After years of economic whiplash for small businesses, the U.S. Supreme Court delivered a clear message on Feb. 20: the sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful.
The court ruled that IEEPA does not authorize a president to impose broad tariffs on imported goods, striking down a central pillar of the Trump administration’s trade policy.
For small businesses across America, the ruling was both vindication and relief. For years, entrepreneurs warned that these tariffs weren’t a clever negotiating tactic, they were a tax on Main Street. And like any tax, it was paid not by foreign governments but by American businesses and consumers.
Damage done
The damage has been real. A recent Main Street Alliance national survey found that 41.7% of 205 small businesses delayed expansion, and nearly one-third anticipated layoffs due to the added uncertainty. Most small businesses simply do not have the margins to absorb sudden tariffs of 30%, 145%, or even higher imposed overnight with no phase-in period.
And for many companies, shifting production to the United States isn’t a realistic option. Some products, coffee, mangoes, or certain electronics components, simply cannot be produced domestically at scale. Even when alternatives exist, building new manufacturing capacity takes years, not weeks.
The stories behind these numbers are heartbreaking.
Brix Cider, a cidery in Mount Horeb, Wisconsin, delayed launching a new product because a bottle order threatened to balloon from $15,000 to $36,750 under tariff costs.
A Seattle clothing company calculated that tariffs could drive the price of a pair of underwear from $22 to $60.
A Minnesota bookstore owner described receiving a constant stream of supplier emails warning that prices might jump 5–15% at any moment due to tariff uncertainty.
Now that the Supreme Court has ruled these tariffs unlawful, the question is simple: Will small businesses get their money back?
The fastest and fairest solution would be for the administration to issue automatic refunds to importers of record. The government has already acknowledged in court that refunds, with interest, could be issued.
But businesses should not wait quietly. Importers can file formal protests with U.S. Customs and Border Protection to preserve their claims. And if the administration stonewalls, businesses may pursue recovery through the Court of International Trade.
Our legal team, including former New Jersey Attorney General Matt Platkin, trial attorney Justin Nelson, and democracy advocate Norm Eisen, is prepared to help small businesses recover what they are owed.
The Supreme Court settled the legal question. Now it’s time for the federal government to settle the bill.
Shawn Phetteplace is the national campaigns director for Main Street Alliance, a national network of more than 30,000 small business owners organizing to reclaim economic and civic power for local communities.
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