The "tariff exemption" policy has been overturned, and Illinois is suing the Trump administration for $868 million.

When the U.S. Supreme Court overturned the Trump administration’s tariff authority earlier this month, Illinois was the first state to take action. Governor JB Pritzker issued a claim demanding a total of $8.679 billion in compensation, challenging the legality of the “pembebasan” (liberation) policy. This bill amounts to an average of $1,700 per household statewide—a striking figure and a vivid illustration of the conflict between federal power and state interests.

How the Supreme Court Overturned the “pembebasan” Tariff Authority

On April 2 last year, Trump declared this day as “Hari Pembebasan” (Liberation Day), launching the most aggressive expansion of tariffs in modern U.S. history. He cited the 1977 International Emergency Economic Powers Act (IEEPA) to impose broad retaliatory tariffs on key trading partners like Canada, Mexico, and China. The argument was based on the claim that trade deficits constituted a national emergency.

However, on February 20, the Supreme Court rejected this authority with a 6-3 majority. Chief Justice John Roberts explicitly stated in the ruling, “We hold that the International Emergency Economic Powers Act does not grant the President the authority to impose tariffs.” This decision directly invalidated all tariffs based on the IEEPA, including the 25% tariffs on Canadian and Mexican imports, expanded measures against Chinese goods, and the 10% retaliatory tariffs applied across multiple countries.

Pritzker argues that since the Supreme Court has ruled these tariffs unconstitutional, all costs collected under them should be refunded to the taxpayers who bore the burden.

How Illinois Calculated the $8.679 Billion Bill

In an open letter to Trump, Pritzker detailed the bill: Illinois has 5.105 million households, each paying an average of $1,700 in tariffs, totaling $8,679,261,600. He sent a formal letter along with a stamped invoice marked “Due—Overdue,” with firm language.

In the letter, Pritzker wrote, “Your tariff policies have caused chaos for farmers, angered our allies, and driven up food prices. This morning, your own appointed Supreme Court justices told you these tariffs are unconstitutional.” He then added a warning: “This letter and the attached invoice serve as formal notice that compensation must be paid to the people of Illinois. If you do not comply, we will take further action.”

The invoice note bluntly states: “Illinois families are paying the price for illegal tariffs—in grocery stores, hardware stores, and at the dinner table. Tariffs are taxes, and working families are footing the bill.”

Why Illinois Is Suffering the Most

Illinois did not choose this number arbitrarily. The state has a highly diverse and globalized economy. According to NPR Illinois, the state conducts over $127 billion annually in trade with Canada, Mexico, and China—precisely the main targets of the tariff policies.

The state’s economic structure makes it particularly vulnerable. Illinois is a major U.S. agricultural exporter, a manufacturing hub, and has significant logistics and distribution infrastructure centered around Chicago. Tariffs on imported goods directly increase costs for local manufacturers reliant on imported parts, retaliatory tariffs threaten agricultural exports, and tariffs on consumer goods push up everyday prices.

According to the Illinois Department of Agriculture, the state’s agriculture sector—especially soybeans and feed grains—faces significant risks from retaliatory tariffs. As one of the leading U.S. agricultural export states, these potential losses are especially severe. A model from the University of Pennsylvania Wharton School estimates that over 75% of the costs caused by tariffs are ultimately passed on to consumers, rather than absorbed by foreign exporters.

White House Response and Legal Standoff

The White House quickly responded to Pritzker’s claim. A spokesperson said, “Illinois’s high taxes and heavy regulation are comparable to JB Pritzker’s own personal wealth inflation.” The spokesperson further sarcastically added that if Pritzker truly cared about economic relief for Illinois, he should start by fixing his own state government.

However, the Supreme Court’s ruling did not entirely close the door on Trump’s tariff powers. While the IEEPA route was blocked, the President can still impose tariffs under Section 122 of the 1974 Trade Act. In fact, shortly after the ruling, Trump signed a new executive order imposing a 10% global tariff under Section 122. This means that although the legal basis for “pembebasan” has been overturned, broader tariff strategies continue under different legal grounds.

According to the Wharton School’s estimates, over $175 billion in U.S. tariff revenue could be at risk, as companies may now seek refunds claiming the tariffs exceeded legal authority. This figure was first reported by Reuters and highlights the potential economic scale of this legal confrontation.

Illinois’s actions may set a precedent for other states suffering similar tariff impacts. While most states have not yet precisely calculated damages like Pritzker, this federal-state confrontation is shaping the future of tariff policies and potential refund rights for businesses.