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Struck down by the U.S.
Supreme Court, President Trump's tariffs exceeded his authority.
Hello, it's World Business Express from the BBC World Service.
I'm Sarah Rogers.
So does that mean refunds for those who've paid up?
And what happens next?
OK, so over a turbulent year, the American president used emergency powers to launch what's been called a trade war against much of the rest of the world.
And today, U.S.
Supreme Court ruling says Donald Trump exceeded his authority on some of those tariffs, those trade tariffs that he imposed.
With me today is Michelle Fleury, our New York business correspondent.
Michelle, so how did we get here?
Well, it all goes back to April, that Liberation Day ceremony, if you want to call it that, that took place in the Rose Garden in Washington, when President Trump unveiled reciprocal tariffs.
In other words, these tariffs on many countries around the world of a baseline of around 10%.
What we've got today is an opinion from the Supreme Court that basically says he didn't have the authority to do that.
Not only that, but there was separately some additional tariffs of around 25 imposed on Canada and Mexico and China for fentanyl, which he said was flooding the United States from these countries.
That also has been challenged and found that he didn't have the authority to do that.
So all of this is now being struck down.
And the question, of course, is what comes next?
A huge amount of revenue has been raised.
Will that now go back to some of these businesses?
Has there been any reaction from President Trump?
Not yet.
No doubt we will be sort of waiting and watching to hear from him.
But certainly, if you look at comments that his administration have made kind of in the build up to today, people like Howard Lutnick, his Commerce Secretary, Jameson Greer, the trade representative, they have said, look, we have other tools at our disposal, other forms of tariffs.
So while the president's power has been severely limited today by this opinion from the Supreme Court, it doesn't mean that he can't still put tariffs on specific industries sectoral tariffs.
You know, they come under a kind of litany of numbers like 301, 232.
But if you think of things like steel tariffs or tariffs on pharmaceutical goods, that the administration still has the authority to do,
And I suspect we may see a lot more of that kind of tariffs.
Yeah, Michelle, stay with us.
We'll come back to that shortly.
But I want to bring in a business who's been impacted by all this.
We've got Beth Benicki, who's the owner of Busy Baby Products in Minnesota.
You've been impacted by this.
We've spoken to you on our programs across the BBC before.
What is your reaction, Beth?
Oh, my gosh.
I feel like a thousand pound weight has been lifted off my chest.
How, just take me back a little bit, how did this impact your business?
It's been devastating, to be honest.
My products are all manufactured in China.
I make a line of products that stop babies from dropping and throwing their things on the floor.
And they're made out of silicone, which we don't have in the U.S.
And all of the best manufacturing for silicone products is in China.
So that's where I've been manufacturing.
And I had two containers worth of product ready to ship two days after the Liberation Day tariffs were announced.
So I was forced to abandon my products in China for eight weeks, which led to an out of stock situation with loss of revenue.
I had to cash in my retirement.
I had to let employees go.
I have not been able to plan anything for my business.
I've lost a retail relationship with Target.
So it's been a really, really rough year.
And the uncertainty has just been really, really heavy for me.
So I feel a little bit of a weight lifted.
But as you guys mentioned, there is other ways for the president to impose tariffs.
But at least today I feel relief and I feel like there are still some checks and balances in our government, like they're supposed to be.
We see that with the Supreme Court, you know, making that decision today.
Yeah, you feel that sense of, I can hear it in your voice, reprieve, relief.
But you mentioned there that you kind of lost a huge collaboration with another major corporation.
How much have the tariffs cost you?
Oh, if I had to add up the potential revenue lost and the revenue lost while we were out of stock because of the tariffs, it's probably close to a million dollars in revenue.
And how much of your business is that?
Can you take that kind of a hit?
No, no, it's it's I mean, I cashed in my retirement.
I didn't pay myself all summer.
I went through my family's savings.
I had to let my it's no, we were just hanging on by a thread right now.
The silver lining to all of it is we have begun to expand our business internationally because we couldn't bring the products into the US.
So that's that's been a silver lining.
And hopefully we'll be able to continue to grow internationally.
And I think I know the answer to this, Beth, but do you want to refund?
Of course.
Yes.
The tricky part now is, you know, I don't have a team of lawyers guiding me on processes and procedures.
There's going to be hundreds of thousands of us seeking refunds.
The office is going to be slammed.
I don't know how that's going to work and I'm definitely not counting on it anytime soon.
But yes, I just paid another $13,000 in tariff last week.
And, you know, hope to get that back at some point.
Thanks so much for speaking to us, Beth Benicki, the owner of Busy Baby Products in Minnesota.
Back to Michelle Fleury quickly.
I know you've got to go.
You cross all our business output.
What happens next, Michelle, if you know, if anyone knows?
I mean yeah, I think, as you were just hearing from the business, hopefully there's relief on the way.
Look, as of mid-December, roughly $130 billion had been collected in these emergency tariffs.
A lot of that now comes back here to New York to the international market trade court which will ultimately decide sort of how some of that money gets funneled back.
There are lawsuits not just from small companies who are trying to sort of claim back money, but also big players like the retailer Costco.
That's the process that comes next.
It's unclear though you know how long that will take.
Thank you, Michelle Fleury, our New York business correspondent.
Now, let me bring in another guest, Diane Swonk, who's the chief economist of KPMG US.
We heard from Beth there.
What's this going to mean for other businesses?
Just more confusion?
Yeah.
Unfortunately, I'd say curb your enthusiasm, although I understand the desire for relief.
The reality is that the administration has been anticipating this and has warned, as Michelle pointed out, that they will pull other levers to quickly reinstate any tariffs ruled illegal.
Moreover, the Supreme Court itself actually noted in their brief that the logistics of refunds are a mess and there will be very difficult to prove and be able to provide all the paperwork and the time involved.
It means that really small and mid-sized businesses are not likely to see refunds.
The refunds will take a lot of time, and those that do get it will be the ones that can literally dot all their I's and cross all their T's on the paperwork needed for that.
And I think that's very important.
The other important issue is that any tariffs that the administration uses in terms of other levers to pull could be harder to reverse later on.
So there's an undercurrent to this that they're going to be using more statutory tariffs with investigations that over time could be harder to lift after they get implemented.
And this money of course painful for businesses, but briefly, gave a massive boost to the US economy, or a decent boost at least.
Is this just going to reverse all that?
Well, the tariff revenues were large and this is more than half of the tariff revenues that are covered by this ruling.
The deficits are still very large and will easily eclipse the size of the US economy today in 2026.
All right, Diane.
Sorry, we're going to have to leave it there.
Chief Economist of KPMG US.
We'll have more later on the World Business Report.
And we've got our live page running with the latest updates.
But that's it from World Business Express with me, Sarah Rogers.
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