Darian Woods (2:18)

And we'll get to what this means in the real world. But first, let's recap how we got here. So about a year ago, President Trump got up on the world stage, turned to all our trading partners and said, everybody is gonna get tariffed. You know, tariffs are gonna be whether you're a island with just penguins or if you're one of America's largest trading partners, everybody gets a tariff.

Adrian Ma (2:43)

Yes. And wow, there were so many tariffs. There were the universal tariffs he placed on basically all imported goods. There were the so called reciprocal tarif that he placed on specific countries. And of course, there were also the tit for tat tariff snafus that he got in with China, Mexico, and Canada. And the legal justifications the Trump administration gave for many of these tariffs was a statute called the International Emergency Economic Powers act, or ieepa.

Darian Woods (3:13)

So Ted Murphy says IAIPA basically has two parts to it.

Ted Murphy (3:17)

There's sort of part one which says the President is authorized to declare a national emergency.

Darian Woods (3:23)

In this case, Trump pointed to fentanyl imports and trade deficits and said, these are national emergencies.

Ted Murphy (3:30)

And then if you have a national emergency, then that unlocks certain powers.

Adrian Ma (3:36)

And these powers, according to the statute, included language about regulating and importation. And even though the word tariff doesn't appear in the statute, the government argued that the words regulate and importation and give it power to slap tariffs on the world. But then midway through last year, a couple of small businesses said, I don't think that's right. So they sued President Trump, and their cases wound up in front of the supreme court. And in yesterday's 63 decision, they ruled in favor of the businesses.

Darian Woods (4:07)

So what was the majority's reasoning? Ted broke it down for us.

Ted Murphy (4:11)

The Supreme Court didn't really get into whether or not there is a national emergency here, but instead, what they did was look at the powers. So assuming there's a national emergency, does the powers that IIPA provides the President include the power to impose these tariffs? And this is where the Court basically just said, no. You know, under our constitutional system, the power to impose tariffs is bestowed on Congress.

Sponsor/Ad Reader (4:40)

Right.

Ted Murphy (4:40)

So that's in the Constitution.

Adrian Ma (4:42)

Doesn't say anything about the President.

Ted Murphy (4:44)

Doesn't say anything about the president. And what it means is that if, if Congress is going to give away the power to impose tariffs to another branch of government, the executive branch, they need to do so explicitly.

Darian Woods (4:58)

Now, Ted says there are various statutes that explicitly delegate tariff authority to the President, but they purposely constrain this power, requiring certain procedures and limits to be followed by.

Ted Murphy (5:10)

Problem was, President Trump didn't want to have limits.

Adrian Ma (5:14)

Right.

Ted Murphy (5:14)

He wanted sort of unbounded ability.

Adrian Ma (5:16)

He wanted to play like tariff jazz.

Ted Murphy (5:19)

Exactly. They can be imposed, announced on Wednesday and go into effect on Saturday, or he can set them at one rate today and adjust the rate tomorrow without any process.

Adrian Ma (5:29)

Now, the administration argued that the President is allowed to do this under his AIPA emergency powers. But in the end, a majority of the Court said there is just no way that AIPA gives the President unilateral authority to impose tariffs with no limits.

Darian Woods (5:45)

Now, three justices did dissent. Among them, Justice Brett Kavanaugh who argued that what the Trump administration was doing was legal. He also expressed concern about the practical effects of the court's decision. Is the government going to refund billions of dollars it's collected? He said that would be a mess.

Adrian Ma (6:04)

And this gets us back to the question we asked earlier. What real world effects should we expect to happen next? Well, for one thing, Ted says don't expect tariffs to just disappear. While the President can't impose tariffs under IEEPA anymore, there are other statutes he could rely on.

Ted Murphy (6:22)

I think people will be paying the same tariffs just under a different legal umbrella.

Darian Woods (6:27)

Yeah. On Friday afternoon, Trump announced his Plan B.

President Donald Trump (6:32)

Today, I will sign an order to impose a 10% global tariff under section 122, over and above our normal tariffs already being charged.

Adrian Ma (6:41)

Section122, by the way, is one of the statutes that Ted mentioned earlier, which give the President limited power over tariffs, rather than the sort of carte blanche approach that he took under ieepa. So for now, it looks like there are other statutes the President will try to use, but that does not mean that the government is suddenly off the hook for the more than $100 billion worth of IIPA tariffs it's already collected.

Darian Woods (7:05)

Ted says his clients will certainly be interested to know whether they can get refunded for the tariffs already paid.

Adrian Ma (7:11)

So how would the refund process work?

Ted Murphy (7:14)

That's a really good question. You know, the short answer is, yeah, we don't know. And nobody knows.

Adrian Ma (7:20)

Nobody knows. Including, apparently, the President. When a reporter asked Trump whether the government has to issue refunds, this is how he responded.

President Donald Trump (7:28)

Wouldn't you think they would have put one sentence in there saying that keep the money or don't keep the money? Right. I guess it has to get litigated for the next two years.

Adrian Ma (7:38)

Still, you could bet a lot of business owners wouldn't pass up the chance to get their money back if they could.

Daniel Harberger (7:42)

I hadn't even thought about that. But if there's a refund available, I would love. I would love to have that go back into the company.

Darian Woods (7:49)

Daniel Harberger is founder of woof, a pet products company. We spoke to him just under a year ago, just as Trump's tariff spree was really ramping up. He says the hundreds of thousands of dollars his company has spent on paying tariffs, he would rather have spent it

Daniel Harberger (8:05)

on the company hiring new people, you know, building new distribution channels, inventing new products. I mean, that's where I want to be spending our attention, and I don't want to be spending our attention on tariffs.

Adrian Ma (8:15)

We also asked Daniel if his company did somehow manage to get a refund, would he pass those savings on to Custom? He said, possibly.

Daniel Harberger (8:24)

And I don't want to commit too early to something and all of a sudden find ourselves surprised down the line. But yeah, I would love for that to be possible. I think that would be really, really great.

Darian Woods (8:33)

At the same time, Daniel says he's gotta be cautious. While he's excited about today's news, he's also nervous about more uncertainty to come.

Adrian Ma (8:44)

This episode was produced by Corey Bridges and engineered by Jimmy Keighley. It was fact checked by Vito Emanuel. Katkin Cannon is our editor and the indicators of production of npr.

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