Supreme Court Strips Trump's Emergency Tariff Authority
Key Highlights
1. The tariff regime is voided, but not all duties disappear. The ruling kills the IEEPA-based tariffs — including the 145% China rates and the 25% Canadian and Mexican levies — but Section 232 steel and aluminum tariffs survive under separate authority, meaning some import costs remain.
2. Refunds are possible but not guaranteed. The Court established no automatic refund mechanism for duties already paid, so chemical companies should start documenting import entries now and engage trade counsel quickly, as follow-on litigation will likely determine whether and how much money can be recovered.
3. Future trade pressure just got much harder to impose. Any renewed tariff push must run through slower statutory routes like Section 301 or Section 232, each requiring formal investigations and procedural timelines — a far less nimble tool than the emergency orders the administration relied on.
The U.S. Supreme Court ruled 6–3 today that President Trump lacked the authority to impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), a decision with immediate consequences for chemical manufacturers, pharma input sourcing and global supply contracts.
Writing for the majority, Chief Justice John Roberts held that IEEPA's authority to "regulate importation" does not extend to tariff imposition, which is a taxing power requiring explicit congressional authorization. The ruling affirms the Federal Circuit's earlier judgment against the IEEPA-based tariffs and voids the emergency-tariff regime rolled out in 2025–26. Justices Thomas, Alito and Kavanaugh dissented.
What Falls
The ruling invalidates the 25% tariffs on most Canadian and Mexican imports, the 10%–20% duties on Chinese goods tied to the drug-trafficking emergency and the "reciprocal" tariffs — a 10% baseline on all imports, with rates on China reaching approximately 145% on many goods. For chemical processors sourcing precursor materials from China, the ruling offers immediate relief on IEEPA-driven cost increases.
In November 2025, Chemical Processing reported that tariffs tied to China-sourced raw materials drove significant price volatility, forcing chemical producers, including Eastman and Regal Rexnord, to delay recovery timelines into 2026.
What Remains and What Comes Next
Section 232 steel and aluminum tariffs remain in force, as they rest on separate statutory authority. If the White House wants to restore broad trade pressure, it must now work through Title 19 mechanisms — Section 232, Section 201 or Section 301 — each of which involves formal investigations, procedural timelines and rate limits. That is a slower and narrower instrument than the emergency orders just struck down.
Refunds and Accounting Impacts
The Court prescribed no refund mechanism for duties already paid. Expect guidance from U.S. Customs and Border Protection and the Treasury Department, along with follow-on litigation. At least one dissenting justice warned refunds could involve billions of dollars. Chemical companies should begin documenting import entries and consulting trade counsel on potential claims.
In anticipation of the Supreme Court ruling, Daniel Mak, senior manager at EisnerAmper, suggested these immediate actions:
- Gather documentation supporting the potential refund process on imports starting in February 2025.
- Verify each item’s tariff classification and country of origin. The country of origin may be different from the export country.
- Consider non-dutiable costs that do not belong in imported value.
- Coordination between customs brokers, tax, trade and legal teams for planning and risk management.
- Review supplier contracts to mitigate against impacts from future tariff changes.
- Consider which refund mechanisms (e.g., post-summary corrections, protests) may be appropriate based on the Court’s ruling and estimated timing for filing relief measures.
Update 12:30 p.m. ET
Statement from Jason Bernstein, director of International Trade and Supply Chain, American Chemistry Council:
“We will review the ruling to determine any impact on our industry as well as our member companies. If any refunds on tariffs paid are authorized by this ruling, we hope that these refunds will be processed expeditiously.
“The U.S. chemical industry is a model for an America First trade policy – American success relies on American chemistry. To make America the most competitive place in the world to manufacture chemicals, new pro-growth measures with trusted trade partners is critical. There are opportunities to use targeted trade measures that decrease America’s supply chain vulnerabilities and advantage domestic production and jobs through resilient sourcing of key materials and access to foreign markets for our exports. For example, the timely renewal and full implementation of the United States-Mexico-Canada Agreement, including its Annex on Chemical Substances. Regardless of the ruling, we look forward to working with President Trump and the Administration to advance the U.S. chemical industry’s position in the global economy.”
Update 12:39 p.m. ET
Alliance for Chemical Distribution (ACD) President and CEO Eric R. Byer released the following statement:
“ACD supports the Court’s ruling today,” said Byer. “ACD members, many of whom are small businesses, have navigated cost burdens and uncertainties that have adversely impacted the ability to import and deliver the chemical products essential to American’s health and safety. ACD is reviewing the Court’s ruling and it is our hope this finally brings clarity in order for our members to continue to contribute to domestic economic growth and safely distribute the essential chemical products used in nearly every industry.”
This is a developing story. Chemical Processing will update coverage.
More Tariff Coverage
Several of Chemical Processing parent company Endeavor B2B's brands are writing about the Supreme Court ruling. For more information, read:
- Supreme Court Strikes Down Most Trump Tariffs: IndustryWeek editors summarize the ruling and get industry reactions.
- Trump's emergency tariffs ruled to be illegal: Plant Service's Tom Wilk summarizes the rulings and details how some manufacturers have been preparing for it.
- Supreme Court strikes down Trump-era tariffs, raising implications for infrastructure costs: Wastewater Digest's Alex Cossin notes that the ruling had been closely watched by infrastructure groups as tariff costs impacted the price tags on big civic projects.
- Supreme Court Hands Trump Tariffs Plan a Setback: T&D World (transmission and distriubtion) editor Jeff Postelwait discusses the ruling's impact on power utilities.
- Tariffs Struck Down by Supreme Court: MH&L (material handling and logistics) editor Adrienne Selko shares the ruling and reactions from several supply chain groups.
- Supreme Court Ruling Limits Presidential Tariff Powers, Impacting Machine Vision Industry: Vision Systems Design editor Sharon Spielman details how tariffs will impact camera-based quality control systems used in many manufacturing operations.
- SCOTUS limits presidential tariff authority, injecting new oil and gas industry uncertainty: At The Oil & Gas Journal, editor Mikaila Adams discusses how because steel tariffs will remain in place, costs will likely not fall for energy exploration companies.
About the Author
Traci Purdum
Editor-in-Chief
Traci Purdum, an award-winning business journalist with extensive experience covering manufacturing and management issues, is a graduate of the Kent State University School of Journalism and Mass Communication, Kent, Ohio, and an alumnus of the Wharton Seminar for Business Journalists, Wharton School of Business, University of Pennsylvania, Philadelphia.