The Port of Los Angeles is a major gateway to the U.S. for cargo coming from Asia. But imports from China have dropped this year in response to President Trump’s tariffs.
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Mario Tama/Getty Images
The Supreme Court ruled Friday that President Trump overstepped his authority when he ordered tariffs on imports from nearly every country in the world, using a 1970s emergency statute.
Here are seven things to know about what’s at stake.
Tariffs are raising a lot of money — but not as much as Trump claims
The federal government has been collecting about $30 billion in tariffs every month — or about four times as much as it took in before Trump returned to the White House.
Trump has raised tariff rates to their highest level in nearly a century, but import taxes are still a small share of overall government revenue — just over 5% in January.
The tariff bill would be higher were it not for exemptions granted to certain imports such as coffee and bananas. Importers have also tried to cut their tariff costs by shifting production to countries where the administration has ordered a lower tariff rate.
In 2024, for example, 12% of U.S. imports came from China. By September of last year, that had fallen to about 8%.
Most of the cost of tariffs is being paid by U.S. businesses and, in some cases, their customers
A working paper from Harvard University professor and former International Monetary Fund economist Gita Gopinath and Brent Neiman of the University of Chicago estimates that nearly all the cost of Trump’s tariffs are being paid by U.S. importers, not foreign suppliers as Trump has claimed.
In some cases, importers have absorbed that cost, settling for lower profits. In others, they’ve passed the additional cost on to customers in the form of higher prices.
President Trump holds up a copy of the 2025 National Trade Estimate Report as he speaks during an April 2, 2025, event at the White House’s Rose Garden, where he first unveiled his tariffs.
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Chip Somodevilla/Getty Images
The tariffs at issue in the Supreme Court case represent about half the total tariff bill
Since returning to the White House, Trump has raised a wide variety of tariffs. Not all of those tax increases were challenged at the Supreme Court. The tariffs at stake in the court case were those issued under the authority of the International Emergency Economic Powers Act (IEEPA), a 1970s statute that never uses the word “tariff.”
IEEPA tariffs represent about half of all the import taxes the government is collecting each month. Other tariffs were issued under different statutes that are not being challenged.
Refunds would be messy, but manageable
There were a lot of questions during the Supreme Court’s oral arguments about how the government might refund money to importers, if the contested tariffs were found to be illegal.
“It seems to me like it could be a mess,” said Justice Amy Coney Barrett.
But veteran tariff lawyer Robert Leo says that while the process would be cumbersome, it’s not impossible.
Tariff bills are computerized, and it would be relatively straightforward to identify which payments would be eligible for refunds.
In addition, the customs agency has said it has prepared to waive deadlines that would otherwise make importers ineligible for refunds after a certain period of time.
The administration has other ways to impose tariffs, but those alternatives are more limited
Trump has relied on IEEPA to order many of his tariffs, even though that law doesn’t explicitly authorize the president to levy taxes.
The administration has promised to replace the outlawed tariffs using other laws where the president’s authority is clearer.
Those other statutes come with more strings attached, though.
Hours after the Supreme Court decision, Trump said he planned to impose a worldwide tariff of 10% using Section 122 of the Trade Act of 1974, which is designed to address trade deficits. But under that statute, those taxes can be imposed for only 150 days.
Likewise, Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 allow the president to impose tariffs, but only after a fact-finding by the U.S. trade representative and the Commerce Department, respectively.
Trump relied heavily on Section 232 and Section 301 tariffs during his first term in the White House, but those measures would not allow, for example, a 50% tax on imports from Brazil — a country with which the U.S. has a trade surplus — which the president imposed over his frustration with the prosecution of former President Jair Bolsonaro in July.
Political pressure around affordability might lead the White House to tread lightly, or not
The president knows his economic approval ratings are underwater, and the administration has tacitly conceded that tariffs aren’t helping.
For example, the White House has rolled back or delayed import taxes on things like coffee, bananas and upholstered furniture to avoid further antagonizing voters who are already unhappy with the high cost of living.
That might lead the administration to slow-walk any new import taxes. But Trump is a true believer when it comes to using tariffs as a negotiating tactic.
“The president has to be able to wheel and deal with tariffs,” Trump told House Republicans in January.
Trump gives a speech at the World Economic Forum in Davos, Switzerland, on Jan. 21. He spoke about a range of issues, including affordability in the U.S. and his interest in acquiring Greenland.
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There are no signs that Trump’s tariffs have sparked a revival of domestic manufacturing
Trump promised that imposing the highest tariffs since the Great Depression would spark a renaissance in U.S. manufacturing. But factories have been in a slump for most of the last year, shedding 108,000 jobs in 2025.
No doubt Trump’s taxes on foreign imports have allowed some U.S. factories to raise their prices. But the vast majority of factory managers, many of whom rely on foreign components, say tariffs have been a drag on their business.
“Morale is very low across manufacturing in general,” one unnamed factory manager told the Institute for Supply Management in December.
“The cost of living is very high, and component costs are increasing with folks citing tariffs and other price increases,” the manager added. “It’s cold in our area of the country, absenteeism is worse around the holidays, and sales were lower than we expected for November. So, things look a bit bleak overall.”
