This decision will limit one of the Administration’s major anti-growth policies. The immediate benefits will be muted because, also as expected, President Trump is pushing alternate ways to try and raise tariffs. He has announced, under another statute, that he has imposed an across-the-board 15 percent global tariff. The catch is that these tariffs will only be effective for 150 days. If Congress does not pass legislation imposing these rates by the 150-day deadline, then the tariffs will disappear.
Let’s start with the good news. The removal of the Trump tariffs will save consumers money. A research report released by the New York Federal Reserve found “that nearly 90 percent of the tariffs’ economic burden” falls “on U.S. firms and consumers.” The Tax Foundation estimates that the tariffs “amounted to an average tax increase per US household of $1,000 in 2025.”
In other words, tariffs are simply taxes that harm consumers. Eliminating these tariffs creates a large tax break for millions of families. The Tax Foundation estimates that households will pay $600 less in taxes in 2026 due to the elimination of the Trump tariffs.
Businesses will also benefit. Businesses large and small rely on lower-cost imports to competitively manufacture goods in the U.S. Repealing the IEEPA tariffs reduces the average tariff rate on these inputs from 13.8 percent to 6.7 percent, which will meaningfully reduce the costs to manufacture goods in the U.S.
If not for the 15 percent global tariff, these cost reductions would create positive momentum for the economy, which can use a boost after the weak fourth quarter GDP report that also was released on Friday.
Unfortunately, Trump imposed an across-the-board global tariff of 15 percent. These tariffs reverse the tax relief that businesses and families would have otherwise received. Thus, the positive economic benefits will be limited as tariff uncertainty will persist. Due to this uncertainty, there will be less investment, less hiring, and a weaker overall economic environment.
Making this uncertainty worse, the new tariffs are temporary – they expire in 150 days. This expiration, and the unlikelihood that Congress will confirm them, means that businesses and families can expect the costs for imported goods and materials to be cheaper in August when the new tariffs expire. Thus, businesses and families have an incentive to delay their purchases to the second half of the year. Due to this incentive, it is likely that economic activity will be even weaker than otherwise in the first half of the year.
The other issue that the Supreme Court ruling raises is refunds to the companies who paid the tariffs. The Penn Wharton Budget Model estimates that business (large and small) are owed up to $175 billion in refunds. Such payments would be unprecedented in the sense that levying unauthorized taxes on the American people is unprecedented. However, since the Administration had no authority to impose these tariffs (i.e., taxes), it follows that the businesses deserve a refund.
Whether refunds will be paid is an entirely different question. If they are, and they should be, then the annual deficit will likely be hundreds of billions of dollars larger in the coming fiscal years than previously expected. Higher deficits will exert upward pressure on interest rates, which will worsen the affordability problems many families are still facing.
While the Supreme Court ruling was decided based on critical legal questions, from an economic perspective the decision reduces a large tax burden that families across the U.S. have been paying – a tax increase that no Congressperson voted on. While the President’s response to the ruling will potentially reverse these benefits in the near-term, the decision establishes an important taxpayer protection longer term. And that is a reason for taxpayers to celebrate.
Dr. Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute.
