Don’t Bet on Low Rates, Businesses Say, Even After Trump’s Emergency Payments Are Shot
Consumers expecting lower prices after the US Supreme Court overturned the White House’s emergency tariffs may be disappointed, as businesses plan to use any relief to offset higher costs and brace themselves for refunds.
The US Supreme Court’s decision last week was a major victory for more than a thousand businesses, including supermarkets Costco and Goodyear Tire & Rubber, who sued the government saying that US President Donald Trump does not have the legal authority to impose tariffs under the International Emergency Economic Powers Act of 1977.
But this decision also opened a bureaucratic labyrinth for the importers, lawyers, and government officials, because the court did not say how the government should return the approximately $175 billion that it had collected. Because businesses expect long waits for refunds, consumers shouldn’t expect to see relief, small business owners told Reuters, as Trump imposes new tariffs.
“We’ve taken almost all the tax costs; we don’t think there’s any reason to reimburse anyone,” said Eva St. Clair, owner of the Princess Awesome clothing company. The company, which in April brought one of the first legal challenges to emergency fees, paid a $30,000 fine, and survived in part by setting a pot for customers who raised $8,000, he said.
Trump’s tariffs, imposed through a series of executive orders targeting imports from nearly all of the US’s trading partners, have pushed up prices and contributed to a drop in US consumer confidence. A February 12 study by the Federal Reserve Bank of New York concluded that US consumers and companies bear nearly 90% of the cost of taxes.
Anger over taxes has damaged Americans’ perception of Trump’s handling of the economy. As of mid-February, his approval rating on the issue stood at 34%, the worst score of his second term and well below his first, according to a Reuters/Ipsos poll.
Josh Ketter, CEO of Lincoln, Nebraska-based Spreetail, which sells Razor scooters, Sterilite boxes and above-ground pools on Amazon.com, said the company has “no price changes planned.”
“If we do get a refund, it will cover a portion of the loss from last year,” said Ketter, whose company paid an estimated $50 million in 2025. Ketter expects the recovery process to take a few years, but hopes it will be shorter.
It’s not over
Trump responded to the Supreme Court’s decision by imposing a temporary 10% tariff on US imports from all countries, which could rise to a threatened 15%, which is the maximum legally allowed under a 1974 law that requires Congress to agree to extend it after 150 days. His application of this law may invite further legal challenges.
Jason Cheung, chief executive of toy maker Huntar, said last week before the court’s decision that he doubted prices would drop. “We may offer higher discounts to our customers but for repeat purchases,” he said.
Spreetail’s Ketter said the new rates will not change the way he runs his business, while St. Clair of Princess Awesome says she will adjust incoming shipments so they don’t enter the US until 150 days have passed.
Before the repeal of emergency tariffs, US consumers faced an average effective tax rate of 16%, the highest since 1936. The decision briefly lowered the tax rate to 9.1%, though it will rise to 13.7% after the 15% global rate goes into effect on Tuesday, according to the Yale Budget Lab.
“Effective spending is not significantly lower than last week,” said Joshua Bailey, chief economist for North America and global economics at the Economist Intelligence Unit. “That, combined with firms’ reluctance to reverse past price increases, means the decision is unlikely to provide much relief to households.”
(Reporting by Savyata Mishra and Neil J Kanatt in Bengaluru, Nick Brown and Ariana McLymore in New York, Tom Hals in Wilmington, Alex Marrow in London; Writing by Sayantani Ghosh; Editing by David Gaffen)
