Following a U.S. Supreme Court ruling last week that his administration does not have authority to impose tariffs under a national security law, President Trump turned to a different mechanism as other federal agencies explained the timeline for ending the rejected tariffs.
On February 20, the U.S. Supreme Court upheld a lower court’s decision that President Trump’s use of the statutory International Emergency Economic Powers Act (IEEPA) of 1977 exceeded his authority, thereby not granting the President the power he claimed to impose tariffs.
Tariffs are taxes and thereby authorized by Congress, the court said. IEEPA had previously been used only to impose sanctions.
The Supreme Court’s 170-page, 6-3 ruling was authored by Chief Justice John Roberts together with Justices Sonia Sotomayor, Elena Kagan, Ketanji Brown Jackson, Amy Coney Barrett, and Neil Gorsuch.
Justice Brett Kavanaugh wrote the dissent, joined by fellow conservative Justices Clarence Thomas and Samuel Alito.
Refund Process
The Justices did not order refunds, nor did they address the extent to which the approximately 300,000 importers of record are entitled to refunds, or how the refund process would work —leaving the question to be answered by other entities such as the U.S. Court of International Trade, the U.S. Department of Treasury, and the U.S. Customs and Border Protection (CBP) as the administrator.
This process will have an impact on small importers in particular. The potential estimated refund amount is between $130 billion and $175 billion. The parties included in the lawsuit can sue for refunds and other importers presumably can apply for refunds under an existing CBP mechanism. It remains to be determined whether this process will be modified; observers predict the process will be overwhelmed, including by additional litigation.
Other Tariff Authorities
White House officials immediately said tariffs will remain as an option under different legal authorities, including:
• Temporary tariffs of up to 15% for 150 days can be imposed via Section 122 of the 1974 Trade Act — via the U.S. Trade Representative’s Office.
• Product-specific tariffs under Section 232 of the Trade Expansion Act of 1962 can be imposed to protect national security — via the U.S. Department of Commerce.
• Country-specific tariffs under Section 301 of the Trade Act of 1974 can be imposed to protect U.S. commerce from harmful foreign trade practices — via the U.S. Trade Representative’s Office.
• Reciprocal tariffs to match other countries may be imposed via Section 338 of the Trade Act of 1930 — allowing duties of up to 50% and allowing the President to act unilaterally within 30 days.
Steel and aluminum tariffs remain under Section 232, and Chinese tariffs remain under Section 301.
The Trump administration also has listed other possible alternatives to raising revenue, including imposing import fees or license fees.
Later on February 20, President Trump issued an executive order ending the IEEPA tariffs, followed immediately by a proclamation “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems.”
The proclamation imposed a 10% tariff on all imports, effective February 24 for 150 days, with some exceptions while also initiating additional Section 301 investigations to address unfair foreign trade practices. The exceptions were for certain critical minerals, metals, energy products; natural resources/fertilizers that cannot be produced in the United States or otherwise produced in sufficient quantities to meet domestic demand; certain agricultural products, pharmaceuticals, certain electronics; certain vehicles and certain aerospace products, informational materials together with U.S.-Mexico-Canada Agreement (USMCA)-compliant goods of Canada and Mexico; and textiles and apparel articles that enter duty-free under the Dominican Republic-Central America Free Trade Agreement.
In a social media post on Saturday, February 21, the President raised the 10% tariff to the maximum allowed, 15%.
And on Monday, February 23, U.S. Customs and Border Protection (CBP) listed the executive orders imposing IEEPA tariff collections that would end as of 12:00 a.m. ET on February 24. CPB also also explained how it would implement the temporary additional
10% duty on imports.
CalChamber Position
The California Chamber of Commerce continues to voice concern about tariffs or any other actions that increase the cost of doing business for California entrepreneurs. CalChamber has long been committed to supporting a national free trade agenda that fosters economic growth and job creation. CalChamber will continue to focus on eliminating tariff and nontariff barriers to support the expansion of American exports. Further, a focus on trade agreements instead will ultimately lower both tariff and nontariff barriers and help create long-term, sustainable economic growth.
CalChamber encourages the administration to adhere to the spirit of the ruling and not look to other avenues to impose tariffs but work to refund the tariffs in a smooth and orderly fashion, thereby offering certainty for the business community, especially small businesses.
CalChamber opposes protectionist measures which create uncertainty, disrupt global supply chains, raise consumer prices, limit choices of products for consumers, hinder the competitiveness of California businesses, and invite retaliation.
CalChamber believes strengthening economic ties and enhancing regulatory cooperation through agreements with our top trading partners that encompass both goods and services, including financial services, is essential to eliminating unnecessary regulatory divergences that may act as a drag on economic growth and job creation.
CalChamber seeks commercially meaningful outcomes in negotiations with regions around the world and supports bilateral, regional and multilateral trade agreements, which are critical to consumers, workers, businesses, farmers and ranchers, and would allow the United States to compete with other countries that are negotiating agreements with each other.
A brief online CalChamber survey of members in December 2025 reflected the significant impact of federal tariffs on companies’ supply chains, costs and hiring decisions.
Staff Contact: Susanne T. Stirling
