HOUSTON – After Friday’s Supreme Court ruling striking down certain tariffs, many families are asking a simple question, does this mean prices will finally go down?
The answer is not that simple.
A tariff is essentially a tax on goods coming into the country. When companies import products like car parts, electronics, lumber or steel, they pay a tax at the border. Businesses often pass those costs along, meaning shoppers can end up paying more at the store.
Houston’s Scott L. Johnston, an attorney with Givens & Johnston PLLC in Houston who focuses on customs and international trade law, says many Americans may not have realized they were paying those costs.
“[It’s] a very significant type of taxation that the public has been paying without being aware of it. That’s about to go away, but that’s not the end of the picture,” Johnston adds. “It’s already been a detriment to the consumer because we’re ultimately bearing the load of these taxes imposed on all the goods we purchase.”
Will companies get refunds?
The Supreme Court ruled that certain tariffs imposed under emergency powers were not legally authorized, but the decision did not clearly lay out how refunds should work.
Johnston tells KPRC 2 News that part is still unsettled.
“There are a mix of judicial and administrative processes that need to be sorted out,” he says.
When businesses import goods, it can take more than 10 months for the federal government to finalize what is owed. If a company believes it paid tariffs that were not legally authorized, it generally has about six months after that review to formally challenge U.S. Customs and Border Protection.
If Customs denies the challenge, the company has another 180 days to file a lawsuit in the U.S. Court of International Trade.
“How refunds are going to work now with respect to this Supreme Court decision, that’s to be resolved in some messy protracted litigation that is already underway,” Johnston tells us.
In other words, companies do not automatically receive refund checks.
What happens next?
Even stopping the collection of these tariffs may not happen overnight.
Johnston says Customs cannot simply “push a button” to turn them off. The process requires internal steps and approvals.
If refunds are ultimately ordered, the potential cost could be significant.
When asked about the possible scale of refunds Johnston said it’s in the billions.
“It’s been a huge burden on the consumer and now the public treasury will have to make good on paying the refunds and that’s going to cause some bureaucratic problems I expect for the Treasury.” Johnston adds.
He says, “These refunds are so massive that they will be a significant hit on the Treasury, at least in the near term.”
Because of that, he expects legal fights over refunds to continue for some time.
For families watching closely, that means any impact on household budgets, if it comes, will likely take some time.
The bottom line is the Supreme Court’s ruling is significant, but price changes at the store are unlikely to happen immediately.