The tariffs declared "illegal" by the U.S. Supreme Court are coming to an end! The 15% global new tax seamlessly takes over

The Tong Finance APP has learned that the U.S. Customs and Border Protection (CBP) announced that it will cease collecting the U.S. government’s reciprocal tariffs implemented under the International Emergency Economic Powers Act (IEEPA) at 12:01 a.m. Eastern Time on Tuesday. This comes more than three days after the U.S. Supreme Court declared these tariffs to be “illegal.” In a message to shippers via its Cargo Systems Messaging Service (CSMS), the agency stated that all tariff policy codes related to previous executive orders by President Trump under IEEPA will be deactivated starting Tuesday Eastern Time.

The official order to halt IEEPA-based tariffs coincides closely with President Trump’s implementation of a new 15% global tariff authorized under another law, intended to replace the IEEPA tariffs that the Supreme Court invalidated last Friday.

CBP did not explain why, days after the Supreme Court ruling, it continued to collect these tariffs at entry points; nor did its official statement provide any information regarding potential tariff refunds for importers.

The message noted that stopping the collection does not affect any other tariffs imposed by the Trump administration, including those under Section 232 national security measures and Section 301 unfair trade practices. “CBP will provide further guidance to the trade community via CSMS messages as appropriate,” the agency stated.

The so-called “reciprocal/honoring tariffs” launched on the “Day of Liberation” in April 2025, which triggered a global stock market crash, are among the tariffs implemented by the Trump administration under the legal authority of IEEPA. Strictly speaking, IEEPA tariffs include not only the “Day of Liberation reciprocal tariffs” but also other tariffs imposed under the same IEEPA authority, such as certain tariffs related to fentanyl and related orders.

Media reports on Friday cited estimates from economists at the Penn-Wharton Budget Model of the University of Pennsylvania, suggesting that the Supreme Court’s ruling on tariffs could lead to potential refunds of over $175 billion in revenue collected by the U.S. Treasury from IEEPA-based tariffs. Their bottom-up forecast model indicates that daily revenue from these tariffs exceeds $500 million.

Despite the Supreme Court’s decision, President Trump told reporters that the U.S. government would soon impose a 15% global tariff under Section 122 of the Trade Act of 1974, but it remains unclear whether the government will need to refund tariffs already collected. Market concerns about a significant deterioration of U.S. finances due to potential refunds have driven a notable rise in long-term U.S. Treasury yields, as traders collectively reacted negatively to the risk of expanding U.S. budget deficits.

The Supreme Court justices did not address whether importers are entitled to refunds; this issue will be decided by lower courts in the U.S., meaning the refund dispute could lead to a prolonged legal battle. Trump criticized the Supreme Court for not providing guidance on how to handle refunds, saying, “That wasn’t discussed. It means we will ultimately have a five-year court fight.” Last Friday at the White House, Trump stated.

Following the announcement of the 15% global tariffs, Trump also indicated he would continue to retain existing tariffs under the Section 301 and Section 232 frameworks and hinted at initiating more trade investigations. According to a recent White House fact sheet, Trump has instructed the Office of the U.S. Trade Representative to begin investigations under Section 301.

For all Asian economies reliant on exports, a research report by Morgan Stanley’s economists shows that the weighted average tariff rate will decrease from 20% to 17%, with the average tariff on Chinese goods dropping significantly from 32% to 24%. However, given that the Trump administration is seeking to rebuild its tariff system through sector-specific and country-based frameworks, this easing may only be temporary. It also means that the current tariffs exceeding 10% on China, India, Vietnam, and other countries or regions could be maintained or adjusted through other specific provisions. Nonetheless, Wall Street analysts generally believe that it will be challenging for the Trump administration to fully replicate the previously declared illegal reciprocal tariff regime, and they advise closely monitoring shifts in U.S. congressional attitudes and voter expectations.