NEW YORK (AP) — Businesses face a new wave of uncertainty afterthe Supreme Court struck down tariffsimposed by President Donald Trump under an emergency powers law and Trump vowed to work around the ruling to keep his tariffs in place.
APTOPIX Supreme Court Tariffs Trump
The Trump administration says its tariffs help boost American manufacturers and reduce the trade gap. But many U.S. businesses have had toraise pricesand adjust in other ways to offsethigher costs spurred by the tariffs.
It remains to be seen how much relief businesses and consumers will actually get from Friday's ruling. Within hours of the court's decision, Trump pledged to use a different law to impose a 10% tariff on all imports that would last 150 days, and to explore other ways to impose additional tariffs on countries he says engage in 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 tariffs rate may yet end up settling close to current levels."
Efforts to claw back the estimated $133 billion to $175 billion of previously collected tariffs now deemed illegal are bound to be complicated, and will likely favor larger companies with more resources.Consumers hoping for a refundare unlikely to be compensated.
The fight against tariffs continues
With Trump's unyielding position on tariffs, many business are braced for years of court battles.
Basic Fun, a Florida-based maker of toys such as Lincoln Logs and Tonka trucks, last week joined a slew of other businesses in a lawsuit seeking to claw back tariffs paid to the government.
While company CEO Jay Foreman is concerned about any new tariffs Trump may impose, he doesn't think they will affect toys. Still, he said, "I do worry about some type of perpetual fight over this, at least for the next three years."
The new 10% tariff Trump announced Friday immediately raised questions for Daniel Posner, the owner of Grapes The Wine Co., in White Plains, New York. Since wine shipments take about two weeks to cross the Atlantic, he wonders if a shipment arriving Monday will be affected.
"We're reactive to what's become a very unstable situation," Posner said.
Ron Kurnik owns Superior Coffee Roasting Co. in Sault Ste. Marie, Michigan, across the border from Canada. In addition to U.S. tariffs, Kurnik faced retaliatory tariffs from Canada for much of last year when he exported his coffee.
"It's like a nightmare we just want to wake up from," said Kurnik, whose company has raised prices by 6% twice since the tariffs went into effect. While he's pleased with the Supreme Court's ruling, he doesn't think he will ever see a refund.
Industries pine for more stability
A wide array of industries, including retail, tech and the agricultural sector, used the Supreme Court ruling as an opportunity to remind Trump of how his trade policies have affected their businesses.
The Business Roundtable, a group that lobbies on behalf of more than 200 U.S. companies, released a statement encouraging the administration to limit the focus of tariffs going forward to specific unfair trade practices and national security concerns.
In the retail industry, stores of all stripes have embraced different ways to offset the effects of tariffs — from absorbing some of the costs themselves, to cutting expenses and diversifying their supply network. Still, they have had to pass on some price increases at a time when shoppers have been particularly sensitive to inflationary pressures.
Dave French, executive vice president of government relations for The National Retail Federation, the nation's largest retail industry trade group, said he hoped lower courts would ensure "a seamless process" to refund tariffs. That issue wasn't addressed in Friday's ruling.
Advertisement
For the technology sector, Trump's tariffs caused major headaches. Many of its products are either built overseas or depend on imports of key components. The Computer & Communications Industry Association, which represents a spectrum of technology companies employing more than 1.6 million people, expressed hope that the decision will ease the 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 been stung by higher prices for equipment and fertilizer since the tariffs went into effect, and reduced demand for their exports, 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 that aren't feeling any relief
The Supreme Court ruled 6-3 that the International Emergency Economic Powers Act did not give the president authority to tax imports, a power that belongs to Congress. But the decision only affects tariffs imposed under that law, so some industries will see no relief at all.
The decision leaves in effect tariffs on steel, upholstered furniture, kitchen cabinets and bathroom vanities, according to the Home Furnishings Association, which represents 15,000 furniture stores in North America.
At Revolution Brewing in Chicago, the aluminum they use for cans costs as much as the ingredients that go inside them because of tariffs Trump has placed on metals that are not affected by the Supreme Court ruling. While the cans are made in Chicago, the aluminum comes from Canada, said Josh Deth, managing partner at the brewery.
Tariffs have been just one challenge for his business, which is also affected by volatile barley prices and a slowdown in demand for craft beer.
"Everything kind of adds up," he said. "The beverage industry needs relief here. We're getting crushed by the prices of aluminum."
Reaction overseas
Italian winemakers hard-hit by the tariffs greeted the Supreme Court decision with skepticism, warning that the decision may just deepen uncertainty around trade with the U.S.
The U.S. is Italy's largest wine market, with sales having tripled in value over the past 20 years. New tariffs on the EU, which the Trump administration initially threatened would be 200%, had sent fear throughout the industry, which remained even after the U.S. reduced, delayed and negotiated down.
"There is a more than likely 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, a trade association that represents more than 800 winemakers.
Elsewhere in Europe, initial reaction focused on renewed upheaval and confusion regarding costs facing businesses exporting to the US.
Trump's tariffs could 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."
Anne D'Innocenzio in New York; Dee-Ann Durbin in Detroit; Michael Liedtke in San Francisco; David McHugh in Frankfurt, Germany; Jonathan Matisse in Nashville, Tennessee; Adrian Sainz in Memphis, Tennessee; and Nicole Winfield in Rome contributed to this report.
