The U.S. Supreme Court dealt a blow to President Donald Trump’s tariff plan last week. But if you’re a small-business owner who’s been affected by tariffs, don’t get too excited.
This fight is far from over. And so is the uncertainty. Even when courts push back, presidents retain enormous tariff authority — and small businesses should assume continued volatility.
The president had imposed tariffs on a number of countries under the International Emergency Economic Powers Act (IEEPA), which authorizes him to “declare a national emergency and regulate or block commercial and financial transactions with foreign nations deemed an unusual, extraordinary threat to U.S. national security, foreign policy, or the economy.”
The Supreme Court upheld previous lower court rulings that said he exceeded his authority to do so. But President Trump has vowed to continue the fight. He’s far from finished.
For starters, he’s able to raise tariffs under the 1930 Smoot-Hawley Act. This law allows the U.S. to impose tariffs (up to 50%) on imports from countries that “discriminate” against U.S. goods through unfair duties, taxes, or regulations. It requires an investigation and a time-limit but it pretty much leaves the entire decision up to the president.
The problem for President Trump is that imposing tariffs under Smoot-Hawley requires Congressional approval which is far from guaranteed, even though his party holds slim majorities in both the House and Senate, given the pushback he’s received from other Republicans on his past tariff actions.
The president can also take advantage of Section 122 of the Trade Act of 1974. This legislation gives “balance-of-payments” authority to the executive office and allows him to impose a 15% tariff on countries as he chooses. He used this authority last week to raise the global tariff the U.S. charges to other countries from 10% to the maximum 15%. Unfortunately for him, there’s a 150-day limit to this tariff, unless Congress approves an extension which is, as mentioned previously, far from assured.
Finally, the president can invoke Section 232 of the Trade Expansion Act of 1962, along with Section 301 of the Trade Act of 1974. Both allow the president to impose tariffs on selected sectors and industries. These laws were behind the tariff increases enacted by the Biden Administration in 2024 on steel, aluminum, semiconductors, electric vehicles, critical minerals, and solar cells. To play this card, investigations are required along with public comment, but once those rules are satisfied the executive office has a lot of flexibility.
All of these are strategies that the president could use. And — as he’s proven — he’ll fight anyone in court who challenges him, a process that could easily extend beyond his current administration.
It’s why Secretary Treasury Scott Bessent told CNBC in December that the Trump administration would be able to replicate tariffs even if it loses at the Supreme Court. As recently as Friday, Bessent said, “The overall tariffs, at the end of the day, will be unchanged.”
So what do to? The smartest small businesses aren’t waiting for Washington. They’re restructuring supply chains now. You can do the same.
Investigate bonded warehouses and free trade zones where you can bring your goods tariff-free and defer their impact until you ship product out of the warehouse, hopefully at a future time when rates are lower or there’s more clarity.
Use organizations like the World Trade Center Association and tools like the Make Onshoring Great Again portal to find alternate suppliers and products, both domestic and foreign.
Selectively pass down price increases based on individual customer profitability analysis, rather than broadly.
Lean into technology in an effort to increase the productivity of your workers in order to better control or even reduce overheads.
Try to do more assembly and manufacturing here in the U.S. All of these moves are what my smartest clients are doing in order to mitigate the uncertainty.
Can you expect a refund? Don’t hold your breath. Refunds need to come from the importer/exporter of record, which is generally the company that handled the transaction at the port. Most of these companies I know are not structured to apply for refunds on such a scale, even if there was a process in place (which there isn’t).
The Supreme Court has “remanded this back down to the lower courts to decide if refunds will be issued and without knowing for certain, many believe that the refunds will not be issued retroactively,” Lori Mullins of Rogers & Brown, a customs brokerage firm in Charleston, told CNBC on Friday. “For importers hoping for refunds the answer is yes, we have a ruling but we do not have a ruling on if any refunds will be granted. That will be handled by a lower court at a future date/time.”
The Trump administration is wiping their hands clean of orchestrating a tariff refund, saying, effectively that it’s not up to them, it’s up to the lower court. In his dissent, Justice Brett Kavanaugh noted the ruling lacked any refund guidance, and he stated that the refund process may be a “mess.”
Lawsuits already filed by larger corporations will take years to sort out. Smaller companies — lacking resources — will have a much bigger hill to climb, if that hill even exists. If you’re expecting a retroactive refund, you’re planning on a hope strategy — not a business strategy.
Whether you agree with the president’s tariff strategy or not is beside the point. What matters is this: Tariff policy has become a tool of both trade and politics.
That means volatility is now structural, not temporary. Which means the impact of tariffs on your small business isn’t going to change anytime soon.
Uncertainty? That much is certain.
