Supreme Court blocks Trump tariffs as Newsom demands refunds that could total $175 billion
In a 6-3 ruling on Friday, the Supreme Court of the United States found that Donald Trump exceeded his authority by using emergency powers to impose sweeping “reciprocal” tariffs without congressional approval. The ruling said federal law does not grant the president unilateral authority to enact such broad trade measures, marking a significant check on executive power over tariffs.
Newsom calls tariffs an “illegal cash grab”
Gavin Newsom responded forcefully, demanding that billions collected under the tariffs be returned. “Time to pay the piper, Donald,” Newsom said in a statement. “These tariffs were nothing more than an illegal cash grab that drove up prices and hurt working families, so you could wreck longstanding alliances and extort them.”
Newsom has argued that California has been disproportionately harmed due to its central role in U.S. trade. The state accounts for roughly 14% of national GDP and, if it were a standalone country, would rank among the largest economies in the world.
California says tariffs hit its economy hardest
Newsom argued that families and businesses should not only be reimbursed but also receive interest on the funds collected. California, a major player in global trade, was among the states that sued to block the tariffs and has been at the forefront of legal challenges against Trump-era policies.
“Donald Trump should return that money immediately. He has an obligation,” California Gov. Gavin Newsom said on Friday. “$1,751 per family that were taxed by Donald Trump. He took hundreds of billions of dollars from working folks, from the ag community, from small businesses for this vanity play, this illegal action, and he finally was held to account. The rule of law won out.”
The lawsuit is part of a broader pattern of conflict between California and the Trump administration. State Attorney General Rob Bonta has filed frequent legal challenges on issues ranging from immigration to federal funding, highlighting ongoing tensions between state and federal leadership.
Democrats seek billions in refunds
Illinois Gov. JB Pritzker sent a letter to Trump calling for refunds to families in his state.
“Your tariff taxes wreaked havoc on farmers, enrage our allies, and sent grocery store prices through the roof,” Pritzker said in the letter. “On behalf of the people of Illinois, I demand a refund of $1,700 for every family in Illinois.”
The governor also sent an invoice billing that amount for more than 5.1 million Illinois families, totaling more than $8.6 billion. The invoice said it was “PAST DUE – DELINQUENT.”
When reached for comment, White House spokesman Kush Desai responded in part by saying if Pritzker “really cared about delivering economic relief for Illinois, he’d start with his own state government instead of chasing another stupid headline.”
New York’s Democratic governor, Kathy Hochul, called the Trump administration’s tariffs “an unlawful backdoor tax on hardworking families, farmers and small businesses, raising prices on everything from groceries to building materials”, though she did not demand refunds.
Trump signals new tariffs despite ruling
Following the decision, Trump moved forward with a new 10% global tariff and pursuing investigations that could justify additional import taxes. The response suggests the administration may seek alternative legal pathways to maintain tariff policies.
Refund uncertainty left to lower courts
While the Supreme Court deemed the tariffs illegal, it did not specify how refunds should be handled. That decision now falls to lower courts, creating uncertainty for businesses and the federal government alike.
An estimate from the Penn Wharton Budget Model for Reuters suggests the U.S. government could owe more than $175 billion in refunds to importers. The figure reflects tariffs collected under authorities that the court has now ruled were improperly used.
Lawsuits from importers already underway
Multiple importers have already filed lawsuits seeking reimbursement, citing earlier lower-court rulings that questioned the legality of the tariffs. These cases are expected to play a key role in determining how and when refunds are issued.
The tariffs were imposed under the International Emergency Economic Powers Act (IEEPA), a statute that had never before been used by a president to justify broad-based tariffs. The Supreme Court’s decision limits how that law can be applied in trade policy.
Dissent warns of economic and logistical fallout
Justice Brett Kavanaugh, in dissent, warned of the complications tied to unwinding the tariffs.
“In the meantime, however, the interim effects of the Court’s decision could be substantial,” Kavanaugh wrote in his dissent.
“The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others,” he wrote.
“As was acknowledged at oral argument, the refund process is likely to be a ‘mess,'” Kavanaugh wrote.
Billions already collected remain at stake
According to U.S. Customs and Border Protection, at least $133.5 billion in tariff revenue had been collected as of December, a figure that has likely increased since. With the court’s ruling leaving key questions unresolved, the final cost to the government; and the timeline for any repayments; remains uncertain.
When Trump was asked Friday if the government would now have to issue refunds, he said, “I guess it has to get litigated for the next two years.”
Treasury Secretary Scott Bessent said Friday it was “unlikely” Americans would receive tariff refunds.
“I got a feeling the American people won’t see it,” Bessent said, adding, “My sense is that could be dragged out for weeks, months, years.”
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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