The Supreme Court of the United States on Friday blocked key tariffs imposed by President Donald Trump, a move that could lower costs for American households next year. However, the ruling also makes it unlikely that Trump will be able to move forward with his plan to send out $2,000 “tariff dividend” checks.
Court decision could ease financial pressure on households
As reported by CNBC, according to John Ricco, associate director of policy analysis at the Budget Lab. Before the decision, the average tariff rate stood at 16.9%. According to the Yale Budget Lab, that rate would have cost the typical US household an extra $1,300 to $1,700 in 2026.
In a 6-3 ruling, the court said Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose tariffs linked to trade imbalances and fentanyl smuggling. While some tariffs remain, ending the IEEPA-based measures could reduce the expected burden on families by about half to roughly $600 to $800.
“I’m actually shocked that the number wasn’t a little higher on the financial burden to the average American household than $1,000,” Erik Rosica, sales supervisor at OEC Group New York, a global freight forwarding company, told The Post.
“I do agree that the impact of reversing them would hopefully halve it – but again, that’s only if people lower their prices,” he added.
Rosica expressed doubts that businesses, especially clothing retailers and sellers of big ticket items like furniture, would lower prices quickly.
Even if companies decide to reduce prices, consumers may only notice small changes on everyday goods. For example, the shoppers might choose a paper cup that costs 20 cents less than another option forcing companies to compete more aggressively.
Some businesses have already absorbed part of the tariff costs in recent months, based on consumer and producer price data. As a result, price drops may not be as large as shoppers expect.
Rosica estimated it could take three to six months before customers see noticeable price differences in stores.
$2,000 tariff dividend plan faces major setback
The ruling also casts doubt on Trump’s promise to send $2,000 checks to low and middle income Americans funded by tariff revenue.
Rosica told The Post that the decision likely means there will not be enough funds to cover such payments, although he noted that “nothing’s off the table.” Some tariffs remain in place but revenue from those would not be sufficient to replace the income lost from the overturned measures.
According to the Committee for a Responsible Federal Budget, sending out $2,000 checks could cost up to $600 billion which is about twice the revenue previously expected from all of Trump’s tariffs, including those that have now been struck down.
Businesses brace for uncertainty amid the policy shifts
There is also the issue of inventory already produced or shipped under the earlier tariff rates. Goods currently in warehouses or on boats were sourced when the higher tariffs were still in effect.
According to The Post, some companies may rush to increase production or refill warehouses while prices are lower.
“We saw last year as soon as certain tariffs got dropped, let’s just say it was furniture, everybody rushes to just refill their warehouses,” Rosica said.
“They’ll put as much on the water as they can and then find warehouse space where they need it to make sure they have stock at a lower rate,” he added
At the same time, many business leaders are cautious and concerned that the administration could introduce new tariffs under a different trade or national security law. On Friday, Trump promised to impose a new 10% global tariff, adding to the uncertainty.
