Courts keep striking down tariffs. Why aren't prices dropping too?

A federal court blocked President Donald Trump’s 10% tariffs on May 7, ruling that his February decision to impose them under Section 122 of the Trade Act of 1974 was unlawful. The Court of International Trade’s 2-1 decision prevents the administration from collecting these tariffs from Washington state and two companies that sued, though the levies will stay in place for most importers until appeals conclude. U.S. Trade Representative Jamieson Greer confirmed the administration will appeal, arguing Trump’s policy remains unchanged despite legal setbacks. The ruling follows the Supreme Court’s February decision striking down broader tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Economists, including Boston College’s Brian Bethune, doubt the appeal will succeed, calling it a low-probability strategy. Bethune noted that previous IEEPA tariffs were also invalidated, making this legal challenge unlikely to succeed. Despite the setback, the administration retains options to impose tariffs through Section 301 of the 1974 Trade Act, which allows investigations into foreign trade practices. Greer has already launched probes into several countries and the European Union, suggesting tariffs could persist or even increase. Analysts like Drew DeLong of Kearney Foresight predict effective tariff rates could match or exceed 2025 levels by year’s end if investigations proceed as planned. Refunds for importers who paid IEEPA duties are set to begin this month, but lower consumer prices are not guaranteed. Ongoing conflicts, such as the Iran war, continue to disrupt global supply chains, offsetting potential savings from reduced tariffs. The legal and economic uncertainty leaves the future of U.S. trade policy—and its impact on prices—unclear.