Supreme Court Tariff Legality Review: Impact on Tariff Refunds and Market Dynamics

This analysis is based on the FX Empire report [1] dated 2025-12-22, which highlights the Supreme Court’s review of tariffs imposed by the Trump administration. The court heard arguments on November 5, 2025, with a decision expected by June 2026 [2]. Major importers, including Costco, Revlon, and Kawasaki, are suing to preserve their right to refunds for tariffs collected, estimated at $89B (CBP data) to $100B (FX Empire) [1][2]. The Trump administration is depositing tariff revenues into the U.S. Treasury, a tactic that could complicate the refund process [4].

On the day of the news release (2025-12-22), short-term market reactions were mixed: the S&P 500 rose 0.19%, the Dow Jones Industrial Average increased 0.31%, and the NASDAQ Composite fell 0.09% [0]. Among affected companies, Costco (COST) closed down 0.47%, while Kawasaki Heavy Industries (KWHIY) rose 0.17% [0]. This muted response is attributed to the expected delay in the Supreme Court decision until mid-2026.

1. Costco’s Financial Position
   : Costco’s profit model relies heavily on membership fees (over $5.3B in annual net sales from memberships [7]), meaning tariff refunds could provide an unexpected cash boost. Jim Cramer noted that a Supreme Court victory against tariffs could help lift Costco’s stock from its current slump [5].

2. Government Contingency Plans
   : The Trump administration is exploring alternative tariff measures (Section 301 and Section 122) as a fallback if the Supreme Court rules against the IEEPA tariffs [8], indicating potential for continued trade policy adjustments.

3. Dividend Plan Risks
   : The proposed $2,000 tariff dividend checks for 2026 could be threatened if the tariffs are struck down, as the revenue source for these payments would be eliminated [6].

• Importers could receive billions in tariff refunds, improving their cash flow and financial flexibility [1][2].
• Tariff-exposed companies like Costco may experience stock recovery if the Supreme Court rules in favor of importers [5].

• Legal delays in the refund process due to the administration’s decision to deposit tariff revenues into the Treasury [4].
• Trade policy uncertainty could impact U.S. relations with major trading partners.
• Smaller importers may face disproportionate impacts that have not been fully covered in public news [analyst information gap].

This report synthesizes information on the Supreme Court’s review of Trump administration tariffs, potential refund amounts, market reactions, and implications for companies and trade policy. The analysis does not provide investment advice but offers objective context for decision-making. Key data points include the $89-100B refund estimate, mixed short-term market movements, and Costco’s membership fee-focused business model. Stakeholders should monitor Supreme Court updates, government contingency plans, and the impact on both large and small importers.