False joy? U.S. Supreme Court rejects emergency tariffs, but retailers say: Don’t expect prices to drop

The U.S. Supreme Court's rejection of the White House's emergency tariff ruling may bring a legal victory for businesses, but due to complex refund procedures and the emergence of new tariff policies, consumers hoping for price drops are likely to be disappointed.

According to Reuters, companies widely plan to use potential tariff refunds to offset previously high operating costs rather than lowering retail prices. Meanwhile, U.S. President Trump has announced new temporary tariffs, further dampening market expectations for easing inflationary pressure.

The direct impact of this situation on investors and the market is that the overall effective tariff rate in the U.S. will rebound quickly after a brief decline, and businesses and consumers will continue to bear the brunt of tariff costs. Since retailers are refusing to adjust pricing strategies, hopes for a revival in consumer spending have been dashed.

In addition, the Supreme Court's ruling did not clarify how the government should refund the approximately $175 billion in tariffs already collected. Importers face a lengthy and bureaucratic refund process, further eliminating the possibility of passing on benefits to consumers in the short term.

Lengthy Refund Process, No Intention to Pass on Savings

Last week's Supreme Court ruling was a major victory for more than 1,000 companies, including wholesaler Costco and tire manufacturer Goodyear Tire & Rubber. These companies sued the government, accusing Trump of lacking the legal authority, based on the 1977 International Emergency Economic Powers Act, to levy tariffs. However, the lack of a refund mechanism has left importers and lawyers entangled in a complex bureaucratic process.

Interviewed business owners made clear they have no plans to cut prices. Eva St. Clair, co-founder of clothing company Princess Awesome, remarked, the company had absorbed almost all tariff costs previously, so there is no reason to offer price compensation. The company paid $30,000 in tariffs and raised $8,000 through a customer tip jar to stay afloat.

Nebraska-based Spreetail sells items like Razor scooters on Amazon; its CEO Josh Ketter said the company has "no plans to cut prices." He added that even if they eventually get a refund, it would be only partial compensation for last year's losses. Spreetail paid about $50 million in tariffs in 2025, and Ketter estimates the refund process could take years. Huntar CEO Jason Cheung also doubts prices will go down but said he might increase customer discounts to boost sales.

New Tariffs Take Over, Overall Tariff Rate Stays High

According to CCTV News, in response to the Supreme Court's ruling, Trump quickly imposed a temporary 10% tariff on all U.S. imports from every country, threatening to raise it to 15%. This move is based on a 1974 law that requires Congressional approval after 150 days to extend the tariff period, which could trigger further legal challenges.

The new tariffs fill the gap left by the removal of the old tariffs, keeping the tariff burden heavy. According to Yale Budget Lab, before the emergency tariffs were overturned, U.S. consumers faced an overall average effective tariff rate of 16%, the highest since 1936. After the ruling, the rate briefly dropped to 9.1%, but with the 15% global tariff taking effect Tuesday, it will rise again to 13.7%.

Joshua Bailey, Chief Economist for North America and Global Economic at the Economist Intelligence Unit, said the overall effective tariff has not dropped significantly from last week, and since businesses are unwilling to reverse previous price hikes, the ruling is unlikely to provide much relief to households. In response to the new policy, Princess Awesome’s St. Clair said she will adjust purchasing arrangements to ensure goods enter the U.S. only after 150 days.

Cost-Shifting Brings Double Pressure: Economic and Psychological

Dramatic swings in tariff policy have already had substantial impacts on the U.S. consumer market. A New York Federal Reserve Bank study on February 12 concluded that U.S. consumers and businesses have borne about 90% of tariff costs. These tariffs, implemented through a series of executive orders, have pushed up prices and caused a decline in U.S. consumer confidence.

High prices and ongoing tariff uncertainty have also directly affected public sentiment. According to a Reuters/Ipsos poll, anger over tariffs has worsened Americans' views on Trump’s handling of economic issues. As of mid-February, his approval rating on this issue dropped to 34%, far lower than in his first term.

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