The U.S. Supreme Court recently heard arguments on whether the International Emergency Economic Powers Act gives the president authority to impose the tariffs President Trump has instituted in the past few months.
The Court’s ruling could have major implications for the auto industry, regardless of the outcome, said Adam Ratliff, a Warner partner and member of the firm’s Automotive Industry Group.
“If you have a sub-supplier or materials supplier in one of these countries that was hit with this massive tariff, these are hugely important tariffs,” Ratliff told the publication.
The Automotive News article explored possible outcomes of the hearing and offered suppliers guidance on preparing for the decision. If the Court strikes down Trump’s authority under the act, refunds may need to be issued for tariffs already paid — a process that could be highly complicated, said Homayune Ghaussi, a Warner partner and chair of the firm’s Supply Chain Industry Group.
“These refunds are going to be another difficult issue to tackle, whether by the court or by the administration,” Ghaussi told Automotive News.
A decision in favor of the White House could encourage the administration to pursue additional tariffs under the Act while continuing to collect Section 232 tariffs, Ratliff said.
It was not immediately clear after the nearly three-hour hearing how the justices might rule, as both sides faced tough questioning, he said. While oral arguments revealed some justices’ leanings and primary concerns, no clear majority emerged.
“It very much could go either way,” Ratliff told the publication. “It’s likely to be a split decision, and likely an unusual alignment from the Supreme Court.”
Because of the costly and complex nature of tariff refunds, the Supreme Court agreed to expedite a decision. The court is expected to rule before the end of the year, much sooner than usual, Ghaussi said.
Warner attorneys are actively working with manufacturers and businesses with supply chains on tariff mitigation strategies. “This is a chapter in the story,” Ratliff told Automotive News. “It’s not the end of the story.”
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