WASHINGTON — A recent U.S. Supreme Court decision striking down the Trump administration’s use of emergency powers to impose sweeping tariffs has introduced new uncertainty for wholesalers, distributors and import-dependent businesses, including those serving the self-service laundry industry.
During a National Association of Wholesaler-Distributors (NAW) webinar shared with members of the Textile Care Allied Trades Association (TCATA), policy experts and legal advisers outlined what the ruling means for businesses navigating tariffs, refunds, and possible new trade actions.
(Editor’s note: This webinar took place prior to the start of the Iran war.)
The Feb. 20 decision, issued in Learning Resources Inc. v. Trump, ruled 6-3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs — an authority the Constitution reserves for Congress.
The decision invalidated tariffs imposed under the emergency statute and triggered a wave of questions about refund eligibility, future tariff mechanisms, and the administration’s next steps.
“This is a hot topic,” says Brian Wild, chief government relations officer for NAW, who opened the webinar discussion. “It’s literally the thing that we talk about all the time.”
CLARIFYING LIMITS OF PRESIDENTIAL AUTHORITY
Edward “Eddy” Hayes, partner at Louisiana law firm Leake Andersson and an international trade specialist, explained that the Supreme Court’s ruling centered on constitutional limits governing tariff authority.
“The opinion explicitly says that the IEEPA statute does not authorize the use of tariffs,” Hayes says. “Congress obviously under Article I has the exclusive authority to deal with tariffs and to raise funds for the federal government.”
According to Hayes, the court also relied on the “major questions doctrine,” determining that any delegation of tariff authority from Congress to the executive branch must be explicit.
The decision effectively halted tariff collections under IEEPA, but it did not address how previously collected duties — estimated at roughly $134 billion — should now be handled.
“What the case doesn’t address is remedies,” Hayes says. “There’s no instruction about whether courts have to issue refunds or how that process may take place.”
That question will now be handled by lower courts, particularly the U.S. Court of International Trade, which oversees customs and tariff disputes.
REFUND QUESTIONS LOOM FOR IMPORTERS
The potential refund process is already generating significant interest among importers and supply-chain participants.
Hayes notes that only the importer of record is technically entitled to receive tariff refunds from Customs and Border Protection, though businesses further down the supply chain may attempt to claim reimbursement through contractual agreements or legal action.
“Only the importer of record is entitled to the refund,” Hayes says. “But others in the supply chain may argue that they ultimately paid the tariff through pricing structures.”
The logistics of refunding tens of billions of dollars could prove complicated.
“It’s such a large amount of money,” he says. “I would suspect that we might see a special master or something like that get appointed to handle the logistics.”
Businesses have a two-year window to file lawsuits seeking reimbursement, and Hayes says many companies are filing claims simply to preserve their rights.
ADMINISTRATION LOOKS FOR NEW TARIFF TOOLS
Even as the courts sort out refunds, the administration is exploring other legal mechanisms to maintain tariffs.
Alex Hendrie, NAW vice president of government relations, says policymakers are already navigating the political fallout from the ruling.
“In the wake of this, there’s a lot of confusion,” he says. “We’re very much in election season and this has now both become a legal issue and a political issue.”
One immediate move has been the use of Section 122 tariffs, which allow the president to impose duties of up to 15% for 150 days to address balance-of-payments issues.
The administration has implemented a 10% tariff under that authority while exploring longer-term strategies.
“Right now, they’re collecting 10% duties,” Hayes explains. “Congress can extend the period, but it would have to vote on that.”
Another likely path is expanded use of Section 301 tariffs, which target unfair trade practices and have historically been used against specific countries.
Hayes says those actions require investigations, and public comment periods and hearings, which could make them slower to implement but legally more durable.
“The 301s would be more concerning to me,” he says. “Those are country-based and can tackle the trade practices of an entire country at one time.”
POTENTIAL RIPPLE EFFECTS
For industries that rely heavily on imported components and equipment — including sectors tied to laundry operations — the evolving tariff environment could have broad implications.
Businesses should closely monitor developments related to trade policy and potential new tariff investigations, says Hendrie. “Businesses should be aware of what’s happening in Washington and what the administration and Congress are considering.”
Hayes also advises companies to maintain detailed customs records and coordinate with brokers to ensure documentation is available if refund claims move forward.
“Make sure you have your brokers preserving all customs records and entries during the time period of IEEPA,” he says.
UNCERTAINTY LIKELY TO CONTINUE
Despite the clarity offered by the Supreme Court on presidential authority, the broader trade environment remains unsettled.
New tariff investigations, potential congressional action, and ongoing litigation over refunds are likely to keep the issue at the forefront for importers and distributors.
For now, industry groups are urging businesses to stay engaged and track policy developments closely.
As Wild noted during the webinar, the stakes extend across the entire distribution economy.
“We’re trying to get the business community to act in lockstep as much as we can,” he says. “This is a political moment and an opportunity for the business community to respond together.”
Have a question or comment? E-mail our editor Dave Davis at [email protected].
