New Delhi. On February 20, the US Supreme Court announced its decision on US President Donald Trump’s tariffs. He canceled Trump’s decision to impose reciprocal tariffs. The court declared the global tariff imposed under the International Emergency Economic Powers Act (IEEPA) unconstitutional. The court says that only Congress has the right to impose taxes on such a large scale, not the President. The US Supreme Court, in its 6-3 decision, upheld the lower court’s decision, which had termed Trump’s decision to impose tariffs as illegal.

The Trump administration had imposed reciprocal tariffs on imports from almost every country in 2025, including a baseline tariff of up to 34% on China and 10% on other countries. Apart from this, 25% additional tariff was imposed on some goods from Canada, Mexico and China in the name of fentanyl prevention. The court declared most of these illegal, although some tariffs like steel and aluminum will remain under other laws (related to national security).

big question of refund
According to experts, this could lead to changes in global trade relations and reduce the already high prices on American consumers. Till now, these tariffs have collected revenue of 133 to 200 billion dollars in the US treasury. The court did not give clear instructions on refund, but the decision is retroactive i.e. the tariffs already collected will be considered illegal.

American importers will get refund
Refunds will go primarily to US importers (companies like Costco, Toyota, Revlon, Goodyear, etc.) because they were the ones who passed the tariffs to US Customs and not the foreign countries directly. Foreign exporters were indirectly affected, but the money came from American businesses.

Refund will be given along with interest
Trump administration officials have already said that if the tariffs are found illegal, refunds with interest will be given. Hundreds of companies have already filed cases in the US Court of International Trade (CIT). According to Treasury Secretary Scott Besant, the Treasury has sufficient funds (about $774 billion), but the refund process will be complicated. This may take weeks, months or even a year. Refunds will not be automatic. Importers will have to file claims.

Trump can continue tariffs through other legal avenues
Trump immediately responded to the decision, saying he would pursue tariffs through other legal avenues and seek support from Congress. This decision will affect the global economy, especially relations with major trade partners like China, Canada and Mexico. This is considered to be the biggest judicial defeat of Trump’s second term so far. What happens next will depend on lower courts and possible new laws.