The Supreme Court delivered a significant decision on February 20, 2026, ruling that President Trump exceeded his authority when imposing tariffs on nearly every U.S. trading partner. The Court struck down the administration’s use of emergency powers under a decades-old law to impose more than $100 billion in tariffs. In anticipation of this ruling, the administration has been planning other potential ways of reprising these import taxes, including a new 15% global tariff that was announced by the President on February 21.
“This ruling creates both uncertainty and opportunity,” said Nick Uren, Senior Manager of International Tax at Aldrich CPAs + Advisors. “While the Court limited the administration’s use of emergency powers, officials have signaled they will rely on other statutory authorities to reimpose many import fees and have already begun by announcing a new global tariff. Business leaders should be assessing their historical tariff exposure, evaluating the possibility of refunds, and stress testing their forecasts. We should all be ready for a long, drawn-out legal process.”
Prior to the ruling, the administration acknowledged that an unfavorable decision could require unwinding certain trade deals and potentially issuing tens of billions of dollars in refunds. For business owners and executive teams, this is more than a legal headline. It is a development that may affect cash flow, pricing, supply chains, cross border tax strategy, and long-term planning.
Potential Refunds and Financial Impact
It remains unclear how refunds would be paid. For organizations that incurred substantial tariff costs, this introduces both opportunity and uncertainty. According to United States Secretary of the Treasury Scott Bessent, the refund process will be decided by the lower courts.
“While we wait for clarity regarding potential refunds, business owners should begin by quantifying their exposure, and getting ready for next steps,” said Uren. “If your company paid significant tariffs, you need to understand the potential refund impact, the related tax treatment, and how it would affect your financial statements and forecasts. This is not just a legal issue. It is a planning issue. You may need to apply for a refund on short notice, so if the refund is material, you should have a plan in place.”
Trade Policy Is Likely to Remain Fluid
While the Court limited the administration’s use of emergency powers, the White House has indicated it will rely on other statutory authorities to reimpose a 15% tariff for 150 days. Those efforts will likely face additional legal scrutiny.
This decision does not remove trade risk from the equation. It changes the legal pathway,” said Uren. “With multiple statutory options still available and likely to face continued legal scrutiny, businesses should expect policy movement and extended uncertainty. Leadership teams need to plan for variability, not assume stability, in their supply chains, pricing strategies, and financial forecasts.”
Among the available options:
- Section 232 of the Trade Expansion Act, which allows tariffs in the interest of national security but requires a Commerce Department investigation that may take up to 270 days
- Section 122 of the 1974 Trade Act, which permits a temporary global tariff of up to 15% for 150 days
- Section 301 of the 1974 Trade Act, which authorizes duties following an investigation into unfair trade practices
- Section 338 of the 1930 Trade Act, which may be used if other countries uniquely discriminate against the United States
Aldrich Insights: Practical Steps for Private Company Leaders
In periods of policy change, strong financial leadership matters. We recommend that business owners and executives consider the following next steps:
- Quantify Your Exposure and Model Scenarios: Review historical tariff payments and determine your total exposure by product line, vendor, and geography. Work with your advisors to model multiple trade and pricing scenarios into your forecasts and budgets. Stress testing margins and cash flow now can help prevent reactive decisions later.
- Review Refund Options and Be Ready to Apply for Refunds: Businesses should understand all their options and be ready to take action to apply for a refund on short notice. Weighing the cost and benefits of a protracted and complex refund procedure is necessary.
- Evaluate Supply Chain and Contract Risk: Assess supplier concentration, geographic risk, and contractual pricing flexibility. Review escalation clauses, cost pass-through provisions, and inventory valuation impacts. Private companies that understand their operational exposure will be better positioned to protect margins if trade policy shifts again.
- Align Tax Strategy and Financial Reporting: Evaluate the potential tax treatment of past tariff payments and any future refunds. Consider how changes in duties could affect transfer pricing, state and local tax obligations, and international structuring. Ensure your financial reporting and internal controls are prepared to address volatility in import costs.
Trade policy may continue to evolve, but disciplined planning and proactive analysis can position private companies to respond with clarity and confidence.
If you would like to discuss how this ruling may affect your organization, please contact Nick Uren.
