The Supreme Court Ruled Trump's Tariffs Unlawful

On February 20, 2026, the U.S. Supreme Court ruled that President Trump's use of the International Emergency Economic Powers Act to impose sweeping tariffs was unlawful.

The decision triggered an estimated $166 billion in refund obligations to U.S. importers — according to Bloomberg Law — and set off one of the largest legal pile-ons in recent trade history.

Nearly 3,000 Lawsuits and Counting

According to a Bloomberg News review of publicly available records, nearly 1,000 new tariff refund cases were filed in U.S. trade court since March 1 alone. That's roughly a third of the more than 3,000 total tariff lawsuits filed over the past year.

The plaintiffs aren't small players. Insurance Journal reports the list now includes the companies behind Versace, Adidas, motorcycle maker Ducati North America, shipping giant DHL Express, and three airlines — Alaska Airlines, Hawaiian Airlines, and Horizon Air.

Why sue if the government is supposedly building a refund portal? Companies want legal protection in case the process fails. "It all boils down to uncertainty," said Michael Roll, a partner at Roll & Harris, who told Insurance Journal he's filed more than a dozen tariff lawsuits in the last week alone. If the government's claims system breaks down or disputes a specific company's situation, being on record in court provides leverage.

Customs and Border Protection told Judge Richard Eaton of the U.S. Court of International Trade — who is presiding over all the tariff cases — that rebuilding the refund calculation system would be "nearly impossible" under the current infrastructure. They asked for a delay and are building a web portal. As of March 12, that portal was reportedly 70% complete, according to Insurance Journal.

A $286 Million Fraud Claim Emerges

While importers are lining up to get tariff money back from the government, the feds are simultaneously chasing down companies that allegedly cheated on tariffs they were supposed to pay.

Bloomberg Law reports that First Brands, a bankrupt auto-parts manufacturer, has been hit with a $285.5 million federal claim — including penalties — for allegedly underpaying tariffs on parts imported from China. The claim has not been previously reported.

The company is already drowning in $11.8 billion in debts it cannot fully repay. The U.S. government is now showing up in bankruptcy court as a creditor, claiming First Brands gamed the system while legitimate importers overpaid.

The tariff refund story involves both overpayments and enforcement. The government is simultaneously running a fraud operation against companies that allegedly underpaid, while processing refunds to those who overpaid.

Consumers Face Refund Limits

Ordinary consumers paid higher prices when tariffs were passed through to retail prices. But under the law, only importers of record can apply for refunds — and those are almost exclusively businesses, according to Forbes contributor Pamela N. Danziger.

Companies like UPS, FedEx, and DHL say they'll pass refunds along — but primarily to their business clients, not to the individuals whose packages they shipped.

At least 17 class-action lawsuits have already been filed against retailers accusing them of "double recovery" — charging customers tariff-inflated prices and then pocketing the government refunds. Eleven of those suits are against FedEx alone, according to Bloomberg Law.

William Pletcher, litigation director of Consumer Watchdog, told Forbes these suits are only the "tip of the iceberg."

But attorney Lori Leskin, who heads the consumer products practice group at Arnold & Porter, told Forbes that plaintiffs face a steep hill: "Every company has eaten the impact of the tariff situation differently. There's so many things that explain why prices go up, that it's going to be very hard for a consumer to establish consistency across an entirety of a class."

Price Impact Was Smaller Than Headlines Suggested

Coverage has overstated how much tariffs actually hurt consumer prices. The Budget Lab at Yale initially estimated a 2.3% price impact after the tariffs were imposed. A year later, the same lab revised that figure down to between 0.5% and 1%, according to Forbes.

This doesn't mean the tariffs were good policy. The Supreme Court says they were illegal. But the narrative of sky-is-falling price inflation was exaggerated — and that framing has now infected the refund lawsuits, with plaintiffs trying to prove consumer harm that may be very difficult to quantify.

The Bottom Line

The Trump tariff overreach will cost taxpayers $166 billion in refunds. The administration has to pay that back. The government is also spending resources chasing fraud cases like First Brands.

Consumers who absorbed higher prices are almost certainly not getting a check. Class-action lawyers will get paid. Big importers will get their money back. Regular Americans will get nothing — except the bill for the legal mess.

When trade policy gets made by executive order rather than through Congress, the costs distribute unevenly across the economy.