“Today’s Supreme Court announcement on tariffs provides much-needed certainty for American businesses and manufacturers, allowing global supply chains to function without ambiguity,” the National Retail Federation said in a statement. statement following the ruling. “Clear and consistent trade policies are essential to economic growth and creating jobs and opportunities for American families.”
The nation’s highest court ruled that Trump’s broad tariffs on U.S. trading partners, set under the International Emergency Economic Powers Act (IEEPA), exceeded the president’s authority. The Supreme Court sends the case back to the lower court for dismissal.
Still, the reversal has raised new questions about whether retailers and U.S. consumers will actually feel a financial impact and whether the decision means more uncertainty or less.
Just hours after the ruling was made, Trump condemned the ruling and said his administration has “alternatives,” referring to sector-specific tariffs and announcing a new, global rate of 10%.
It is also unclear if, when and how the government can refund tariffs that have already been paid and are deemed unconstitutional.
“We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers,” the NRF said in its statement. “The refunds will provide an economic boost and allow companies to reinvest in their operations, their employees and their customers.”
The NRF represents a number of US retailers, from major retailers such as Walmart to smaller brands and manufacturers.
In an interview with CNBC on Friday afternoon, David French, executive vice president of government relations for NRF, acknowledged that retailers are still facing other tariffs and may face new ones based on Trump’s comments.
“The president has many other tariff tools in his toolbox, and we certainly expect he will use these tools to advance his tariff agenda and maintain his influence in negotiations with other countries,” he said. “The good thing about today’s ruling is that it takes away one of the tools and will build a little more certainty into the tariff process.”
Compared to Trump’s broad use of IEEPA, alternative tariffs the president imposed Friday have “hereditary limitations,” French said. Some of these rates have time limits or the government must overcome additional hurdles.
And, he said, if companies get back the rates they paid, they can spend it on investing in their businesses, hiring more workers or lowering prices.
He said the trade group is “hopeful that the president will conclude that getting the refunds as quickly and easily as possible would be in everyone’s interest” — and noted that this could also help Trump ahead of the midterm elections.
In December, warehouse club Costco sued the Trump administration seeking full reimbursement of the tariffs it paid and blocking the continuation of the tariffs.
In the lawsuit, filed in the United States Court of International TradeCostco said it risked losing money it had already paid even if the Supreme Court rules against the rates.
Costco did not respond to a request for comment on the Supreme Court’s ruling and what it means for the retailer’s lawsuit.
While Friday’s ruling is largely positive for the retail industry, the idea that it will bring more predictability and lower costs is likely “a pipe dream,” said Steven Shemesh, retail analyst at RBC Capital Markets.
“This administration has been pretty adamant on tariffs and trade balance, and if it doesn’t happen this way, I’m pretty sure it will happen some other way,” he said ahead of Trump’s announcement of new tariffs. “It may have a different appearance, shape, size and smell, but I think it will look the same in the end.”
Clothes and shoes
Footwear is one of the hardest-hit industries, as nearly 100% of all footwear sold in the U.S. is imported, according to Footwear Distributors and Retailers of America, the industry’s trade group.
Even before Trump’s first term, shoe manufacturers were moving some of their raw materials from China as the workforce shrank, says Matt Priest, CEO of FDRA. Still, it would be unrealistic to bring production back to the U.S., he said, and moving it to another part of Asia could be difficult.
In an interview with CNBC on Friday, Priest said the decision is a step toward more predictability for the footwear industry because it limits the tariffs Trump can use to ones that are “not that drastic” and may require input from Congress.
“Even though it is still uncertain to some extent, we are not on the playing field where we have those exorbitant rates,” he said.
The trade group, which includes well-known shoe companies and brands such as Nike, Crocs and Puma, held an emergency video conference with 325 companies on Friday afternoon. Priester said trade group members were optimistic, but also had many questions. Among them, members asked when and if they would receive refunds and when IEEPA rates would officially end, specifically whether they would still be affected by shipments arriving in the coming days.
Priest said he doesn’t expect refunds to happen anytime soon and that the trade group has coached members not to rely on them. He said the group’s work continues as it tries to work with the Trump administration and Congress to push them to take a “more surgical, thoughtful approach” to tariffs.
Speaking on a call with trade group members, Priest said: “There was optimism that this part of this journey was at least somewhat redirected,” and he described the ruling as “a victory” for the industry.
But, he added, without the refund and other details not yet laid out, “it’s still a long way to go.”
#Retailers #Trump #tariff #reversal #victory #uncertainty #remains