VIRGINIA LAWYERS WEEKLY (March 23, 2026)

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                                                      Volume 40, No. 43, Page 3 (March 23, 2026)

TRUMP’S TARIFF AND TRADE POLICY – REFUNDS AND CHAOS.

                                                             Stuart S. Malawer, J.D., Ph.D.

The United States faces a staggering bill: more than $200 billion in tariffs that the Supreme Court has ruled were illegally collected. What began as an improvisational tool of political pressure has evolved into a sprawling legal and financial crisis. Courts, businesses, and states are now scrambling to untangle a mess that threatens supply chains, trade credibility, and the rules-based system the country once championed.

Litigation is proliferating on multiple fronts. States have sued the federal government. Importers—many large retailers—have sued for reimbursement. Smaller retailers, in turn, are filing suits against the original importers of record in so-called consumer actions. Plaintiffs are seeking class-action status, potentially multiplying government liability and drawing still more businesses into the fray.

This outcome is hardly accidental. It is the predictable consequence of weaponing tariffs as a tool in geopolitics and geoeconomics. The effects are already being felt in states such as Virginia, which depend heavily on port traffic, agricultural exports, imports (fertilizers) and foreign investment.

During his presidency, Trump wielded tariffs less as part of a coherent trade policy and more as a blunt, often impulsive instrument of personal pique and political pressure. The result was an unpredictable tax on American businesses and consumers—one that rattled supply chains, roiled financial markets, and strained alliances. Now the bill is coming due amid heightened economic and political uncertainty.

Global events, such as war with Iran, add further volatility to oil, gas, financial markets, and global business strategies, amplifying the disruption beyond the tariff wars themselves.

The legal battle over tariff refunds is intensifying. States and private firms have filed a stream of suits demanding that the government comply with court orders requiring the return of unlawfully collected tariffs, immediately. The administration’s response—primarily through the Departments of Treasury and Justice—has consisted largely of procedural delays. Congress, despite periodic warnings to reclaim its constitutional authority over trade and taxation, has remained on the sidelines.

Federal courts have recently served as a critical check on the executive’s overreach in several areas, for example, use of the national guard and immigrant detention policies.  The U.S. Supreme Court ruled against the administration’s global tariffs, despite public attacks on the justices. Subsequently, the U.S. Court of Appeals for the Federal Circuit refused to stay refunds and returned the matter to the U.S. Court of International Trade, which ordered that refunds proceed. The Justice Department has sought additional delays, buying time while aggravating uncertainty for consumers, businesses and states alike. The U.S. Court of International Trade is now the center of this litigation.

Meanwhile, the administration has explored new legal pathways to impose even newer tariffs despite the Supreme Court decision. A new 20% tariff was imposed under Section 122 of the Trade Act of 1974, which allows temporary duties to address balance-of-payments problems. But the United States does not face a true balance-of-payments crisis. While the country runs a significant trade deficit, its overall balance-of-payments deficit—including international investment flows—is modest, a distinction the administration ignored.

Other statutory avenues remain also available to the president. Section 232 of the Trade Expansion Act of 1962 allows tariffs on national security grounds, while Section 301 of the Trade Act of 1974 authorizes duties following investigations into unfair trade practices, which the president just initiated against 16 of our trading partners. Both mechanisms, however, involve procedural requirements and institutional reviews, making them far less nimble than the International Emergency Economic Powers Act, which was invoked by Trump and struck down by the Supreme Court. Traditional trade remedies—anti-dumping, countervailing duties, and Section 201 “escape clause” actions—also remain on the books for specific economic contingencies.

An entire legal and financial ecosystem is emerging around this tariff turmoil. Law firms are developing specialized practices devoted to tariff refunds, customs liquidation procedures, and litigation strategies tied to evolving court rulings. Hedge funds are purchasing claims from importers, effectively creating a secondary market that bets on eventual recovery of tariff payments.

From the perspective of someone who has spent decades teaching international trade law and national security law, the misuse of statutory trade provisions for geopolitical theatrics is deeply troubling. Tariff laws were designed to address specific economic concerns—unfair trade practices, national security risks, or balance-of-payments crises—within a broader, rules-based multilateral trading system. They were not meant to serve as a president’s all-purpose, often whimsical, geopolitical instrument. Yet that is precisely what they have become.

The broader consequences of Trump’s actions are only beginning to unfold. Massive refund liabilities, new tariffs imposed through alternative legal channels, unsettled trade agreements, and disrupted supply chains.  These are already injecting instability into state, national, and global commerce. The ripple effects extend beyond domestic and international markets, affecting diplomacy, investment, global stock markets, and global economic development. The Iran war will most certainly greatly exacerbate the global chaos.

As these tariff and trade disputes continue to wind through U.S. courts, trade and tariff policies are becoming a volatile issue in upcoming midterm elections. What began as a strategy of economic brinkmanship could ultimately become a significant political liability—not only for the president who embraced it but also for lawmakers who failed to check it.

The United States once prided itself on maintaining a predictable, rules-based trading system grounded in both domestic and international law. That system is now at risk. If trade policy, involving both tariffs and trade sanction, becomes an instrument of improvisation rather than law, the consequences will extend far beyond tariffs—to diplomacy, investment, and global economic leadership. Rebuilding confidence will require rejecting unilateralism and protectionism and recommitting to the international system the United States helped construct and led in the aftermath of the last century’s economic and political crises of the Great Depression, World War Two and the Cold War.

I remain convinced that, with rational policies based in reality, discipline and adherence to law, it is possible to restore that system—and with it, U.S. credibility and leadership on the global stage.

Stuart S. Malawer, J.D. (Cornell), Ph.D. (Penn), is the distinguished service professor of law and international trade emeritus in the Schar School of Policy and Government at George Mason University. He is a former chairman of the International Practice Section of the Virginia State Bar and has been honored by a Virginia Senate resolution for public service upon his retirement and the Virginia Supreme Court for his pro bono legal work. Previously, he received George Mason University’s Distinguished Faculty Member of the Year Award. Dr. Malawer is a former gubernatorial appointee to the Virginia Economic Development Partnership Board of Directors and the Advisory Committee on International Trade and has been a delegate on various Virginia gubernatorial trade missions to Asia. He is a member of the Bar of the U.S. Court of International Trade. StuartMalawer@msn.com.