CASE STUDY
Ruling Date
20 February 2026 Tariffs Collected
US$170+ billion Lawsuits Filed
2,000+ and rising
Prepared: 28 February 2026 | Classification: Academic / Policy Research
- Executive Summary
On 20 February 2026, the United States Supreme Court declared the majority of President Donald Trump’s unilaterally imposed global tariffs illegal, triggering one of the largest waves of trade litigation in American legal history. Within days, more than 2,000 lawsuits were filed at the US Court of International Trade (CIT) by importers seeking refunds on over US$170 billion in tariff revenues collected over the preceding ten months. The ruling exposes deep fault lines between executive trade authority, judicial oversight, and the commercial interests of hundreds of thousands of US importers — with cascading consequences for global supply chains, including those anchored in Singapore. - Background and Context
2.1 The Tariff Regime
Beginning in early 2025, the Trump administration imposed sweeping global tariffs on a broad range of imported goods, invoking executive emergency trade powers. These measures affected virtually all major trading partners and covered hundreds of product categories — from consumer electronics and footwear to medical devices and industrial components. The administration justified the tariffs primarily on national security and trade-deficit grounds.
Over approximately ten months, US Customs and Border Protection collected over US$170 billion in tariff revenues. These costs were borne directly by importers — typically large corporations and small-to-medium enterprises (SMEs) that bring goods into the United States — though in practice, many passed on the additional costs to downstream retailers and ultimately to consumers through higher prices.
2.2 The Supreme Court Ruling (20 February 2026)
The Supreme Court’s February 2026 ruling held that most of the Trump-era global tariffs were imposed without adequate statutory authority, exceeding the bounds of executive power under the relevant trade legislation. The Court’s majority opinion found that the administration had interpreted emergency trade powers too expansively, effectively legislating tariff policy without congressional authorisation.
Critically, the justices declined to address the question of refunds, deliberately leaving that issue to the CIT. This omission created an immediate legal vacuum that importers — and their counsel — moved swiftly to fill through litigation.
Key Legal Principle: The Supreme Court’s silence on refunds was not incidental. It reflected the Court’s institutional reluctance to pre-empt the CIT’s jurisdiction over customs matters, but it effectively ensured that the refund battle would be prolonged, highly contested, and potentially lasting several years.
2.3 The Litigation Landscape
The initial surge of lawsuits was concentrated among smaller businesses that lacked the negotiating leverage or financial reserves of larger multinationals. Large corporations had greater capacity to renegotiate vendor contracts, shift sourcing, or absorb tariff costs as a strategic investment in market continuity. SMEs had no such buffers.
However, by late February 2026, major publicly listed corporations began filing suit, most notably FedEx Corporation, followed rapidly by Dyson, Dollar General, Bausch & Lomb, Brooks Brothers, and Sol de Janeiro USA. Subsidiaries of L’Oréal SA, On Holding AG, and Skechers USA also filed. These filings were significant not merely for the dollar amounts at stake, but for their signalling function: large corporate plaintiffs with in-house legal teams and Washington connections provide political cover for smaller firms by normalising litigation and reducing the perceived risk of executive retaliation.
Company / Entity Sector Nature of Claim
FedEx Corporation Logistics / Freight Duty refunds as importer of record; committed to pass refunds to shippers
Dyson Consumer Electronics Tariff recovery on imported appliances
Dollar General Retail Tariff recovery on broad consumer goods range
Bausch & Lomb Medical Devices Tariff recovery on ophthalmic products
Brooks Brothers Apparel / Fashion Tariff recovery on imported garments
L’Oréal SA (subsidiaries) Cosmetics / Beauty Tariff recovery on beauty and personal care imports
On Holding AG Footwear / Athletics Tariff recovery on imported footwear
Skechers USA Footwear Tariff recovery on imported footwear
Sol de Janeiro USA Beauty / Personal Care Tariff recovery on imported products
- Case Analysis
3.1 Legal Dynamics
Jurisdiction and Refund Authority
The CIT is a specialised Article III federal court with exclusive jurisdiction over civil actions arising from US customs and international trade laws. Its prior experience with mass refund proceedings — notably following the 1998 Supreme Court ruling in United States v. United States Shoe Corporation, which struck down the harbour maintenance tax on exports — provides an institutional template. However, the scale of the current litigation is without precedent in US trade court history.
The Justice Department’s filing due on 6 March 2026 will be pivotal. Prior DOJ statements in earlier proceedings had assured at least some importers that they would be repaid, with interest, if they prevailed — and the administration had made concessions acknowledging the CIT’s authority to order refunds. Any reversal of those assurances will be legally and reputationally costly for the government.
Executive Resistance and Political Risk
President Trump publicly stated after the ruling that refunds would likely require years of litigation, implicitly signalling that the administration would not cooperate with expedited resolution. This posture creates a tension between the administration’s fiscal interest (preserving US$170+ billion in collected revenue) and the legal obligations arising from an adverse Supreme Court ruling.
Strategic Risk: The administration faces a compounding legal problem. If it actively obstructs refunds, it risks contempt proceedings and further adverse judicial rulings that entrench broader precedents limiting executive trade authority. If it cooperates, it validates the Court’s ruling and potentially faces political criticism from its protectionist base.
Downstream Litigation
A structurally underappreciated dimension of this litigation is the emerging wave of downstream private suits. Importers that passed tariff costs to retailers or consumers via contractual price-adjustment clauses may face contribution or clawback claims from those parties once refunds materialise. A proposed class action against EssilorLuxottica (Ray-Ban) by a New York consumer, seeking recovery for tariff-inflated retail prices, is an early illustration of this dynamic. Since consumers cannot directly claim refunds from customs authorities, private contractual and consumer protection claims represent the only available avenue for end-user recovery.
3.2 Economic Dimensions
The US$170 billion figure, while headline-grabbing, understates the true economic cost of the tariff regime. It does not account for deadweight losses from trade diversion, the administrative costs borne by importers to achieve customs compliance, or the downstream economic effects of higher consumer prices. Several Federal Reserve analyses from the 2025 period estimated that the tariff regime reduced real household purchasing power by measurable amounts across income brackets.
For the federal government, these tariff revenues were already incorporated into fiscal projections. A court-ordered refund programme — even a phased one — would represent a significant, unbudgeted fiscal outflow, with potential implications for the deficit trajectory and Treasury debt management.
Metric Estimated Figure Source / Basis
Total tariff revenues at issue US$170+ billion Bloomberg / CIT filings
Duration of tariff collection ~10 months (2025–2026) Timeline of executive orders
Number of lawsuits filed 2,000+ (as of 28 Feb 2026) Bloomberg News analysis
Importers affected (est.) Hundreds of thousands US Customs data (est.)
Precedent refund case Harbor maintenance tax (1998) US Shoe Corp. SCOTUS ruling
DOJ next filing date 6 March 2026 Court schedule
- Outlook
4.1 Near-Term (0–6 Months)
The immediate period will be defined by procedural manoeuvring at the CIT. The court has been automatically pausing tariff cases pending final Supreme Court closure, which typically takes more than a month. Plaintiffs will aggressively petition for case reinstatement and early hearing dates. The DOJ’s 6 March filing will establish whether the government intends to contest refund authority, contest the quantum of individual claims, or engage in any form of global settlement negotiation.
► DOJ filing (6 March 2026) sets the government’s litigation posture
► CIT case management orders will determine queue and hearing schedule
► Supreme Court formal case closure required before CIT proceedings fully reopen
► Additional corporate plaintiffs expected to file as the political calculus shifts
► Consumer class actions against major retailers likely to multiply
4.2 Medium-Term (6–24 Months)
A global resolution of 2,000+ individual claims through conventional litigation is practically impossible within this timeframe. The more likely path involves the CIT establishing a claims-processing framework analogous to the 1998 harbour tax proceedings, potentially with a master docket and standardised proof-of-payment procedures. Congress may also intervene — either to appropriate funds for an expedited refund programme or, conversely, to legislate a retroactive tariff authority to moot the claims.
► CIT likely to develop a mass-claims administrative framework
► Congressional action possible — either appropriating refunds or attempting retroactive legislative fix
► Interest on refund amounts will compound, increasing the fiscal exposure over time
► Importer-retailer cost-sharing disputes will generate secondary litigation waves
4.3 Long-Term (2+ Years)
The Supreme Court ruling will have lasting structural effects on US trade law. It materially constrains future administrations — of either party — from using similar emergency trade powers to impose unilateral tariffs without explicit congressional authorisation. This represents a significant recalibration of the separation of powers in trade policy, with implications for the entire architecture of US trade statutes including IEEPA, Section 232, and Section 301.
For global trade governance, the ruling may embolden trading partners to pursue WTO dispute resolution more aggressively, confident that US courts will constrain unilateral US trade escalation. It also provides a precedent that domestic importers — not just foreign exporters — can serve as effective judicial challengers to executive overreach in trade policy.
Long-Term Structural Effect: The ruling effectively transfers de facto tariff authority back toward Congress. Future significant tariff regimes will require legislative action, making them more durable but also more politically negotiated — a significant change in the dynamics of US trade diplomacy.
- Singapore Impact Assessment
5.1 Singapore’s Trade Exposure
Singapore is among the most trade-dependent economies in the world, with total merchandise trade consistently exceeding 300% of GDP. Its entrepôt function — serving as a regional hub for goods transit, value-added processing, and re-export — means that disruptions to US-bound trade flows have amplified effects on the Singapore economy relative to its size. Singapore’s top export destinations include the United States, China, Hong Kong, and Malaysia, with the US typically accounting for approximately 8–12% of non-oil domestic exports (NODX).
5.2 Direct Trade Effects
The Trump tariff regime subjected many Singapore-origin or Singapore-transited goods to elevated duties. Sectors most directly affected include electronics and semiconductors, pharmaceuticals and biomedical products, precision engineering components, and chemical products. Singapore’s pharmaceutical and semiconductor clusters — centred on multinational manufacturing operations in Jurong and Tuas — supply both directly to US markets and to global supply chains that feed US-bound production.
The Supreme Court ruling technically restores the pre-tariff legal status quo, which should benefit Singapore exporters facing reduced effective US tariff rates. However, the refund litigation does not directly translate to immediate relief for foreign exporters — refunds flow to US importers, not to the foreign suppliers who may have absorbed price adjustments under their supply contracts.
Sector Exposure Level Key Singapore Companies / MNCs in SG
Semiconductors / Electronics High Micron, GlobalFoundries, Applied Materials, Broadcom
Pharmaceuticals / Biomedical High Pfizer, GSK, Lonza, Novartis Singapore operations
Precision Engineering Medium ST Engineering, Venture Corporation
Chemical Products Medium ExxonMobil Chemical, Shell Jurong Island
Consumer / Retail Logistics Medium DHL, FedEx, UPS Singapore hubs
Financial Services (trade finance) Indirect DBS, OCBC, UOB trade finance portfolios
5.3 Supply Chain Reconfiguration
The 2025 tariff regime accelerated supply chain restructuring that was already underway following the COVID-19 pandemic and earlier US-China trade tensions. Singapore benefited from some of this reconfiguration, with multinational corporations increasing their use of Singapore as a value-added processing and regional distribution hub to manage tariff exposures. The Supreme Court ruling introduces renewed uncertainty: if tariffs are ultimately unwound, some of the supply chain investments made in Singapore on the premise of sustained tariff differentials may face strategic reassessment.
Conversely, Singapore’s role as a stable, rules-based jurisdiction with strong IP protections and a predictable regulatory environment becomes more valuable in an era of US trade policy volatility. Companies seeking supply chain resilience — the ability to pivot quickly when trade rules change — will continue to value Singapore’s logistics infrastructure and FTA network.
5.4 Financial Sector Implications
Singapore’s three domestic banks — DBS, OCBC, and UOB — have significant trade finance portfolios. The tariff regime created credit risk complications for exporters and importers operating in affected sectors, with some businesses facing cash flow strain from unexpected tariff liabilities. The litigation outcome — particularly a large-scale refund programme — could release liquidity for US importers that have been carrying tariff costs as sunk expenses, indirectly benefiting suppliers (including Singapore-based ones) that may have shared those costs under commercial agreements.
For Singapore’s asset management and capital markets sector, the ruling affects US equities in the retail, logistics, and consumer goods sectors — all represented in Singapore-listed ETFs and fund portfolios. The litigation uncertainty is a source of valuation noise for affected US corporates, with implications for portfolio managers in the region.
5.5 Policy and Diplomatic Dimensions
Singapore’s government has consistently advocated for a rules-based multilateral trading system and has been a vocal opponent of unilateral trade measures. The Supreme Court ruling — constraining executive tariff authority — aligns broadly with Singapore’s institutional preferences. The Singapore government’s public posture on US trade policy is necessarily calibrated, given the importance of the US-Singapore relationship (including the 2003 US-Singapore Free Trade Agreement), but the ruling reduces pressure on Singapore to engage in bilateral tariff-avoidance negotiations with Washington.
The Ministry of Trade and Industry (MTI) and Singapore’s trade promotion agencies (Enterprise Singapore) will likely use the ruling as a case study in export market risk management, reinforcing advisory guidance to SME exporters on contractual tariff-sharing provisions and the importance of diversified export market portfolios.
Singapore Policy Recommendation: Singapore exporters and logistics operators should monitor the DOJ’s 6 March 2026 filing and subsequent CIT case management orders. Those with contractual tariff-sharing arrangements with US importers should seek legal advice on whether refund flows trigger any contractual obligations or renegotiation rights under existing commercial agreements.
- Key Risks and Uncertainties
Several material risks could alter the trajectory outlined in this case study:
Risk 1. Congressional Countermeasure: Congress could legislate retroactive tariff authority, effectively mooting the refund claims. This is politically controversial but not constitutionally foreclosed.
Risk 2. Executive Non-Compliance: The administration could obstruct court orders, triggering a constitutional confrontation with the judiciary and potentially creating broader rule-of-law risk with implications for US trade credibility.
Risk 3. Fiscal Shock: A large-scale refund programme — even phased — represents an unbudgeted fiscal outflow. If markets price this as a deficit risk, there could be Treasury market implications.
Risk 4. New Tariff Architecture: The administration may respond by working with Congress to enact a new statutory tariff regime that achieves similar protectionist outcomes through constitutionally sound means, reinstating tariffs on a legislative basis.
Risk 5. Global Retaliation Unwinding: Trading partners that imposed retaliatory tariffs in response to US measures may — or may not — unwind those measures in response to the ruling, creating asymmetric trade liberalisation. - Conclusions
The February 2026 Supreme Court ruling on US tariffs marks a watershed moment in American trade law. It is not merely the resolution of a discrete policy dispute; it is a structural rebalancing of trade authority between the executive and legislative branches, with lasting implications for how US trade policy is made, challenged, and constrained.
For the business community — in the United States and globally — the ruling validates the role of domestic litigation as a check on executive trade overreach. The participation of major corporations such as FedEx signals that the refund litigation is no longer the preserve of aggrieved SMEs; it has become a mainstream corporate legal strategy with board-level legitimacy.
For Singapore, the ruling’s effects are mixed but broadly constructive. Reduced US tariff pressure benefits Singapore’s export-oriented manufacturing sectors and reinforces Singapore’s competitive position as a stable supply chain hub in an era of US trade policy volatility. However, the litigation uncertainty itself — and the potential for new legislative tariff regimes — means that Singapore businesses should not interpret the ruling as a permanent resolution of US trade policy risk.
The US$170 billion refund question will take years to fully resolve. What is already clear is that the architecture of US unilateral trade authority has been fundamentally, and probably irreversibly, reshaped.
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