The IEEPA Tariffs Are Gone. The Damage Is Done.

More than 10 months after they were enacted, the U.S. Supreme Court finally put an end to President Trump’s “emergency” tariffs.

Gone are the president’s “reciprocal tariffs” against virtually every nation on Earth; the “fentanyl tariffs” against Mexico, Canada, and China; and the “Bolsonaro prosecution” tariffs against Brazil. Precluded by extension are the threatened “Greenland” tariffs against European allies, the TV commercial tariffs against Canada, and perhaps dozens of other tariffs the president had yet to imagine.

The Supreme Court made the right decision. As a matter of law, the Court was correct to find that the International Emergency Economic Powers Act (IEEPA) does not confer tariffing power to the president. As a matter of policy, the Court was right to stop the president from imposing any tariffs on any country for whatever reason he wants.

Unfortunately, the president’s illegal tariffs have already caused damage that no court can undo.

Consumers Were Damaged

First, the tariffs have irreparably harmed consumers. According to Goldman Sachs, U.S. consumers have paid the majority of the $175 billion tariff bill by way of higher prices. Importers paid the tariffs directly to the government but then passed the cost on to consumers by raising their prices. The Supreme Court’s decision opened the door to tariff refunds, and the U.S. Court of International Trade is now moving quickly to ensure those refunds are processed. But only the importers who paid the government directly—or the investment banks who bought the rights to their claims—will be able to recover. Even if consumers did have a claim, it would be virtually impossible to determine how the tariffs’ costs were shared across tens of millions of transactions.

That means importers are set up for a windfall: They will recover the sum paid for the tariffs regardless of whether they absorbed the costs themselves or passed them on to others. Consumers, meanwhile, will be left out in the cold. That is the sorry consequence of the Trump administration’s irresponsible exercise of power: Its illegal tariffs took money out of consumers’ pockets, only to pass it on to big businesses, banks, and their lawyers.

The U.S. Economy Was Damaged (and Continues to Be Damaged)

The tariffs have also harmed the economy more broadly. Haphazardly threatening random tariffs on every country on Earth, only to “reduce” them to their highest level in 100 years, has not produced an economic “golden age” or the manufacturing renaissance that was promised. Manufacturing employment is down. Unemployment is up. Consumer sentiment is down. The trade deficit—the supposed “emergency” that the IEEPA tariffs were supposed to fix—is up and just hit a record high. None of this was unforeseeable: Higher prices and uncertainty put a drag on the economy. Forcing manufacturers to pay more for machinery and inputs hurts manufacturing.

Unfortunately, even in the wake of the Supreme Court’s decision, the U.S. economy is likely to see little relief, either in terms of tariff costs or uncertainty.

Hours after the Court’s decision on Feb. 20, the Trump administration announced that it would impose other tariffs under different statutes, perhaps collecting “even more money” than before. On the same day, the president announced a new global 10 percent tariff under Section 122 of the Trade Act of 1974. The next morning, he announced the tariff would actually be 15 percent. The White House, meanwhile, posted a meme on social media: “Keep Calm and Tariff On.”

Businesses and consumers will find that advice hard to follow.

Take the statute that the Trump administration just invoked. Section 122 provides the president the authority to apply a 15 percent global tariff to deal with “large and serious United States balance of payments deficits.” Putting to one side whether such a condition exists, the statute allows the president to act unilaterally for only 150 days. No one knows what the tariff regime will look like after that.

The Trump administration has also signaled its plans to invoke Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. But those statutes are intended to allow the president to adjust tariffs for certain specific reasons (unfair trade practices and national security, respectively) and with specific limitations (on a country-level or a product-level basis). Neither these nor other statutes provide the president a clear way to reverse engineer his IEEPA tariffs. Should he try to do so anyway—something we will not know for many months—there will be more legal challenges, more uncertainty, and more economic harm.

The U.S.’s Credibility Was Damaged

The damage caused by the tariffs goes beyond the U.S. economy to its credibility as an ally and leader.

It is easy to forget that it was the United States that built the rules-based world trading system, beginning with the General Agreement on Tariffs and Trade in 1947 and the World Trade Organization (WTO) in 1995. The U.S. did so because, among other reasons, it recognized that trade—and the certainty created by trading rules—was beneficial to the economy. It is true that the U.S. had not always lived up to its trade obligations, but historically it was largely compliant with them. Even its actions to cripple the WTO’s Appellate Body were within the letter of the law. No one can credibly claim that of the U.S.’s behavior today. The IEEPA tariffs were an open repudiation of the core commitments that the U.S. made and that it had induced the rest of the world to make. Who will follow the U.S. the next time it attempts to lead?

Even our closest allies are now looking for new partners. They now talk about “de-risking” away from the United States, moving away from the U.S. dollar, and a “rupture in the world order[.]” Amid the IEEPA tariff war, the European Union forged ahead with a major trade agreement with India and another with Mercosur countries (Brazil, Argentina, Uruguay, and Paraguay). Canada—Canada—struck a deal with China.

The timing could not be worse. A rising China and a revanchist Russia pose the greatest challenge to U.S. security since the Cold War. On its own, the United States is strong but vulnerable to the challenge. The U.S. comprises almost 26 percent of global economic production and 40 percent of global military spending (on a nominal basis). Together with its allies, however, the U.S. is virtually indomitable, by one account representing almost 70 percent of both the world’s economic output and military power. After the IEEPA trade war, those alliances and that overwhelming dominance are at risk.

The Damage Was Avoidable

It did not have to be this way. The Court of International Trade (CIT) struck down the tariffs and issued a permanent injunction barring their application on May 28, 2025, less than two months after “Liberation Day.” But the U.S. Court of Appeals for the Federal Circuit immediately stayed the injunction pending appeal. Moreover, the Supreme Court denied the plaintiffs’ petition to take the appeal directly. By the time the Federal Circuit finally affirmed the CIT’s holding in September 2025, the Supreme Court had issued its ruling in Trump v. CASA, restricting the capacity of lower courts to issue nationwide injunctions. The Federal Circuit thus vacated the CIT’s injunction and sent it back to the CIT for reconsideration. Judge Richard Eaton eventually decided on March 4, 2026, that CASA does not apply to the CIT. But another six months would pass before the tariffs were stopped again—this time by the Supreme Court’s final decision.

Had the Federal Circuit left the CIT’s injunction in place, or had the Supreme Court accepted the plaintiffs’ petition to fast-track the appeal and reimposed an injunction, most of the damage could have been avoided. Here, despite coming out correctly on the merits, both the Federal Circuit and the Supreme Court fumbled the ball. They ensured the illegal tariffs would stay in place while they pondered whether IEEPA—a statute that does not mention the word “tariff” and had never before been used to impose one—allowed the president to apply unlimited tariffs on whatever country for whatever reasons he wanted.

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The IEEPA tariffs are now gone. Refunds for their illegal collection are forthcoming. But the damage—to America’s consumers, its economy, its alliances, and its credibility—is done. At best, 10 months of tariffs will take a generation to undo. One hopes that the courts will keep that in mind the next time this or another administration enacts patently illegal tariffs. There is a reason preliminary injunctions exist.

– Stratos Pahis is an associate professor of law and co-director of the Dennis J. Block Center for the Study of International Business Law at Brooklyn Law School. Published courtesy of Lawfare.