The U.S. Supreme Court’s much-anticipated Feb. 20 decision deemed tariffs imposed under the International Emergency Economic Powers Act (IEEPA) unconstitutional. Automotive News recently reported on the ruling and its significant ramifications for automakers and their suppliers.
The court ruled 6–3 that the president lacked the authority to issue tariffs under IEEPA. The decision also sets the stage for potential refunds of IEEPA tariffs paid over the past year. The majority opinion was silent on whether refunds are required or what procedures might govern them.
Justice Brett Kavanaugh, in a lengthy dissent arguing that Trump did not overstep his authority, said the refund process is likely to be messy.
“The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers,” Kavanaugh wrote. “But that process is likely to be a ‘mess,’ as was acknowledged at oral argument.”
Suppliers expecting a quick refund process for tariffs they’ve paid under the emergency powers law are likely to be disappointed, said Adam Ratliff, a partner at law firm Warner Norcross + Judd and member of its Automotive Industry Group.
“I don’t think that sitting back and hoping or waiting that a refund will come to you is going to be a viable strategy,” Ratliff said.
Automotive News subscribers can read the full story here.
The court’s opinion is likely a boon and a relief to most suppliers. But this story is far from over. The extent to which refunds will be available, the process of obtaining them and the timing of that process are all still open questions. Warner will continue to track developments and is standing by to assist clients in pursuing these claims.
