Extract from ABC News
Donald Trump, pictured preparing for a press conference after the court ruling, was said to be "seething". (AP: Alex Brandon)
The US's highest court has struck down a key plank of Donald Trump's economic policy.
It found that tariffs he placed on foreign imports were illegal.
It's a hugely consequential decision that has infuriated the president.
He is now promising to find ways around it.
How did this happen?
Under the US Constitution, Congress has the power to impose tariffs, rather than the president.
But Mr Trump thought he had found a way to give himself the authority to impose tariffs without Congress.
Last year, he declared two national emergencies.
One was a "public health crisis" caused by illegal drugs such as fentanyl.
The other related to "large and persistent" trade deficits.
The White House argued the emergency declarations meant Mr Trump could bring in "emergency tariffs" under the International Emergency Economic Powers Act (IEEPA).
First, he placed so-called "fentanyl tariffs" on imports from China, Mexico and Canada. He said this was to pressure those countries to do more to stop drug smuggling.
He later announced "reciprocal tariffs" on imports from almost every other country. He said these were to address trade deficits.
But a group of businesses and a dozen US states sued.
They argued Mr Trump could not give himself the power to impose tariffs by declaring emergencies.
What happened in court?
Before the Supreme Court ruled on the matter, a decision was made in the US Court of International Trade.
It agreed with the suing businesses and states and found Mr Trump's emergency tariffs were illegal.
An appeals court paused that ruling a day later, and the tariffs were reinstated.
But the Supreme Court has now endorsed the trade court's original decision. "IEEPA does not authorise the president to impose tariffs," the Supreme Court found.
Not everyone in the court agreed. Three of the nine justices dissented.
"The tariffs at issue here may or may not be wise policy," Justice Brett Kavanaugh wrote.
"But as a matter of text, history, and precedent, they are clearly lawful."
Have all of Trump's tariffs been struck down?
The decision relates only to the tariffs Mr Trump implemented under emergency orders.
Basically, that means the country-specific tariffs — such as the 10 per cent tariff on Australian imports — have been struck down.
But tariffs on certain types of products — including aluminium, steel, copper, wood, vehicles, auto parts and furniture — are unaffected. Mr Trump used different legislation to bring in those tariffs.
"Roughly speaking, what you should expect going forward is there will be tariffs on things rather than tariffs on countries," said Justin Wolfers, an economics professor at the University of Michigan and visiting professor at the University of NSW.
How has Trump responded?
Angrily. The decision was "ridiculous" and the justices who made it were "very unpatriotic and disloyal to our constitution", he said.
After the ruling, he signed an order for a new 10 per cent tariff on many foreign imports.
He did so under a section of trade law that allows him to impose tariffs of up to 15 per cent for 150 days.
He has pledged to find workarounds to bring more tariffs back permanently.
"Other alternatives will now be used to replace the ones that the court incorrectly rejected," he told a press conference. "We have alternatives. Great alternatives."
US Trade Representative Jamieson Greer said those alternatives would include running fast-tracked investigations under Section 301 of the Trade Act.
It allows the president to impose tariffs on countries if investigations find those countries are treating the US unfairly.
Mr Greer said:
"We expect these investigations to cover most major trading partners and to address areas of concern such as industrial excess capacity, forced labour, pharmaceutical pricing practices, discrimination against US technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products.
"… If these investigations conclude that there are unfair trading practices and that responsive action is warranted, tariffs are one tool that may be imposed."
Why doesn't Trump ask Congress to authorise tariffs?
Republicans have control of Congress — but only just.
Their slim majority in the House of Representatives means every Republican must vote for a bill in order to pass it, assuming all members are present and no Democrats vote for it.
That's unlikely to happen. In February, six House Republicans broke ranks to vote against tariffs on Canadian goods.
It was a symbolic vote, but it shows tariffs do not have universal support in the party.
What does this mean for Australia?
The 10 per cent "baseline" tariff on Australian imports is gone.
It has been replaced by another 10 per cent tariff, imposed under Section 122 of the Trade Act.
But that law means it can only stay in place for 150 days.
Professor Wolfers said Mr Trump had lost a tool he was using to pressure other countries to bend to his will.
He gives this example:
"The president could try to call the Australian prime minister and say, 'Do what I want or else I'll impose tariffs on Australia'. And Albo would say, 'You can do it for 150 days. I can outwait that, mate. You don't have much leverage.'"
Donald Trump says he will find alternatives to the cancelled tariffs. (Reuters: Elizabeth Frantz)
Will tariff money need to be refunded?
This is unclear. But importers that have paid the tariffs are expected to take legal action to claw them back.
The court ruling did not give clear guidance on refunds.
But Justice Kavanaugh, in his dissenting opinion, addressed it:
"The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others.
"As was acknowledged at oral argument, the refund process is likely to be a 'mess.'"
Could Australian companies receive refunds?
Tariffs are paid by the companies that import a product, rather than those that export it.
So, companies operating in the US would be the ones eligible for a refund.
But some Australian exporters establish American subsidiaries to facilitate trade into the US.
"So, it's that subsidiary business that will be entitled to the refund," said Luke Branson, regional global trade leader for Oceania at Ernst & Young.
He said some Australian exporters had also made agreements with US importers to split tariff costs.
"Now, if an Australian exporter has shared some of that tariff cost through a commercial arrangement, they should obviously be seeking to recoup some of that."
EY Australia found Australian companies could be owed $1.4 billion in refunds.
How could refunds be given?
There are processes already in place for refunding tariffs charged in error.
They include "post summary corrections" and "protest" processes through US Customs and Border Protection (CBP).
"Businesses should assess which of these two buckets they best fall into and prepare their submissions accordingly in advance of further information from the US courts around how to deal with these refunds," Mr Branson said.
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