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.

Within hours of the Supreme Court ruling, the President announced a new 10% global import surcharge – another tariff – on goods imported to the U.S., and he signed a proclamation enacting these tariffs, which will be in effect from 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. As of April 20, 2026, businesses could begin the process of requesting a refund.

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 had already begun legal action against the 2025 and 2026 illegal tariffs.

The total amount of money collected through illegal tariffs differs depending on the source, but many reports estimate the figure between $130 million and $170 million. U.S. Treasury data shows that $240 billion to $287 billion has been raised by tariffs since April 2025. The system for handling the 330,000 importers who paid illegal tariffs and are eligible for refunds was established by the U.S. Customs and Border Protection agency.

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 nor does it take into account the price of goods and energy that skyrocketed after the president started a war with Iran that led to the shutdown of Straight of Hormuz, ultimately impeding the shipment of goods throughout the world. The U.S. inflation rate in March 2026 was 3.3%, an increase of nearly one percentage point since February, with energy prices spiking 12.5%, 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 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 the Paychex THRIVE business podcast, Gene Marks, offered some insights on a recent Week 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 a full 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 keep winning 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.”