U.S. to Stop Collecting Tariffs Ruled Illegal by Supreme Court

Post by : Saif

The United States government will stop collecting certain tariffs after the Supreme Court ruled them illegal. The decision marks an important moment in the country’s trade policy and could have major financial effects.

U.S. Customs and Border Protection (CBP) announced that it will halt the collection of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) starting at 12:01 a.m. EST on Tuesday. This comes more than three days after the Supreme Court declared the duties unlawful.

In a message sent to shipping companies through its Cargo Systems Messaging Service, CBP said it would deactivate all tariff codes linked to former President Donald Trump’s IEEPA-related orders. These tariffs had been applied to various imported goods.

The Supreme Court’s ruling means the tariffs were not legally valid. However, CBP did not explain why collections continued for several days after the court’s decision. The agency also did not provide details about possible refunds for companies that paid the tariffs.

The halt in tariff collection coincides with the introduction of a new 15% global tariff by President Trump under a different legal authority. This new tariff replaces the ones struck down by the court but is based on a separate law.

It is important to note that the suspension applies only to tariffs imposed under IEEPA. Other tariffs remain in place. These include tariffs under Section 232, which are based on national security concerns, and Section 301, which address unfair trade practices.

The financial impact of the court’s decision could be large. Economists from the Penn-Wharton Budget Model estimate that the IEEPA-based tariffs generated more than $175 billion in U.S. Treasury revenue. Their analysis suggests that these tariffs were bringing in more than $500 million per day in gross revenue.

If companies seek refunds, the government could face significant repayment claims. However, officials have not yet confirmed how or when refunds might be handled.

Tariffs are taxes placed on imported goods. They are often used to protect domestic industries or to respond to trade disputes. However, they must follow legal guidelines set by Congress and the Constitution. When a court rules that tariffs were imposed without proper authority, the government must adjust its actions.

This situation highlights the complex balance between the executive branch and the judiciary. While presidents can act quickly in matters of trade and national emergencies, those actions must still follow the law.

For businesses, the decision brings both relief and uncertainty. On one hand, companies will no longer have to pay the IEEPA tariffs. On the other hand, the new 15% global tariff could continue to affect import costs.

Trade policy plays a major role in the economy. Changes in tariffs can affect prices of goods, supply chains, and international relations. Companies that rely on imported materials or products may see changes in their costs in the coming weeks.

The government has promised to provide more guidance to the trade community through official messages. For now, importers and exporters are closely watching for updates, especially regarding possible refunds.

The Supreme Court’s ruling shows how legal decisions can shape economic policy. It also reminds leaders that major financial measures must stand on firm legal ground.

As the new tariff takes effect and the old one ends, businesses and consumers alike will feel the impact. The coming months will reveal how this shift influences trade, revenue, and the broader economy.

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