What a Supreme Court tariff ruling may mean for your money
Supreme Court in Washington, January 27, 2026.
Take Drago | Bloomberg | Getty Images
The Supreme Court could decide the fate of President Donald Trump’s tariff agenda on Friday, and the decision will have implications for consumers’ wallets, economists say.
If the high court rules that certain tariffs are unconstitutional, it could provide fiscal relief for consumers, who bear the cost of those import duties at least partially through higher prices, economists said.
The tariffs in question are the tariffs applied in accordance with the International Emergency Economic Powers Act of 1977.
The Trump administration has used IEEPA as a legal way to impose tariffs on a broad range of trading partners and raise tariffs on imports to their highest level since the early 20th century. no president had used it before law imposing tariffs.
Cost of tariffs to consumers and potential savings
Tariffs are a tax on imports. These taxes are largely paid by the U.S. entity that imports the product, not by foreign exporters, economists said.
According to John Ricco, associate director of policy analysis at Yale University Budget Lab, the U.S. currently has an average effective tariff rate of 16.9%; This rate is the highest since 1932.
An article published last week A study by researchers at the Federal Reserve Bank of New York said U.S. firms and consumers will bear the “majority” (about 90%) of the economic burden of tariffs imposed in 2025. White House officials disputed that finding.
According to economists and various economic analyses, businesses generally pass on at least some of their costs to consumers.
Tariffs affected everything from furniture to clothing, food, electronics and cars more expensiveAccording to the Yale Budget Lab.
Tax Foundation identifies Trump’s tariffs It will cost every US household $1,000 in 2025and will cost each household $1,300 by 2026.
The Yale Budget Lab reached a similar conclusion: At the current tariff rate, the average consumer would pay an additional $1,300 to $1,700 in 2026 compared to what they would pay pre-2025, Ricco said.
If the court strikes down IEEPA tariffs as unconstitutional, that burden would drop by about half in 2026, to around $600 to $800, Ricco said.
A majority of the Supreme Court justices were skeptical about the legality of IEEPA tariffs during oral arguments in November.
Without those tariffs, the effective tariff rate would have fallen to about 9%, much higher than the roughly 2% rate before Trump began his second term, Ricco said.
Economists said the consumer burden did not drop to zero because the Trump administration had other tariffs based on different authorities and more solid legal ground.
The Trump administration has said it will use these avenues to impose new tariffs and get to the “same place” if the Supreme Court strikes down the IEEPA tariffs.
“Even assuming IEEPA is ruled to be used unconstitutionally, that wouldn’t change much,” said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics and a former Treasury Department official who focuses on international trade. “The president will come in and use other laws for pretty much the same tariffs.”
The Tax Policy Center estimates that household taxes will be levied if the Supreme Court rules against the IEEPA tariffs and those tariffs are not changed $1.4 trillion will decrease in 10 yearsSaved families an average of $1,200 in 2026.
How did Trump use IEEPA tariffs?
Trump has It invoked emergency powers under the IEEPA to impose a broad swath of the tariff regime.
U.S. Customs and Border Protection collected approximately $133.5 billion in tariff revenue under IEEPA in fiscal year 2025 and fiscal year 2026 through Dec. 14. Cato Institute analysis of federal data. This amounts to approximately 60% of the total tariff revenue collected during that period.
Trump used IEEPA to: Apply a basic tariff of 10% On so-called liberation day in April 2025, he imposed tariffs on all of the United States’ trading partners and imposed even higher “reciprocal” tariffs on dozens of countries to narrow the trade deficit.
Since Inauguration Day, it has also invoked IEEPA to impose tariffs on Canada, China and Mexico, the United States’ largest trading partners, for allegedly failing to prevent fentanyl trafficking.
Since the beginning of his second term I also applied to the law Suspend the “de minimis” rule that exempts imports under $800 from tariffs and impose taxes on countries such as India, which imports Russian oil, and Brazil, for the prosecution of former President Jair Bolsonaro, according to a January analysis by the Congressional Research Service.
Other Trump tariffs on the books
However, the Peterson Institute’s Hufbauer said the Trump administration has other laws it uses to impose tariffs and could make stronger use of those laws if the Supreme Court strikes down the IEEPA tariffs.
He said this would “take away some of the relief” for consumers.
Hufbauer said one of the “easiest” authorities available is Section 232 of the Trade Expansion Act of 1962.
In fact, Trump has already used Section 232 to impose tariffs on a number of products, including steel, aluminum, autos and auto parts, copper, trucks, and wood products.
“We believe the White House could use a wide range of other laws to recreate some of the existing tariffs…within days if IEEPA is repealed,” according to a January research note by Chris Krueger, a strategist at TD Cowen’s Washington Research Group.
Commercial and consumer refunds?
It’s unclear to what extent businesses and consumers may receive refunds after the Supreme Court decision.
Moody’s chief economist Mark Zandi said he thinks there’s a “better than equal chance” that affected businesses will receive some form of compensation from the federal government if the Supreme Court strikes down the IEEPA tariffs.
“If the Supreme Court remains silent on this issue and the Administration does not pay compensation, significant legal cases will likely be filed by businesses that the Court will have to decide,” he wrote in an email.
Trump also floated the idea of sending Americans away. Tariff “dividend” checks for $2,000 from income earned.
But Zandi said it’s unlikely the government will send checks to consumers regardless of the Supreme Court’s outcome, except perhaps in the event of a short-term recession.
“This would require legislation, and I don’t think Congress would approve it, even with consensus,” Zandi said. he said.
