CHICAGO, February 25, 2026 —The U.S. Supreme Court rules that the President doesn’t have the authority to set the nation’s tariff policies. “Oh, yes I do,” retorts a livid President Trump, who immediately imposes a new duty on imports and declares he could halt all incoming goods if he wanted.
Meanwhile, parties ranging from FedEx to the state of New York say they’ll seek a refund of the duties they’ve paid under the tariffs that were struck down as unconstitutional. In the instance of the Empire State, that’s a payback of $13.5 billion.
Hundreds if not thousands of other entities are expected to make similar refund requests. But there’s no process yet for submitting the claims, and the lower court that was directed to develop one has said nothing about a schedule. The expectation is that claimants will eventually have to resort to litigation if they hope to get any money back. The process could take years.
Smack in the middle of that mess is a food-away-from-home industry that depends on foods, beverages, and other supplies shipped into the U.S. from overseas. Comments aired immediately after the Supreme Court decision indicated that even Cabinet-level officials didn’t have a complete understanding of what the ruling and Trump’s response would mean for the domestic business community. What kind of clear picture is a lay person going to get of what could be next?
The crystal ball is still cloudy. But an understanding of where the events of last week left the industry could be a big step toward clarity.
Here in terms for those who don’t know the difference between FIFO and LIFO is how things stand. The explanation is arrayed by the questions that are likely on FAFH executives’ minds.
So, are there tariffs or not?
Yes, there were tariffs in place as of Tuesday morning. President Trump exercised an authority vested in the Chief Executive as an emergency measure to impose a 10% duty on most goods shipped into the U.S. The President has indicated that he’d like to raise the level to 15% across the board.
Technically, the new tariff is different from the ones that were struck down by the Court, which means the exemptions Trump granted on most food and beverage imports in November are not in force.
How could Trump impose another tariff after the Supreme Court ruled that he lacked the authority to do so?
The question before the court wasn’t the open-ended one of whether the President can impose tariffs. It ruled on the much narrower matter of whether the Chief Executive had the authority under a specific 1977 law, the International Emergency Executive Powers Act (IEEPA), to impose the surcharges.
The measure allows the president to levy duties in times of economic crisis. The White House argued that fentanyl smuggling and a glaring trade deficit with most nations were unmistakable indications the nation is in the midst of just such a crisis.
The Court disagreed, saying in effect that the tariffs imposed from April through November of last year were essentially taxes, not limited-time emergency measures, and the Constitution clearly grants only Congress the authority to set taxes.
The White House was ready with a workaround. Hours after the Court’s decision was handed down, Trump announced that he would impose a 10% across-the-board tariff on imports under the authority granted him under a different law, the Trade Act of 1974.
How is that law different?
It explicitly allows the President to impose protective tariffs should a balance of trade deficit swell to outlandish proportions—the very thing Trump has been arguing. There’s no ambiguity, as he stressed in a blistering press conference convened in response to the Court ruling.
According to the Administration, the measure even allows the President to impose an embargo on any or all goods coming from a particular country or countries.
Why didn’t Trump take that approach in the first place?
The White House never provided an explanation, though Trump said during his press conference that the possibility had been discussed at length before he imposed his tariff policy.
The reason may have been the limited time frame that’s set for tariffs imposed under the Trade Act. The import duties can only be levied for 150 days. They expire automatically on that date unless Congress extends them through legislation.
What about refunds? Will the $160 billion collected through the tariffs be returned to the parties who ponied up?
The Supreme Court did not direct the Administration to refund what has been collected. Instead, it sent the case back down to the U.S. Court of International Trade, the first court to rule on the tariffs. That body nixed the surcharges. Its decision was appealed to a higher court, which also gave the duties a thumbs-down. The Supreme Court was technically reviewing the decisions of those two lower chambers.
The high court directed the Court of International Trade to address the mechanics of fielding refund requests and getting the money to the appropriate parties.
According to widespread speculation, the refund process could take years.
Have we seen the end of litigation over the tariffs?
Not by a long shot, according to the prevailing take on the matter. Trump’s use of the Trade Act as a workaround is likely to be challenged in court, just as his use of IEEPA was. Disagreements over refunds also promise to be a boon to trial lawyers.
The best bet is to buckle up and see what happens.