated $133 billion to $175 billion in tariffs already collected and now deemed illegal are expected to be complicated and will likely favor larger companies with more resources. Consumers hoping for refunds are unlikely to be compensated.
The Fight Against Tariffs Continues
With Trump maintaining a hard line on tariffs, many businesses are bracing for years of court battles.
Basic Fun, a Florida-based toy maker behind brands such as Lincoln Logs and Tonka trucks, last week joined a growing list of companies suing to recover tariffs paid to the government.
While CEO Jay Foreman is concerned about any new tariffs Trump may impose, he does not expect them to affect toys. Still, he worries about prolonged uncertainty.
“I do worry about some type of perpetual fight over this, at least for the next three years,” Foreman said.
The newly announced 10% tariff immediately raised questions for Daniel Posner, owner of Grapes The Wine Co. in White Plains, New York. Because wine shipments take about two weeks to cross the Atlantic, he is unsure whether a shipment arriving Monday will be affected.
“We’re reactive to what’s become a very unstable situation,” Posner said.
Ron Kurnik, owner of Superior Coffee Roasting Co. in Sault Ste. Marie, Michigan, has also felt the strain. In addition to US tariffs, his business faced retaliatory Canadian tariffs for much of last year while exporting coffee.
“It’s like a nightmare we just want to wake up from,” said Kurnik, whose company has raised prices twice by 6% since the tariffs took effect. While he welcomed the Supreme Court ruling, he does not expect to see a refund.
Industries Pine for Stability
A wide range of industries — including retail, technology and agriculture — used the ruling as an opportunity to remind Trump how his trade policies have affected their businesses.
The Business Roundtable, which represents more than 200 major US companies, urged the administration to limit future tariffs to specific unfair trade practices and national security concerns.
Retailers have adopted various strategies to blunt the impact of tariffs, from absorbing costs to cutting expenses and diversifying supply chains. Even so, many have passed on price increases at a time when consumers are especially sensitive to inflation.
Dave French, executive vice president of government relations at the National Retail Federation, said he hoped lower courts would ensure “a seamless process” for refunding tariffs — an issue not addressed in Friday’s ruling.
For technology companies, the tariffs have created major disruptions, as many products are manufactured overseas or rely on imported components. The Computer & Communications Industry Association, which represents companies employing more than 1.6 million people, expressed hope the decision would ease trade tensions.
“With this decision behind us, we look forward to bringing more stability to trade policy,” said Jonathan McHale, the association’s vice president for digital trade.
Farmers, who have faced higher equipment and fertilizer costs and weaker export demand, also spoke out.
“We strongly encourage the president to avoid using any other available authorities to impose tariffs on agricultural inputs that would further increase costs,” said American Farm Bureau Federation President Zippy Duvall.
Industries Seeing No Relief
The Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not grant the president authority to tax imports — a power reserved for Congress. However, the decision applies only to tariffs imposed under that law, leaving others intact.
Tariffs on steel, upholstered furniture, kitchen cabinets, and bathroom vanities remain in effect, according to the Home Furnishings Association, which represents 15,000 furniture stores across North America.
At Revolution Brewing in Chicago, aluminum used for cans now costs as much as the ingredients inside them due to metal tariffs unaffected by the ruling. Although the cans are made locally, the aluminum is imported from Canada, said managing partner Josh Deth.
Tariffs are just one of several challenges for the brewery, which is also dealing with volatile barley prices and slowing demand for craft beer.
“Everything kind of adds up,” Deth said. “The beverage industry needs relief. We’re getting crushed by aluminum prices.”
Reaction Overseas
Italian winemakers hit hard by the tariffs greeted the ruling with skepticism, warning it could deepen uncertainty in transatlantic trade.
The US is Italy’s largest wine market, with sales tripling in value over the past 20 years. Earlier threats of tariffs as high as 200% on European Union goods sent shockwaves through the industry, even after the measures were reduced, delayed or renegotiated.
“There is a strong risk that tariffs will be reimposed through alternative legal channels, compounded by the uncertainty this ruling may generate in commercial relations between Europe and the United States,” said Lamberto Frescobaldi, president of UIV, which represents more than 800 winemakers.
Elsewhere in Europe, reaction centered on renewed confusion over costs for exporters shipping to the US.
Trump’s tariffs could still hit pharmaceuticals, chemicals and auto parts, said Carsten Brzeski, an economist at ING Bank.
“Europe should not be mistaken — this ruling will not bring relief,” he said. “The legal authority may be different, but the economic impact could be identical or worse.”
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