Manufacturing firms enter ‘war room’ mode after Supreme Court strikes down tariffs

Story Highlights

• The U.S. Supreme Court struck down President Donald Trump’s tariffs in a 6-3 decision Friday.

• Silicon Valley hardware manufacturers face supply chain volatility and potential refund claims from tariffs.

• Spencer Penn, CEO of San Francisco-based LightSource, expects executives to hold war room meetings.

Silicon Valley hardware and manufacturing firms moved into “war room” mode Friday after the U.S. Supreme Court struck down President Donald Trump’s sweeping tariffs, prompting executives to reassess supply chains and potential refund claims.

In a 6-3 decision Friday, the court ruled that tariffs imposed under the International Economic Emergency Powers Act were unlawful. The court said Congress — not the President — holds the power to levy taxes, including import duties.

The ruling voids broad tariffs applied to dozens of countries. And it could open the door to significant refund claims, though the process for recovering those funds remains unclear.

Procurement Specialist Spencer Penn said many hardware and manufacturing companies are less focused on immediate cost relief and more concerned about volatility.

“Volatility is more dangerous than cost,” said Penn, CEO and co-founder of the San Francisco-based procurement platform LightSource, which works with automotive, medical device and electronics manufacturers.

Over the next several days, Penn said he expects executives across the Bay Area to hold what he described as “war room” meetings to measure and assess the impact of the ruling before they take action.

Companies typically move through three phases: measuring exposure, assessing scenarios and mitigating risk, whether by changing suppliers, redesigning components or seeking duty refunds. But even with the Supreme Court decision, many businesses remain in wait-and-see mode.

“The question now is what happens next,” Penn said, noting that companies are watching to see whether Congress or the Trump administration pursue alternative trade measures.

Penn added that tariffs tend to hit low-margin businesses hardest, where material costs make up a larger share of the final selling price.

But for many Silicon Valley tech manufacturers, he said, the bigger concern is access to key components and rare earth materials, much of which remains concentrated in China. These materials are essential for semiconductors, batteries and advanced electronics.

For now, Penn said, most companies are focused less on celebration and more on clarity.

“This ruling may slow trade policy down and make it more predictable,” he said. “That’s generally good for business. But companies are still going to assess before they act.”

How Congress and the White House respond in the coming weeks will determine whether that clarity holds or whether businesses once again have to recalibrate.