The US Supreme Court on Friday overturned most of President Donald Trump’s tariffs, which could lead to more than $175 billion in tariff refunds for American companies. In a 6-3 decision, the justices ruled that the International Emergency Economic Powers Act (IEEPA)—the law that the Trump administration used to justify many of his sweeping global tariffs—does not grant the president the power of taxation, and tariffs are a form of tax on imports.

Since the start of his second term, Trump has enacted a variety of tariffs targeting almost every country in the world. Most of these tariffs, including the chaotic so-called “reciprocal tariffs” last April that sought to tax even islands with only penguin populations, were authorized under IEEPA according to the administration’s executive orders.

From the beginning, legal scholars have questioned whether IEEPA was meant to cover tariffs at all. In his opinion striking down the tariffs, Chief Justice John Roberts wrote, “It is also telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope.” Instead, the president “must identify clear congressional authorization to exercise it,” he wrote.

The Friday decision marks a significant and rare pushback from the Supreme Court against the Trump administration’s volatile policies. Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.

During a White House breakfast with governors Friday morning, Trump reportedly called the ruling a “disgrace” and said that he had a backup plan, according to CNN’s Kaitlan Collins.

The Supreme Court’s ruling doesn’t cover all the tariffs announced in the past two years. For example, the sector-specific ones on steel, aluminum, and copper aren’t impacted, because they were imposed under different presidential authorities.

“Small businesses are rightfully worried that the administration will respond to this legal defeat by simply reimposing the same tariff policy through other means,” Dan Anthony, executive director of the small business coalition We Pay the Tariffs, said in a statement. “Tariffs reimposed under different statutory approaches would have the same destructive effect.”

It won’t be easy for the administration to replace those tariffs immediately, though, since other relevant policies often come with their own procedures and lengthy trade investigations before the tariffs can be ordered.

The ruling also kickstarts the process to refund a massive amount of tariffs collected in the past year. Economists have estimated that more than $175 billion has been collected since February 2025 under the IEEPA tariff policies. In January, anticipating the Supreme Court decision, Trump posted on Truth Social that the refund process “would be a complete mess, and almost impossible for our country to pay.”

Many major companies, including Costco, Prada, BYD, and Goodyear, have filed lawsuits against the federal government to demand tariff refunds. Cantor Fitzgerald, a financial services company run by the sons of US commerce secretary Howard Lutnick, has also created ways for its clients to bet that the tariffs would be overturned, WIRED first reported in July 2025.