While the industry waits on a ruling from the Supreme Court regarding the legality/constitutionality of the Trump tariffs, there’s speculation brewing about the various scenarios that might unfold depending on the court’s decision.
Scenario No. 1 entails the prospect of a full or even partial repeal of the tariffs and how such a development could affect the industry or the economy at large. In a keynote speech delivered to attendees at the recent 2025 NAFCD+NBMDA convention, Alex Hendrie, vice president of government relations for the National Association of Wholesalers (NAW), said the stakes are indeed very high.
First and foremost, he said, overruling the new tariffs not only removes a revenue stream for the federal government, but it could also create headaches as importers and agencies begin the process of requesting refunds. “With Trump focused on reshaping U.S. revenue sources, there is a greater reliance on tariffs while at the same time cutting taxes on U.S. businesses and individuals,” Hendrie stated. “When you add the numbers up side by side, the amount of taxes that were cut roughly equals the amount of tariffs the government is currently collecting.”
Industry weighs potential economic and political fallout
According to NAW’s internal research, the U.S. Treasury Dept. has to date collected more than $31 billion in tariff revenue—quadruple the amount collected in 2024. However, since the government plans to phase in the tariffs over time, the projected revenues could reach $300 billion, forecasts show.
Removing this revenue stream without replacing it, observers agree, could make the situation worse—especially in light of the impact that newly announced tax cuts are likely to have on an already high deficit.
Hendrie likened it to a Catch 22 situation. “That means, politically, we can’t really get rid of these tariffs even if we want to,” he stated. “There’s an increasingly budgetary need for these tariffs. And if they were to go away, then the U.S. government is going to have to find hundreds of billions in revenue to offset that. This creates the political problem.”
NAFCD attendees who sat in on Hendrie’s presentation attest to the complexities of the matter at hand. “Not all of the recent tariffs are at issue as the administration relied upon different authority to enact some versus other of the tariffs,” said Scott Rozmus, president and CEO of FlorStar Sales, a top-20 distributor. “Nonetheless, even the portion the Court has under review would represent billions of dollars. Those resources are now part of the government’s budgetary plan such as it is, so undoing and/or forgoing those revenues certainly will have significant political and economic ramifications. Any retroactivity could create administrative chaos.”
Experts outline possible outcomes
Scenario No. 2 involves additional legal maneuvers if, ultimately, the Supreme Court rules the tariffs unconstitutional. “While the Supreme Court may indeed override the tariffs as they are, most doubt that means they go away,” explained Jeff Striegel, president of Owing Mills, Md.- based Elias Wilf, a top 20 distributor. “Instead, they may simply be called something different and/or simply shifted to another classification of tariffs. Virtually no one—not even the attorneys who argued against the Trump administration at the Supreme Court—expects him to call it quits on tariffs, a key part of his overarching economic agenda.”
Striegel cited statutes that show an adverse Supreme Court decision could bar President Trump from invoking the 1977 International Emergency Economic Powers Act (IEEPA) to implement the bulk of his sweeping tariff agenda. Specifically, it would force the president to seek out other statutes to effectuate his overhaul of global trade.
That would leave the administration with a couple of options: a) Trump could invoke Section 201 authority to impose duties if he or the International Trade Commission deems an increase in imports poses a threat or causes “serious injury” to American manufacturers. Using Section 232 authority, Trump could impose restrictions on imports if the U.S. secretary of Commerce determines that some circumstance of those imports “threaten to impair” national security; b) Trump could also direct the Office of the U.S. Trade Representative to impose tariffs as an enforcement measure of American rights under trade agreements and in response to certain foreign trade practices, following the office’s investigation, using Section 301 authority; and c) By invoking Section 338 authority, the president could place tariffs on imports “whenever he shall find as a fact” that the foreign nations discriminate against U.S. commerce.
Where the judges stand
In a dense but illuminating essay explaining the current dilemma facing the courts, JD Supra—a firm that helps clients and businesses navigate through complex legal and business issues—clarifies the judges’ positions on the matter. Based on the justices’ questions during oral arguments, it appears they are split 3-3-3.
Justices Thomas, Alito and Kavanaugh appear inclined to uphold the tariffs; Justices Kagan, Sotomayor and Jackson seem inclined to invalidate them; and Chief Justice Roberts and Justices Barrett and Gorsuch are undecided. Justices Barret and Gorsuch showed skepticism toward the government’s position (although for different reasons) while probing textual and structural paths that could sustain narrower regulatory tools. Chief Justice Roberts suggested that he sees the tariffs as violating the major questions doctrine, the essay showed.
If a majority of the justices find that the IEEPA tariffs are unlawful, the Court can avoid striking them down in full. The Court could take a narrower approach and find that IEEPA authorizes some tariffs but not those of the scope and duration imposed hereon. However, the Supreme Court is unlikely to remand any merit issues given that it has expedited proceedings.
