On February 20, 2026, the United States Supreme Court declared unlawful the IEEPA global tariffs President Trump unilaterally imposed upon his return to office in 2025. In a divided decision, Learning Resources, Inc. v. Trump (No. 24-1287), six of the nine justices held that the President lacked authority to impose tariffs on imported goods under the International Emergency Economic Powers Act (IEEPA).
The Court’s decision clearly settled the issue (that was never really contested) that a tariff or duty is a tax and that only Congress has the Constitutional authority to impose taxes. The Court also clearly stated that in some circumstances Congress can delegate its authority to impose duties to the President, but that it did not do so in enacting IEEPA.
The Administration’s response to the Court’s decision has also provided both clarity and uncertainty. The clear statement from the President, both by Executive Orders and during the State of the Union, is that the Administration’s policy of imposing tariffs is not going to change. On the day the Supreme Court issued its decision, the Administration issued an Executive Order ending the collection of the IEEPA tariffs, which Customs and Border Protection (CBP) announced would occur at 12:00 a.m. on February 24th. At the same time, the President issued another Executive Order imposing a ten percent (10%) surcharge on all worldwide imports, which Customs announced would be effective at 12:01 a.m. on February 24th. He and Administrative representatives have subsequently announced that the rate would increase to fifteen percent (15%). However, as of March 8, 2026, that has not occurred.
What remains unclear is whether and how importers who paid the IEEPA tariffs will be entitled to or receive refunds. The Supreme Court’s majority decision failed to address the issue. As discussed further below, the Court of International Trade (CIT), by way of contrast, has said that all importers who paid IEEPA tariffs are entitled to refunds. However, the Administration has been vague in its comments about refunds and in official court filings has suggested that it may take weeks for Customs to develop a possible mechanism to process refunds. In the interim, as recently as March 6th, 2026, there have been media reports that Customs is denying current importer requests for IEEPA refunds.
The Trump Administration will continue to use tariffs as a policy tool
As recognized by the Supreme Court, there are many statutes in which Congress has delegated its authority to impose duties on imported goods to the President. For example, Section 122 allows the temporary imposition of tariffs up to 15 percent to address balance of payment issues, however, only for 150 days, after which Congress must reauthorize them. Section 232 allows the imposition of tariffs on imports for national security grounds, but only after an investigation and report by the Secretary of Commerce. Section 301 authorizes the President to impose tariffs on unfair and discriminatory trade practices, but again only after a USTR investigation and report.
By way of contrast, IEEPA has no prior investigation or procedural restraints on when and how the President can exercise his authority. Thus, in seeking to impose tariffs due to the importation of illegal drugs and “large and persistent” trade deficits, the Administration chose to rely on IEEPA to implement its trade policy. As noted by the Supreme Court, the Administration interpreted language in the statute allowing the President to “regulate … importation” as allowing the President to impose, increase, reduce, and modify tariffs at will and without following any regulatory procedures. This included shifting sets of goods into and out of the reciprocal tariff framework at will. As noted by the Court, the rate increases for goods from China increased from 34% to 84% in less than a week, only to increase further to 125% the next day.
While the majority of the Supreme Court agreed with the two lower courts that found that since IEEPA did not mention tariffs or duties the President did not have this authority, it should be noted that four dissenting appellate court judges, and three dissenting Supreme Court justices, agreed with the President that the tariffs he imposed under IEEPA were lawful.
While the IEEPA tariffs are unlawful, since returning to office President Trump has also relied on Section 232 to impose and increase tariffs on specific types of goods, such as metals (aluminum, copper, steel) and auto parts. Similarly, he has relied on Section 301 tariffs to address unfair trade practices by China and in Shipbuilding. These tariffs were not part of the Supreme Court lawsuit and remain intact. The authority of Presidents to impose tariffs under these statutes are on more solid legal ground. While they have limitations on the tariffs that can be imposed, and require adherence to specific statutory procedures, the Administration is expected to continue to use both laws in an effort to rebuild and recreate the tariff structures it imposed under IEEPA.
The President took first steps in this direction when on February 20, 2026, he announced that the unlawful IEEPA tariffs would be replaced by the Section 122 tariffs. The legality of the 122 tariffs has already been legally challenged by a coalition of twenty-four (24) States in a lawsuit filed on March 5, 2026, at the CIT on the grounds that the statute was intended to address balance of payment issues, which are technically not possible with a floating currency such as the U.S. dollar.
The States also allege that Section 122 requires that tariffs “be applied consistently with the principle of non-discriminatory treatment” and “of broad and uniform application with respect to product coverage” and that the President’s new Section 122 tariffs violate this rule by exempting many goods from Canada, Mexico, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
While the courts allowed the IEEPA tariffs to remain in effect pending appeals of the initial lower court decisions finding them unlawful, now that the Supreme Court has spoken on IEEPA it is possible that the lower courts and any appellate courts hearing the new challenges to the Section 122 tariffs may decide to pause their collection if the CIT finds that they are not legal and an appeal is taken of that decision.
As a practical matter, if not enjoined by the courts the Section 122 tariffs will only be in effect until the end of July. While Congress may choose to renew them, that is a questionable political prospect in an election year. However, while lower than many IEEPA tariffs, the Section 122 tariffs do provide a global base framework for the Administration while it transitions to other forms of tariffs.
De Minimis
An additional sign that the Supreme Court’s decision will not significantly alter the Administration’s trade policy is the fact that on February 20, 2026, President Trump issued a new Executive Order continuing the suspension of the exemption and that he did so, in part, relying upon IEEPA. The Supreme Court’s decision did not involve the President’s suspension of de minimis for China in the Spring of 2025 or worldwide in August 2025. The de minimis exemption is governed by a different law. While legal challenges to the President’s earlier actions were stayed in the lower court pending the Supreme Court’s decision, the Administration has sufficient confidence in its authority to suspend the exemption, with the exception for certain postal shipments, to clarify that it would continue notwithstanding the invalidity of the IEEPA tariffs.
Trade Deals
The impact of the Supreme Court’s decision on the “framework” trade deals entered into by the Administration with U.S. trading partners remains to be seen. Many of these deals need to be finalized and implemented into law by the trading partners. While these agreements are being treated by the Administration as being Executive Agreements without a need for Congressional ratification, it can be expected that, to the extent they establish tariff rates that were agreed to pursuant to IEEPA, there may be challenges to the agreements if the terms of the deals related to tariffs are not ratified by Congress. It also remains to be seen whether U.S. trading partners will continue to adhere to the framework trade deals if the base tariff rates imposed by the Trump Administration under other laws are lower than those set forth in deals negotiated pursuant to IEEPA.
Refunds
As Supreme Court Justice Kavanaugh stated in his dissent, issuing refunds for the unlawful IEEPA tariffs will be a “mess.” Nonetheless, while the issue was widely discussed during oral arguments, the majority Supreme Court decision made no mention of whether importers who paid the IEEPA tariffs are entitled to refunds, or, if so, how refunds should be issued.
The lower courts have quickly addressed this issue. On March 2, 2026, the Court of Appeals for the Federal Circuit (the court decision appealed to the Supreme Court) issued its mandate and returned the case to the Court of International Trade. The CIT very quickly assigned all IEEPA cases to a single judge, the Hon. Richard K. Easton, who issued an order on March 4, 2026, stating that all importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Supreme Court’s decision invalidating them. That Order, in the case of Atmus Filtration, Inc. v. United States, et, al, (26-91259), also stated that with respect to any and all unliquidated entries that were entered subject to the IEEPA duties, the CBP was directed to liquidate those entries without regard to the IEEPA duties and that for any liquidated entries for which liquidation is not final shall be reliquidated without regard to IEEPA duties.
That Order was subsequently amended and clarified on March 5, 2026, that the refund order applied to “the IEEPA duties imposed by the Executive Orders considered by the Supreme Court” in the Learning Resources case.
Judge Eaton stayed his refund order, as amended, on March 6, 2026, after CBP court submissions and a private hearing in which CBP represented that it could not comply with the Court’s direction that CBP refund the IEEPA tariffs. In his representation to the court, CBP’s Executive Director for CBP’s Trade Program Directorate advised the court that as of March 4, 2026, over 330,000 importers had made over 53 million entries in which they have deposited or paid duties imposed pursuant to IEEPA. The approximate total amount of such duties was $166 billion.
According to CBP, processing those refunds, plus interest, are beyond the current capabilities of CBP. However, CBP did state that it anticipated the development of a refund process, perhaps as soon as April 20, 2026, that would involve the following steps:
·The importer files a declaration in ACE that includes a list of entries on which IEEPA duties were paid.
·ACE runs a series of validations on each entry within the declaration and automatically re-calculates the duty owed without the IEEPA tariffs (with applicable interest).
·CBP verifies the declaration and processes refunds as soon as practicable.
·ACE automatically finalizes (liquidates or reliquidates) the entries.
·ACE automatically aggregates the refunds with interest by importer and liquidation date.
·CBP certifies the refunds.
·The Department of the Treasury issues IEEPA refunds electronically.
Considerations for Parcel Shippers
Notwithstanding the CIT rulings regarding IEEPA refunds, the final status of any IEEPA refunds remain unclear. For example, the Trump Administration has made multiple representations that it might take “years” of litigation before the issue of who is entitled to refunds is finally resolved. The Administration may ask the Supreme Court to reconsider its decision. It may also appeal the refund orders in the Court of International Trade. CBP may be unable to adopt procedures, such as those it outlined to the CIT on March 6, 2026, that allow an efficient or orderly processing of refunds. It should be noted that on March 6, 2026, the Financial Times reported that CBP was denying importer requests to either correct entries to remove IEEPA tariffs or protests seeking their refund.
In addition, the amended order issued by the CIT on March 5, 2026 stating that IEEPA tariffs subject to the Executive Orders considered by the Supreme Court in the Learning Resources decision are subject to refunds may raise the possibility that IEEPA tariffs not subject to those specific orders, such as tariffs imposed on Brazil and India, may not be entitled to the benefit of the Court’s Order.
At this time, companies seeking refunds for the IEEPA tariffs they have paid should be proactively reviewing and compiling detailed records to document the payment of such tariffs and any claimed refunds. Even if a universal refund procedure at CBP is finally adopted, the CBP court filing regarding such a procedure implies that CBP may require the importer to identify and document all entries and tariffs for which it is seeking a refund. In addition, all importers should comply with CBP’s new regulations, effective February 6, 2026, to receive refunds electronically from CBP.
While it is possible that the CIT will ultimately re-instate its order requiring refunds of all IEEPA tariffs, with a procedure proposed by CBP, the possibility of appeals or further delays before such a reinstatement means that importers should also monitor liquidation dates on Customs entries involving such entries to ensure that any PSC; Protest; and court deadlines are met in the event that the Administration does not voluntarily agree to refund the IEEPA tariffs and legal action is required to claim a refund.
Finally, all importers should be reviewing their contracts with their vendors; customers; or logistics providers regarding any provisions involving responsibility for and payment of the IEEPA tariffs. Now that the tariffs have been declared unlawful, contractual counterparties with a potential interest in tariff refunds are likely to seek their share of the refund, either through commercial negotiations or, alternatively, litigation.
Looking ahead
While the Supreme Court has declared the IEEPA tariffs unlawful, uncertainty about the refund of those tariffs and the Administration’s overall tariff policy will continue in 2026. All Parcel shippers should exercise their required levels of reasonable care and informed compliance with the US Customs laws. Customs law enforcement is a priority of the Trump Administration. That has not changed, and neither has the Trump tariff policy, even if the IEEPA tariffs have now been declared unlawful.
Andrew M. Danas is a Partner with Grove, Jaskiewicz and Cobert, LLP, Washington, D.C...For more information, visit www.gjcobert.com or email adanas@danaslaw.com. The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.
