Commentary: Trump’s Tariffs Face a Supreme Court Showdown

The shipping and trade industries have largely become accustomed to the U.S. government’s use of tariffs in recent years. However, a U.S. federal appeals court ruling last week that declared Donald Trump’s “reciprocal” tariffs unlawful has renewed industry attention, reigniting hope among affected stakeholders that some tariffs may be eliminated [para. 1]. The ruling, scheduled to take effect on October 14, 2025, gives the Trump administration a limited window to respond. The administration promptly filed an appeal with the Supreme Court, seeking a review before the appellate court’s decision is implemented [para. 2][para. 4].

This legal development pertains specifically to tariffs imposed under the International Emergency Economic Powers Act (IEEPA)—namely, the “reciprocal tariffs” and “fentanyl” tariffs—rather than broader tariffs like those enacted under Section 301 and Section 232, which remain in force. The court found that IEEPA does not provide the president authority to levy taxes on goods globally, thus invalidating these tariffs [para. 4]. The Supreme Court, currently on summer recess, is expected to decide soon whether to review the case, with a decision unlikely before summer 2026. In the meantime, the administration will likely request that the Supreme Court stay the lower court’s ruling, keeping the tariffs in place while the challenge proceeds [para. 5].

If the Supreme Court upholds the appeals court’s ruling, the “reciprocal” and “fentanyl” tariffs would be deemed illegal, potentially requiring the U.S. government to refund up to $100 billion collected under these measures as of August 2025. Although this prospect excites some affected parties, the reality is far more complicated. The procedures for tariff refunds are intricate and time-consuming, with suggestions that financial intermediaries might step in to facilitate early payments to some claimants [para. 6]. In any case, refunds would be welcomed by the industry despite bureaucratic hurdles.

Should the tariffs be overturned, the Trump administration is unlikely to relent. Instead, it has alternative legal avenues to pursue protectionist policies. Section 122 of the Trade Act of 1974 allows the president to impose tariffs of up to 15% for 150 days to address balance-of-payment deficits—although this authority is time- and rate-limited [para. 8]. For longer-term or broader action, Sections 301 and 232 of related trade acts offer processes to investigate unfair trade practices and national security threats, resulting in more targeted, but procedurally slower, tariffs [para. 9]. The administration could also invoke section 338 of the Smoot-Hawley Tariff Act of 1930, a rarely used provision that permits up to 50% tariffs for five months in response to discriminatory foreign practices, though this would likely face judicial scrutiny [para. 11].

Ultimately, the legal outlook remains uncertain, and industry confidence in a rapid or favorable Supreme Court decision is low, given the current political composition of the Court and its recent rulings [para. 13]. If the court upholds the tariffs’ illegality, the Trump administration is expected to continue pursuing new tariffs through different legal mechanisms, resulting in continued unpredictability and volatility for shipping and logistics sectors [para. 13]. The article concludes by noting that these are the personal views of Zhang Huafeng, COO at Duke Shipping Agency, and do not necessarily reflect the publisher’s position [para. 15].