WASHINGTON — Affiliates of at least nine major Japanese corporations, including Toyota Tsusho Corp. and Sumitomo Chemical Co., have filed lawsuits in a New York federal court demanding full refunds for millions of dollars in additional tariffs paid on imports this year. The companies argue that President Donald Trump’s “reciprocal” tariffs, imposed unilaterally under the International Emergency Economic Powers Act (IEEPA) without congressional approval, are unlawful and exceed the president’s authority.
The lawsuits were filed with the U.S. Court of International Trade shortly after the Supreme Court heard oral arguments on November 5, 2025, in a landmark case challenging the legal foundation of the tariffs. The Japanese firms are acting preemptively, concerned that even if the Supreme Court ultimately strikes down the tariffs as unconstitutional, the U.S. government might not automatically refund duties already collected.
The companies’ core argument is that the 1977 IEEPA, while granting the president broad powers to regulate commerce during declared national emergencies, does not authorize the imposition of broad-based import tariffs. Lower courts have already ruled against the administration on similar grounds, holding that only Congress has the constitutional authority to impose taxes and duties.
In April 2025, President Trump declared the persistent U.S. trade deficit — exceeding $1 trillion annually — a national emergency under IEEPA and imposed a baseline 10% tariff on nearly all imports, with higher “reciprocal” rates (up to 50%) on countries whose tariffs on U.S. goods he deemed unfair. Japan, initially threatened with a 24–25% rate, was among the hardest hit. By late summer, the tariffs had generated roughly $200 billion in revenue, though they have also driven inflation, disrupted supply chains, and failed to meaningfully reduce the trade deficit.
In July 2025, Tokyo negotiated a partial reprieve: Japan pledged $550 billion in new investments in strategic U.S. sectors — including semiconductors, critical minerals, pharmaceuticals, and shipbuilding — over several years in exchange for a reduced baseline tariff of 15% on most Japanese goods entering the United States. The deal included exemptions for aircraft, natural resources, and generic drugs, as well as commitments by Japan to increase purchases of U.S. agricultural products and defense equipment. Despite the agreement, many Japanese companies continued to face significant additional costs under the 15% levy.
The Supreme Court hearing on November 5 revealed deep skepticism across the ideological spectrum. Chief Justice John Roberts emphasized that the power to tax belongs exclusively to Congress. Justices Neil Gorsuch and Elena Kagan questioned whether chronic trade imbalances qualify as the kind of “unusual and extraordinary threat” IEEPA was intended to address. Even some conservative justices expressed concern that the administration’s interpretation could allow future presidents to impose taxes unilaterally on virtually any pretext.
With a decision expected by early 2026, the Japanese affiliates — joined by U.S. companies such as Costco Wholesale and Revlon — are seeking court orders to preserve their right to refunds. They fear that without such orders, U.S. Customs and Border Protection could finalize (“liquidate”) the duties before any Supreme Court ruling takes effect, permanently barring reimbursement.
The White House has brushed off the lawsuits, insisting the tariffs are essential for national security and economic fairness. Administration officials argue that the measures have curbed illegal immigration and fentanyl trafficking while boosting domestic manufacturing — claims disputed by most independent economists.
For Japanese firms, the financial stakes are enormous. Toyota Tsusho, a global trading giant, and Sumitomo Chemical, a major supplier of industrial materials, have each paid tens of millions in extra duties since the tariffs took effect. Other plaintiffs include Ricoh, Kawasaki Motors, and Hitachi. Collectively, the companies argue that absorbing these costs indefinitely would erode competitiveness and threaten jobs on both sides of the Pacific.
A Supreme Court ruling invalidating the tariffs could force the repayment of up to $200 billion in collected duties and set a major precedent limiting presidential emergency powers in trade policy. It might also jeopardize the U.S.–Japan investment agreement, giving Tokyo grounds to scale back or redirect its $550 billion commitment.
As more companies file similar complaints — now exceeding 20 in total — the legal battle has evolved into a broader corporate and international pushback against unilateral executive action on trade. Whatever the court decides, the outcome will reshape U.S. trade relations, influence global supply chains, and define the limits of presidential authority in economic policy for decades to come.
