The Dictatorship
The Supreme Court struck down Trump’s tariffs. Now comes the hard work of issuing refunds
WASHINGTON (AP) — The Supreme Court on Friday struck down President Donald Trump’s biggest and boldest tariffs. But the justices left a $133 billion question unanswered: What’s going to happen to the money the government has already collected in import taxes now declared unlawful?
Companies have been lining up for refunds. But the way forward could prove chaotic.
When the smoke clears, trade lawyers say, importers are likely to get money back — eventually. “It’s going to be a bumpy ride for awhile,” said trade lawyer Joyce Adetutu, a partner at the Vinson & Elkins law firm.
The refund process is likely to be hashed out by a mix of the U.S. Customs and Border Protection agency, the specialized Court of International Trade in New York and other lower courts, according to a note to clients by lawyers at the legal firm Clark Hill.
“The amount of money is substantial,” Adetutu said. “The courts are going to have a hard time. Importers are going to have a hard time.’’
Still, she added, “it’s going to be really difficult not to have some sort of refund option’’ given how decisively the Supreme Court repudiated Trump’s tariffs.
In its 6-3 opinion on Friday, the court ruled Trump’s attempt to use an emergency powers law to enact the levies was not valid. Two of the three justices appointed by Trump joined the majority in striking down the first major piece of his second-term agenda to come before them.
At issue are double-digit tariffs Trump imposed on almost every country in the world last year by invoking the 1977 International Emergency Economic Powers Act (IEEPA). The Supreme Court ruled that the law did not give the president authority to tax imports, a power that belongs to Congress.
The U.S. customs agency has already collected $133 billion in IEEPA tariffs as of mid-December. But consumers hoping for a refund are unlikely to be compensated for the higher prices they paid when companies passed along the cost of the tariffs; that’s more likely to go to the companies themselves.
In a dissenting opinion, Justice Brett Kavanaugh dinged his colleagues for dodging the refund issue: “The Court says nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers.’’
Borrowing a word that Justice Amy Coney Barrett — who sided with the majority — used during the court’s November hearing on the case, Kavanaugh warned that “the refund process is likely to be a ‘mess.’”
“I guess it has to get litigated for the next two years,” Trump told reporters at a press conference Friday, in which he decried the court’s decision and said he was “absolutely ashamed” of some justices who ruled against his tariffs. “We’ll end up being in court for the next five years.’’
The end of the IEEPA tariffs could help the economy by easing inflationary pressures. The tariff refunds — like other tax refunds — could stimulate spending and growth. But the impacts are likely to be modest.
Most countries still face steep tariffs from the U.S. on specific sectors, and Trump intends to replace the IEEPA levies using other options. The refunds that do get issued will take time to roll out — 12 to 18 months, estimates TD Securities.
The U.S. customs agency does have a process for refunding duties when importers can show there’s been some kind of error. The agency might try to build on the existing system to refund Trump’s IEEPA tariffs, said trade lawyer Dave Townsend, a partner with the law firm Dorsey & Whitney.
And there has been a precedent for courts making arrangements to give companies their money back in trade cases. In the 1990s, the courts struck down as unconstitutional a harbor maintenance fee on exports and set up a system for exporters to apply for refunds.
But the courts and U.S. customs have never had to deal with anything like this — thousands of importers and tens of billions of dollars at once.
“Just because the process is difficult to administer doesn’t mean the government has the right to hold on to fees that were collected unlawfully,″ said trade lawyer Alexis Early, partner at the law firm Bryan Cave Leighton Paisner.
Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, said it’s hard to know how the government will deal with the massive demand for refunds. It might try to streamline the process, perhaps setting up a special website where importers can claim their refunds.
But Adetutu warns that “the government is well-positioned to make this as difficult as possible for importers. I can see a world where they push as much responsibility as possible onto the importer’’ — maybe forcing them to go to court to seek the refunds.
Many companies, including Costco, Revlon and canned seafood and chicken producer Bumble Bee Foods, filed lawsuits claiming refunds even before the Supreme Court ruled, essentially seeking to be at the head of line if the tariffs were struck down.
There are likely to be more legal battles ahead. Manufacturers might, for example, sue for a share of any refunds given to suppliers that jacked up the price of raw materials to cover the tariffs.
“We may see years of ongoing litigation in multiple jurisdictions,’’ Early said.
Consumers, though, are unlikely to enjoy a refund windfall. The higher prices they’ve had to pay would likely be hard to attribute to a specific tariff. Should they pursue refunds anyway? Early wouldn’t advise wasting money on legal fees, but said: “In America, we have the ability to file a lawsuit for anything we want.’’
Illinois Gov. JB Pritzker, a Democrat and Trump antagonist, is demanding a refund on behalf of his state’s 5.11 million households. In a letter addressed to Trump and released by Pritzker’s gubernatorial campaign, the governor said the tariffs had cost each Illinois household $1,700 — or $8.7 billion. Pritzker said failure to pay will elicit “further action.’’
Nevada Treasurer Zach Conine submitted a payment request to the federal government for $2.1 billion to recoup the costs of the tariffs, his office announced Friday.
“As Nevada’s chief investment officer, I have a responsibility to try to recoup every single dollar that the Trump Administration takes from Nevada families,” Conine said in a statement.
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AP Writers Lindsay Whitehurst and Christopher Rugaber in Washington, Jessica Hill in Las Vegas and John O’Connor in Springfield, Illinois, contributed to this story.
NEW YORK (AP) — President Donald Trump’s administration this week acknowledged it made a significant error in figures it used to help justify a fraud probe into New York’s Medicaid program, a glaring mistake that undercuts a federal campaign to tackle waste, mostly in Democratic-led states.
The error, which the administration admitted first to The Associated Press, prompted health analysts to question how many of the Republican administration’s sweeping anti-fraud efforts around the country were based on faulty findings. One of a few mischaracterizations it made about New York’s Medicaid program, it also reflected a common criticism that’s been made of Trump’s second administration — that it tends to attack first and confirm the facts later.
“These numbers could have been cleared up in a phone call, so it’s really slapdash,” said Fiscal Policy Institute senior health policy adviser Michael Kinnucan, whose recent analysis called attention to the Trump administration’s inaccurate claim.
The mistake appeared in comments made last month by Dr. Mehmet Ozthe administrator of the Centers for Medicare & Medicaid Services, in a social media video and in a letter to New York’s Democratic governor announcing the fraud investigation.
Oz claimed that New York’s Medicaid program last year provided some 5 million people with personal care services, which assist people in need with basic activities like bathing, grooming and meal preparation. That would add up to nearly three-fourths of the state’s 6.8 million Medicaid enrollees.
“That level of utilization is unheard of,” Oz said in the video, adding in his post that New York needs to “come clean about its Medicaid program.”
But the real number of New Yorkers who used those services last year was about 450,000, or between 6% and 7% of total enrollees, CMS spokesman Chris Krepich told the AP this week. He said the agency misidentified New York’s approach to applying billing codes and had since refined its methodology.
“CMS is committed to ensuring its analyses fully reflect state-specific billing practices and will continue to work closely with New York to validate data and strengthen program integrity oversight,” he said in an emailed statement.
Krepich said the probe was ongoing as the administration still has concerns with New York’s oversight of personal care services and the Medicaid program and is reviewing the state’s response to last month’s letter. CMS had raised other flags about New York’s program, including that it spends more per beneficiary and per resident than the average state, has high personal care spending and employs so many personal care aides that the job category is now the largest in the state.
Health analysts said the state’s high spending reflected both high costs for services in New York and a policy choice to provide robust at-home care. Cadence Acquaviva, senior public information officer for the New York Department of Health, called Oz’s initial mischaracterizations “a targeted attempt to obscure the facts.”
“New York State remains committed to protecting and preserving vital Medicaid programs that deliver high-quality services to New Yorkers who depend on them,” she said.
In a statement, a spokesperson for Gov. Kathy Hochul said, “The initial claim by CMS was patently false, and we are glad they now admit it.”
“Governor Hochul has been clear that New York has zero tolerance for waste, fraud and abuse in Medicaid, or any other state programs, and will continue her efforts to root out bad actors, protect taxpayer dollars, and safeguard the critical programs that New Yorkers rely on,” spokesperson Nicolette Simmonds said.
New York probe is part of a larger crackdown
The Trump administration’s investigation into New York comes as it has similarly approached at least four other states, including California, FloridaMaine and Minnesota, with investigations into potential health care fraud. The anti-fraud effort appears to be expanding as voters in the upcoming midterm elections say they’re concerned about affordability.
Trump last month signed an executive order to create an anti-fraud task force across federal benefit programs led by Vice President JD Vance. As part of that project, Vance announced the administration would temporarily halt $243 million in Medicaid funding to Minnesota over fraud concerns, a move over which the state has since sued.
Kinnucan, the analyst with expertise in New York’s Medicaid program, said he’s concerned that the Trump administration’s adversarial approach to targeting fraud in some states “politicizes” a conversation that should be a team effort.
“We want to think collaboratively among all the stakeholders in the program about how we can actually fix it,” Kinnucan said. “We don’t want to have fraud be this political football.”
Oz made other claims New York advocates say are inaccurate
In his video, Oz made at least two other claims about New York that Medicaid advocates and beneficiaries say distorted the facts.
In one instance, he said the state recently made its screening for personal care eligibility “more lenient by allowing problems like being ‘easily distracted’ to qualify for a personal care assistant.”
Rebecca Antar, director of the health law unit at the Legal Aid Society, said the opposite was true — that the state in a rule change that went into effect last September instead made its program requirements more stringent. She said being “easily distracted” doesn’t appear anywhere among them.
Krepich said the administrator was referring to whether New York’s standard for personal care services was “sufficiently rigorous.”
“When standards are overly permissive, it risks diverting resources away from individuals with the highest levels of need and placing long-term pressure on the sustainability of the Medicaid program,” he said.
Oz in the video also referred to personal care services as “something that our families would normally do for us, like carrying groceries.”
Kathleen Downes, a 33-year-old who has quadriplegic cerebral palsy and uses personal care services in New York’s Nassau County, said she was offended by the notion that all Medicaid beneficiaries have family members who are willing and able to help.
Downes, who has been disabled since birth and needs personal care help for things like showering, using the toilet and eating, said she hires both her mother and outside assistants for personal care services, so her aging mother doesn’t have to take on those tasks full time. She said her mother did the labor unpaid for years, precluding her from pursuing other career opportunities.
“He’s assuming that everybody wants to and can just do it for free forever,” Downes said. “And that’s not feasible for a lot of people.”
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Associated Press writer Anthony Izaguirre contributed to this story.
Friday’s splashdown of the Artemis II crew, the first to travel to the moon since the Apollo program ended in 1972, is a moment of celebration for all of us on Earth.
But it’s also an important reminder that, despite this success, the current administration’s Office of Management and Budget is proposing budget cuts that will all but dismantle much of NASA. It’s surprising, illogical and very troubling.
The proposed cuts would terminate 53 NASA Science missions, throwing away more than $13 billion in taxpayer investment.
The proposed cuts would terminate 53 NASA Science missions, throwing away more than $13 billion in taxpayer investment and halting the development of nearly every future NASA Science mission.
These cuts would be an insult to our astronauts and entire NASA workforce. Astronauts and their colleagues are civil servants who work hard, accomplish nearly impossible things and represent our country to the world.
It’s an odd choice from an administration that has pledged to put America first, to be sure. But stranger still, and quite personal to me, is the OMB’s proposal to completely end NASA’s STEM (Science, Technology, Engineering, and Math) outreach program, which supports students and teachers nationwide. Programs like this have helped the United States be a world leader in science and technology.
We cannot allow this.
The U.S. has many great institutions, but NASA is a unique part of the American story. NASA is the best brand our nation has. When people around the world think of the U.S. at its best, they think of astronauts exploring the moon, telescopes opening new windows on the cosmos and spacecraft making profound discoveries on other worlds. NASA is who we are when we’re curious, bold and united.
There is also a growing consensus in Washington that we are in a new space race, this time, with the China National Space Administration, which, by the way, is planning to have taikonauts walk on the Moon in 2030. If the race is on, why abandon so much? Why cede the lead? The U.S. cannot be first in space if it is second in science and technology.
The administration proposed almost the same draconian cuts to NASA last year. When it did, we the people fought back. The Planetary Society, along with more than 300 advocates and 19 other partner organizations, went to Washington and organized the largest grassroots advocacy outreach for space science in history. Tens of thousands of citizens from every state and congressional district wrote, called and made their case to their elected officials. Together, we successfully saved NASA.
Now, this year, we have no choice but to fight back. On April 20, we will return to Washington, where people can join in person or join our Save NASA Science campaign online.
Science is not a luxury. It is a responsibility. Our founders knew it; you will find “Science” cited in Article 1, Section 8 of the Constitution. Only a public space agency can sustain decades-long investments in the kind of science that tells us whether life ever existed on Mars, that tracks the asteroids that could threaten every living thing on Earth and that reveals the story of our origin.
NASA’s science program is a bargain for Americans. It accounted for one-tenth of 1% of the nation’s expenditures last year, a tenth of a penny of every tax dollar.
Cutting science would not just delay discovery; it would destroy it. It would shatter our STEM talent pipeline. It would abandon our international partners. And, it would cede U.S. leadership in space science to China and other nations.
NASA’s science program is a bargain for Americans. It accounted for one-tenth of 1% of the nation’s expenditures last year, a tenth of a penny of every tax dollar. And for every dollar spent, three come back into the economy. Every year, NASA generates $75 billion of economic growth and supports over 300,000 jobs in all 50 states.
Members of Congress and the Senate agree: NASA is a remarkable investment. I’ve met with both Republicans and Democrats, all of whom support space science. And last year, an overwhelming bipartisan majority rejected these same cuts.
NASA is what makes America great. It represents our best values: curiosity, determination, tenacity, and global cooperation. It proves that we are capable of extraordinary things. When we invest in scientific exploration, we invest in ourselves — in our economy, security and future.
If we concede and retreat from the frontier of space after a half century of leadership, it would be an unworthy choice. If Artemis II has showed us anything, it’s that the public, across the political spectrum, strongly supports space exploration, scientific discovery and a deeper understanding of the universe and our place within it.
Bill Nye is the chief ambassador at The Planetary Society, the world’s largest space interest organization.
After making history as the farthest journey into space humans have ever made, NASA’s Artemis II mission returned to Earth on Friday, splashing down off the coast southwest of San Diego.
The Artemis II crew splashed down successfully at 5:07:47 p.m. PT. The Orion spacecraft launched last weekfrom the Kennedy Space Center in Florida, the first crewed flight to the moon in more than 50 years. The entire mission from liftoff took a total of nine days, one hour, 31 minutes and 35 seconds, which NASA rounds up, to call it a 10-day mission.
In the buildup to the mission, questions about the craft’s heat shield led to concerns among some experts about whether Orion would hold up on reentry to the Earth’s atmosphere, the most perilous part of any crewed mission. A NASA-commissioned panel ultimately deemed the ship safewith the astronauts themselves endorsing it ahead of time.
The four-member crew — NASA astronauts Reid Wiseman, Victor Glover and Christina Koch, along with Canadian Space Agency astronaut Jeremy Hansen — embarked on the 10-day mission to fly around the moon, setting the stage for future missions aimed at establishing a permanent lunar base.
After splashdown, NASA administrator Jared Isaacman praised the crew, calling them “wonderful communicators, almost poets,” during an interview Friday evening.
“These were the ambassadors from humanity to the starts that we sent out there,” Isaacman said.
He also emphasized that this mission set the stage for a future moon landing — and base.
“This is not a once in a lifetime … This is just the beginning,” he said during the interview. “We are going to get back into doing this with frequency, sending missions to the moon, until we land on it in 2028 and start building our base.”
On April 6, the spacecraft reached 252,756 miles from Earth, the farthest distance traveled by humans. Artemis II broke the Apollo 13crew’s record of 248,655 miles, set in 1970.
The crew conducted a seven-hour lunar flyby, coming within about 4,000 miles of the moon’s surface and seeing areas of the moon never before seen by the naked eye. In addition to testing the spacecraft, the astronauts studied the far side of the moon during a solar eclipse and observed lunar geological features and color variations.
Now back on Earth, the astronauts will undergo medical evaluations before heading to shore and traveling to NASA’s Johnson Space Center in Houston.
The next such mission, Artemis IIIis expected to launch next year.
Erum Salam is a breaking news reporter for MS NOW, with a focus on how global events and foreign policy shape U.S. politics. She previously was a breaking news reporter for The Guardian.
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