Legislative History of IEEPA
The International Emergency Economic Powers Act (IEEPA) of 1977 was originally designed to give the President authority to regulate commerce during national emergencies. However, its use as a tool for imposing broad-based tariffs became the center of a historic legal battle that culminated in a landmark Supreme Court decision in early 2026.
In early 2025, the Trump administration invoked IEEPA to bypass the traditional legislative process, imposing sweeping "Reciprocal Tariffs" and "Trafficking Tariffs." These included a 10% baseline tariff on most global imports and specific surcharges of up to 35% on goods from China, Canada, and Mexico. The administration argued that trade deficits and fentanyl trafficking constituted national emergencies that justified these measures.
By the time the Supreme Court intervened, the government had collected approximately $166 billion in IEEPA-related duties across more than 53 million entries.
The Supreme Court’s Ruling
On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that IEEPA does not grant the President the authority to impose tariffs.
The Core Holding: The Court held that while IEEPA allows the President to "regulate" importation, the power to "tax" (which includes tariffs) belongs exclusively to Congress under Article I of the Constitution.
Major Questions Doctrine: The majority emphasized that a delegation of such vast economic power requires "clear congressional authorization," which IEEPA lacks.
Immediate Effect: The ruling invalidated all IEEPA-based tariffs but did not affect tariffs under other authorities, such as Section 232 (National Security) or Section 301 (Unfair Trade Practices).
Updates Since The Ruling
Following the ruling, the administration officially terminated IEEPA tariffs on February 24, 2026.
The U.S. Court of International Trade (CIT) subsequently ordered a nationwide refund process, though the government has signaled it may appeal the scope of this order to limit refunds only to those companies that actively participated in the litigation.
The Court suspended its ruling while Customs & Border Patrol builds a "streamlined" refund system in the Automated Commercial Environment (ACE). CBP has told the Court they expect to ready to launch the new tool by late April 2026.
The Department of Justice (DOJ) is currently focusing its appeal strategy not on the legality of the tariffs themselves—which SCOTUS settled—but on the scope and jurisdiction of the refund orders. Specifically, the government is likely to appeal the March 4, 2026, order from the Court of International Trade (CIT) that mandated "universal" refunds for all importers. The government’s primary argument is that a single judge cannot issue a nationwide injunction that benefits companies who were not active parties to the original lawsuits. They may find success here by citing recent Supreme Court precedents (like Trump v. CASA, Inc.) that strictly limit the power of lower courts to issue "universal" relief. In the absence of specific direction from the Supreme Court, the DOJ could even go further and argue that no refunds are due.
How and Why to Prepare For a Refund
It may be tempting for importers given the uncertain legal environment to wait and see what unfolds before taking action. The current uncertainty, though, is the very reason to act today to protect your rights.
While this process plays out in court, claims are continuing to liquidate and protest periods expiring. Claimants who fail to act in a timely manner may find that their legal position has eroded while they wait for greater certainty. Tariff Refund Project recommends that clients take the following steps:
Register with ACE: U.S. Customs and Border Protection (CBP) has mandated that refunds will be issued electronically. Importers must have an active ACE account set up for electronic funds transfer. Access to ACE also gives importers direct access to the data required to properly file protests.
File Administrative Protests: For entries that have already "liquidated", businesses should file a protest under 19 U.S.C. § 1514 within 180 days of the liquidation date. This ensures that the entry and duties paid aren’t finalized before court challenges are resolved.
Consider "Protective Litigation": Because the government is expected to challenge the "nationwide" nature of the refund order, it may make sense for importers to file a separate summons in the CIT to ensure they are covered by any final judgment.
Tariff Refund Project is able to manage every step of this process for clients, saving them time and allowing them to focus on their core business. Reach out to us today to get started.