AssetMark: Unpacking the Latest Tariff Ruling

The U.S. Supreme Court recently ruled that the President cannot use broad emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs without Congress’s approval. The decision reinforces that broad tariff authority ultimately rests with lawmakers.

One of the most significant implications of the ruling is financial. Estimates per the Penn Wharton Budget Model suggest that as much as $175 billion in tariff collections could potentially be subject to refund claims. The timing and outcome of any refunds remain uncertain, but the potential refund size has drawn attention.

In response to the ruling, the administration has leaned on Section 122 of the Trade Act of 1974 as an alternative authority to impose tariffs. However, Section 122 allows only temporary tariffs for up to 150 days, after which Congressional approval is required to extend them.

Complicating matters further, the administration initially signaled an increase in the temporary tariff rate from 10% to 15%, but the final paperwork filed referenced only 10%. This discrepancy highlights ongoing confusion and shifting policy signals, which can add to market uncertainty.

In short, tariffs remain in play, but the legal pathway and duration are now more constrained and subject to greater scrutiny.

What does it mean for the U.S. economy? Continue Reading