Supreme Court Rejects Legal Basis for “Emergency Tariffs”

Last week’s U.S. Supreme Court (SCOTUS) ruling marks an anticipated — but still significant — setback to the Trump administration’s reshaping of U.S. trade policy.

Over the past 18 months, U.S. tariff actions and retaliatory measures by trading partners have disrupted, increased volatility, and raised costs across cold chain–related trade. This decision introduces a new period of legal and commercial uncertainty.

Below is GCCA’s summary of the key developments and implications for the global cold chain.

Details of the Ruling

• SCOTUS did not invalidate specific tariffs directly. Instead, it ruled that the President lacks authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs unilaterally.

• The decision effectively removes the legal basis for three major tariff categories:

• • “Fentanyl-related” tariffs imposed on Mexico, Canada, and China beginning in March 2025
  • “Reciprocal tariffs” announced on “Liberation Day” (April 5, 2025) affecting a broad range of U.S. trading partners
  • Punitive tariffs targeting countries such as Brazil and India in response to unrelated political and geopolitical disputes

• As a result, an estimated $133–175 billion in tariff revenue is now legally uncertain and could be subject to refund claims, creating major compliance and pricing implications.

• Further litigation is likely. Lower courts will now address implementation and remedies, which may result in prolonged and complex legal proceedings. In anticipation, legal firms and financial companies have been preparing for class-action-style lawsuits to pursue refunds.

• The administration is expected to move quickly to establish new statutory authorities to preserve tariff leverage and maintain past and projected revenue to the US Treasury. The President has already announced a temporary 15% global tariff, expected to take effect within days, and signaled plans to pursue alternative legal pathways and commence new trade investigations. However, these plans need to be set out in more detail and come with significant legal uncertainty.

• It is also clear that further action by the administration will face political resistance in Congress, with broader implications for trade authority debates and other legislative priorities, including passage of a Farm Bill ahead of the midterm elections.

 

Cold Chain–Specific Implications

• Many food tariffs had already been partially mitigated:

• • Most meat, dairy, and seafood imports from Mexico and Canada were confirmed as exempt shortly after the initial tariffs were announced, because they are covered by the terms of the USMCA agreement.

• • In November, the administration unilaterally reduced or eliminated tariffs on several food products—including key proteins such as beef—as part of a broader effort to address food inflation.

• For many major trading partners, initial reciprocal tariffs have already been overtaken by negotiated agreements:

• • Bilateral arrangements have replaced initial reciprocal tariffs for several major cold chain trading partners, including the United Kingdom, the European Union, Japan, South Korea, Vietnam, Thailand, Indonesia, the Philippines, and others

• • Whilst it is presumed that these agreements will hold, there is still a grey area concerning the way they were negotiated, and there could be actions or recourse taken to change the agreements.

• • There is also likely to be implications for the calculus of other countries in upcoming or ongoing negotiations of multilateral (like USMCA) and bilateral agreements.

• If/when ‘reciprocal tariffs’ are reduced on imports from key markets, it is likely to lead to an increase in shipping activity as importers seek to get products into the country before other tariff actions are taken. This has been the experience in other windows of uncertainty in the past 18 months. Imports from major meat and seafood exporters to the US, such as Brazil, China, and East Asia, could see increased traffic.

Litigation and Refund Implications

• Refund-related actions will be undertaken on behalf of the importers who paid the tariffs. Cold chain logistics providers are unlikely to qualify directly but may be asked to support customer claims, particularly where they provide freight forwarding services.

• Importantly:

• • Refunds will not be automatic. Importers must follow formal procedures, including post-summary corrections, formal protests, or litigation before the Court of International Trade.

• • Eligibility will depend on detailed documentation tying tariff payments to specific import entries and demonstrating that no overlapping duty recovery mechanisms were used.

 

Note – The above is not to be deemed official legal advice. The U.S. tariff schedule and customs policies have gotten exponentially more complex. Always consult your customs expert/broker for compliance advice. GCCA and our advisers will continue to monitor and update members on developments and implications.