US customs to halt tariff collection deemed illegal by SC after February 24

The US Customs and Border Protection (CBP) agency will stop collecting tariffs imposed under the International Emergency Economic Powers Act from February 24, after it was deemed illegal following a Supreme Court's 6-3 ruling on Friday. The Customs and Border Protection agency will invalidate all the tariff codes associated with the Cargo Systems Messaging Service. However, the halt does not affect any other tariffs imposed by the US President Donald Trump under section 232, national security of the state and section 301, unfair trade practices.

According to a report by Reuters, a notice was sent to shippers through its Cargo Systems Messaging Service (CSMS), stating that, from Tuesday onwards, it will deactivate all tariff codes linked to all of President Donald Trump's IEEPA order. The halt specifically ends all reciprocal tariffs and punitive duties linked to India's purchase of Russian oil, which had earlier pushed India's tariff to 50 per cent.

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The IEEPA tariff collection coincides with US President Donald Trump's imposition of a new 15 per cent global tariff under a different legal authority to replace the tariff struck down by the Supreme Court on February 20. However, CBP did not provide any reason why it continued to collect tariffs after the SC ruling, and it did not provide any possible hint at a refund.

“CBP will provide additional guidance to the trade community through CSMS ‌messages as appropriate,” read the message from the Cargo Systems Messaging Service.

Following the SC ruling the Reuters reported that the SC decision will have the possibility of making $175 billion in US tariff revenue as refunds. According to the estimates by Penn-Wharton Budget Model economists, the IEEPA tariffs were generating a daily gross revenue of $500 million.