Tariffs: What Should Businesses Know and Plan For After Decisions By Multiple Courts?

Employers who have been taxed by the experience of working with non-U.S. suppliers in the past few years might be familiar with making short-term and long-term business decisions regarding tariff policies. Since April 2, 2025, 190 countries and territories had tariffs placed on their goods coming into the U.S.; some as high as 125% while others were a more favorable 15%.

In late February, the U.S. Supreme Court ruled that the majority of tariffs implemented in 2025 and 2026 under the International Emergency Economic Powers Act (IEEPA) are illegal, giving businesses welcome relief.

It took the President only hours after the Supreme Court ruling to announce a new 10% global import surcharge – another tariff – on goods imported to the U.S., and he signed a proclamation enacting these tariffs, which went in effect Feb. 24, 2026, through July 24, 20026.

It’s a lot to absorb as the imposed tariffs change, and they remain a major challenge for businesses. However, the Court of International Trade ruled that the government must refund any money collected under the illegal tariffs. The federal government indicated it would appeal but ultimately decided not to do so.

The back-and-forth rates and the uncertainty of the tariff landscape continue to have ripples on Wall Street and in the marketplace, and questions abound: What will happen when the new tariffs expire? How will this affect the economy and inflation? Even the basic question: What are tariffs?

How Are Tariffs Impacting Businesses?

The tariffs implemented Feb. 24, 2026, under section 122 of the Trade Act of 1972 – except for tariffs already in place under section 232 of the 1964 Trade Expansion Act – can only stay in effect for 150 days without Congressional approval. Businesses have already begun legal action against the 2025 and 2026 illegal tariffs. Companies such as Federal Express are demanding refunds in the millions.

U.S. Treasury data shows that $240 billion to $287 billion has been raised by tariffs since April 2025. At present, reports are that the U.S. Customs and Border Protection agency must devise a plan to refund billions of dollars to more than 330,000 importers from tariffs collected illegally.

Businesses that lose money don’t stay in business very long, so despite some owners absorbing part of the tariff costs for nearly a year, in the end that bill got passed to consumers. In 2026, the tariffs will reduce after-tax incomes for all income groups. The top 1 percent will see a smaller reduction in after-tax income compared to others. Per U.S. household, according to the Tax Foundation, the tariffs altogether will amount to an average tax increase of $1,000 in 2025 and would have been a $1,300 average tax increase in 2026. However, with the IEEPA tariffs being ruled illegal, the tax increases will be smaller at $400 in 2026 for the Section 232 tariffs. The 10 percent Section 122 tariffs would increase the tax burden to $600.

Notably, these averages do not capture additional costs to U.S. households stemming from higher-priced alternative goods and loss of consumer choice.

The degree of impact on the job market is starting to show in the numbers with theU.S. Bureau of Labor Statistics reporting nonfarm jobs at plus 130,000 in January 2026, revised down by 4,000. This proceeded the downward revision by 65,000 of nonfarm jobs reported in December 2025, to a negative 17,000. For comparison, before all the IEEPA tariffs went into effect in April 2025, the BLS showed an increase of 228,000 nonfarm jobs in March.

The U.S. inflation rate in January 2026 rose 2.4%, down 0.3% from a December spike of 2.7%, according to data released by the government.

Employers should keep an eye on the job market trends and any economic shifts, continue consulting with their advisers, and be prepared to make changes that suit their business needs.

Tips To Manage the Costs and Impacts of Tariffs

Moving forward, employers can begin preparing a response to tariffs, starting with taking a breath every time a new tariff is announced. By staying out of the emotionality of the moment and keeping an eye on the big picture, employers might spare their business a roller-coaster ride.

Employers should understand the evolution of tariffs. Owners can prepare by reviewing and evaluating current processes impacting all costs of business.

Small business owner and host of thePaychex THRIVE business podcast, Gene Marks, offered some insights on a recentWeek in Review episode that businesses can take to minimize any impact. Here are a few of his suggestions, plus HR strategies from Paychex HR professionals that could help your business survive and hopefully succeed in this new economic environment:

• Use free trade zones or bonded warehouses: Employers will not incur the tariff until goods shipped to these places are removed from the premises.
• Work with organizations familiar with trade: Certain organizations, including the Export Import Bank and Small Business Association, provide free consulting on overseas trade.
  • Tips from a Paychex HR Professional: “We recommend conducting afull budget review to identify non-essential costs that can be trimmed, while still trying to keep your business stable and employees supported,” said Lisa Reyes, HR Strategy and Talent Partner with Paychex. “This could free up additional capital to afford any potential current or new tariffs.”
• Review your supply chains: With the potential for renegotiations to change the landscape, employers potentially can lessen the uncertainty by developing three- to six-month alternative strategies for goods provided by key vendors.
  • Tips from a Paychex HR Professional: “Employers should look at any vulnerabilities in their supply chain, especially where dependence on a specific supply is present,” said Megan Burdett, HR Strategy and Talent Partner with Paychex. “Shipment delays, material and product shortages, and increased tariffs impact budgets and cash flow.”
    • “Research the domestic supply chain, where businesses might find better costs or more reliable delivery,” Burdett said
• Rethink your overhead costs: If employers can reduce or eliminate unnecessary expenses, the money saved can be used to lessen the price increase passed on to consumers.
  • Tips from Paychex HR Professional: “The constant goal is to keepwinning the talent war,” Reyes said. “Benefits are drawing cards for talent, so focus on keeping those in place such as a 401(k) program. However, the business can save on some costs by suspending a company match while the business works through the current tariff environment. This helps businesses balance its short-term and long-term goals.”
    • “Another consideration to trim overhead is to conduct a review of the overtime taken and adjust if it can be limited temporarily,” Reyes said.

If tariffs impact your ability to grow the business in the short term, business owners have options.

“An employer could consider a hiring pause,” Burdett said. “During that time, they can develop the talent they have on hand by either upskilling people for different roles and responsibilities or cross-skilling people from different teams.”