What a Supreme Court tariff ruling may mean for your money

The Supreme Court may decide the fate of President Donald Trump’s tariff agenda as soon as Friday — and the ruling has implications for consumers’ wallets, according to economists.

If the high court were to rule that certain tariffs are unconstitutional, it could yield financial relief for consumers, who have at least partly borne the cost of those import taxes via higher prices, economists said.

The tariffs in question are those levied under the International Emergency Economic Powers Act of 1977.

The Trump administration used IEEPA as a legal pathway to impose tariffs on a broad swath of trading partners and raise the tariff rate on imports to their highest level since the early 20th century. No president had previously used the law to impose tariffs.

Tariffs are a tax on imports. Those taxes are largely paid by the U.S. entity that imports the item, not foreign exporters, economists said.

The U.S. currently has an average effective tariff rate of 16.9%, the highest since 1932, according to John Ricco, associate director of policy analysis at the Yale University Budget Lab.

A paper published last week by researchers at the Federal Reserve Bank of New York said that U.S. firms and consumers bore “the bulk” — roughly 90% — of the economic burden of tariffs imposed in 2025. White House officials disputed that finding.

Businesses generally pass on at least some of their costs to consumers, according to economists and various economic analyses.

Tariffs have made everything from furniture to clothing, food, electronics and cars more expensive, according to the Yale Budget Lab.

The Tax Foundation found that Trump’s tariffs cost the average consumer $1,000 in 2025, and will cost them $1,300 in 2026.

The Yale Budget Lab reached a similar conclusion: Based on the current tariff rate, the average consumer will pay an additional $1,300 to $1,700 in 2026, compared to what they would have paid pre-2025, Ricco said.

If the court strikes down IEEPA tariffs as unconstitutional, that burden would fall by about half in 2026, to about $600 to $800, Ricco said.

A majority of Supreme Court justices appeared skeptical about the legality of IEEPA tariffs during oral arguments in November.

Without those tariffs, the effective tariff rate would drop to about 9%, which is still much higher than the roughly 2% rate before Trump started his second term in office, Ricco said.

The consumer burden doesn’t fall to zero because the Trump administration has other tariffs on the books that rely on different authorities — and ones that stand on firmer legal ground, economists said.

The Trump administration has said it will use those pathways to impose new tariffs — and get to the “same place” — should the Supreme Court strike down IEEPA tariffs.

“Even if we assume IEEPA is ruled to be used unconstitutionally, it won’t change a lot,” said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics and a former Treasury Department official focused on international trade. “The president will come in and use other statutes for virtually the same tariffs.”

The Tax Policy Center estimates that if the Supreme Court rules against IEEPA tariffs — and they aren’t replaced — taxes on households would fall by $1.4 trillion over 10 years, saving families an average of $1,200 in 2026.

Trump has invoked emergency powers under IEEPA to impose a broad swath of his tariff regime.

U.S. Customs and Border Protection collected about $133.5 billion of tariff revenue in fiscal year 2025 and in fiscal year 2026 through Dec. 14, according to a Cato Institute analysis of federal data. That’s about 60% of total tariff revenue collected during that time.

Trump used IEEPA to impose a 10% baseline tariff on all U.S. trading partners on so-called “liberation day” in April 2025, and put even higher “reciprocal” tariffs on dozens of nations to narrow the trade deficit.

Since Inauguration Day, he has also invoked IEEPA to put tariffs on Canada, China and Mexico — the U.S.’s largest trading partners — for allegedly failing to prevent fentanyl trafficking.

Since the start of his second term, he also invoked the law to suspend the “de minimis” rule, which exempted imports under $800 from tariffs, and to put levies on countries like India for importing Russian oil and on Brazil for the prosecution of former President Jair Bolsonaro, according to a Congressional Research Service analysis in January.

However, there are several other laws the Trump administration has relied on to impose tariffs — and can leverage more forcefully if the Supreme Court strikes down IEEPA tariffs, said Hufbauer of the Peterson Institute.

That would “take away some of the relief” for consumers, he said.

One of the “easiest” existing authorities is Section 232 of the Trade Expansion Act of 1962, Hufbauer said.

Indeed, Trump has already used Section 232 to implement tariffs on a range of items, such as steel, aluminum, automobiles and auto parts, copper, trucks and wood products.

“We believe the White House could recreate a number of the existing tariffs using numerous other statutes … within days should IEEPA be struck down,” according to a January research note by Chris Krueger, a strategist in TD Cowen’s Washington Research Group.

It’s unclear to what extent businesses and consumers might receive refunds after a Supreme Court ruling.

Mark Zandi, chief economist at Moody’s, said he thinks the odds “are better than even” that impacted businesses would get some form of compensation from the federal government if the Supreme Court strikes down the IEEPA tariffs.

“If the Supreme Court is silent on this issue and the Administration doesn’t provide compensation, there will likely be significant legal actions by businesses, that the Court will ultimately need to adjudicate on,” he wrote in an e-mail.

Trump had also floated the idea of sending Americans $2,000 tariff “dividend” checks from the generated revenue.

However, it’s unlikely the government would send checks to consumers regardless of the Supreme Court outcome, except perhaps in the event of a near-term recession, Zandi said.

“This would require legislation, and I don’t see Congress passing it, even under reconciliation,” Zandi said.