Tariff Roll-Back Still Leaves Deep Damage

Economy Smaller, Refunds In Doubt, Spending Still Paused, International Trust Damaged

When the Supreme Court struck down Trump’s most sweeping tariffs on Jan. 20, it came as no surprise to those who know the law. The Constitution explicitly gives Congress the power to tax, including tariffs. So it was no surprise on May 28, 2025 when the Court of International Trade unanimously struck them down. It was no surprise when the Court of Appeals upheld that ruling on Aug. 29, 2025. And it was no surprise when the Supreme Court concurred.

Trump, of course, went ballistic, attacking the six justices in the majority, calling them “fools and lapdogs” who are “very unpatriotic and disloyal to our Constitution.” But the court’s real folly was in taking up the case in the first place, allowing Trump’s lawlessness to continue for half a year longer than necessary, damaging the entire global trade regime, as well as American families and businesses.

While Trump’s lawless actions face lawsuits on every front, his tariffs have been the most widely felt.

“Your tariff taxes wreaked havoc on farmers, enraged our allies, and sent grocery prices through the roof,” Illinois Gov. J.B. Pritzker quickly posted on social media. “On behalf of the people of Illinois, I demand a refund of $1,700 for every family in Illinois.”

Even without those broad tariffs, “consumers will face an overall average effective tariff rate of 9.1%, which remains the highest since 1946 excluding 2025,” the Yale Budget Lab noted. “In the long run, the US economy will be persistently 0.1% smaller,” compared to 0.3% smaller if the tariffs had remained in place.

An immediate burst of 100 new lawsuits brought the total to over 2,000, with thousands more expected. The U.S. trade court previously handled a similar situation in 1998, after the Supreme Court struck down a harbor maintenance tax on exporters. But that involved only $750 million in taxes paid in about 4,000 cases, figures dwarfed by the $170+ billion paid this time by more than 300,000 importers.

The Local View

The impacts have been especially concerning here in the Harbor Area, home to the nation’s largest port complex. Directors of both ports quickly spoke out, along with business leaders.

“While this decision rules on the legality of the tariffs, it does not remove the uncertainty,” Port of Long Beach CEO Dr. Noel Hacegaba said in a statement that day. “For now, the only certainty is more uncertainty.  An orderly approach to tariffs helps businesses plan, and ports like Long Beach maximize their contribution to the U.S. economy.”

Hacegaba specifically cited the need for clarity “on whether tariffs already paid will be refunded and when the newly announced 10% global tariff will go into effect.” But within hours, the 10% tariffs went up to 15%, and even before that Trump made it clear that getting refunds would be a battle. “I guess it has to get litigated,” Trump said, speculating it could take years to play out.

Port of LA CEO Gene Seroka cited the same two sources of uncertainty, but added a hopeful note. “The Port of Los Angeles and its network of supply chain partners stand ready to manage any fluctuation in cargo and get it through the system swiftly without delay,” he said.

LA Chamber of Commerce CEO Maria Salinas was even more positive, calling the decision “a meaningful victory for our local economy,” going on to say, “Businesses have navigated higher costs and have held off on investments, all impacting our region’s ability to remain competitive. Tariffs function as taxes that disproportionately impact small businesses. This decision helps restore greater economic stability.”

At least that’s the hope.

But, “This continued uncertainty makes long-term strategic planning difficult for businesses here and abroad,” Seroka said in his report to the Harbor Commission on Feb. 26. “Many will continue their press of the pause button on hiring and capital investment, because it’s impossible to plan for more than a few months down the road when no one knows what the next rules are going to be,” he said. “Here at the Port of LA, it’s unlikely that there will be a huge increase in cargo coming in the very midterm.”

There were broader uncertainties, according to Laura Gonzalez, finance professor at California State Long Beach. Nor will prices necessarily stabilize, much less come down.

“We already know that manufacturing companies especially are holding extra-inventory due to uncertainties in the price of raw materials. This eventually generates inflation in final products,” Gonzalez told Random Lengths. “In terms of global logistics, it has become necessary to consider a wider range of suppliers. In addition, there is some uncertainty, even among monetary policy regulators, about the reliability of macroeconomic data.”

And the new 15% tariffs, with their limited time-frame and possible legal challenges only increase uncertainty. “It is difficult to estimate the impact of a tariff that may decrease and increase within a short time-frame for legal or other reasons,” Gonzalez said. “The more sustainable consequences will likely arrive from the shifts in permanent agreements between other nations and costly larger inventory levels to offset uncertainties.”

While Trump tried to take advantage of America’s economic dominance, there are signs he’s undermining it instead. For example, “The American farmer continues to bear the brunt of the federal trade policies,” Seroka noted. “As one barometer, soybean exports from the United States to China were down 90% last year.” They’ve been replaced primarily with Brazilian exports, under multi-year agreements.

And that’s just one commodity. With Trump’s tariffs invalidated, deals already struck but not finalized are in doubt. “We are already seeing a shift from unpopular and economically disadvantageous acceptance,” Gonzalez said.

And distrust of America continues to motivate countries to look elsewhere.

“There is a shift in alliances and agreements as our trade partners consider other options with long-term consequences,” Gonzalez continued. “The European Union, China and India are discussing and closing agreements between themselves and with other nations.”

The long-term impacts could be severe. “It will take decades and structural reforms for the U.S. to be reinstated as a reliable trade partner globally,” Gonzalez said. “The main issue has not been relative to a shift in trade agreements and towards tariffs, but rather the series of adjustments in decisions.” Even if a future president wants to restore normalcy and trust, it’s not clear if that will be possible.