Client Alert: February 20, 2026
Supreme Court Strikes Down IEEPA Tariffs—Key Implications for Importers Seeking Refunds
Today, the U.S. Supreme Court issued a landmark 6-3 decision holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The ruling invalidates the tariffs that President Trump imposed beginning in early 2025 on imports from Canada, Mexico, China, and virtually all other U.S. trading partners.
For importers who have paid these tariffs, this decision opens the door to seeking refunds, though significant unanswered questions remain about the process and timing for doing so.
Background: The Tariffs at Issue
In 2025, President Trump invoked IEEPA to declare national emergencies based on (1) illegal drug trafficking from Canada, Mexico, and China, and (2) large and persistent U.S. trade deficits. Relying on these emergency declarations, the President imposed:
A 25% tariff on most imports from Canada and Mexico;
Tariffs on Chinese goods that ultimately reached 145%; and
"Reciprocal" tariffs of at least 10% on imports from all other trading partners.
Additional penalty tariffs targeting imports from Brazil and India.
These tariffs were challenged in two consolidated cases—one brought by small businesses and another by small businesses joined by 12 states.
What the Court Said (and did not say)
Writing for the majority, Chief Justice Roberts held that IEEPA does not authorize the President to impose tariffs, meaning that the tariffs imposed under IEEPA lacked statutory authority. The decision establishes that the IEEPA tariffs were unlawful, which means importers who paid them have a legal basis to seek refunds from the U.S. government.
However, the Court's opinion provides little guidance on the mechanics of refund recovery. The question of how duty refunds will be made available to affected importers now falls to the Court of International Trade to resolve.
The Court Did Not Address Remedies: The majority opinion does not elaborate on how or when importers will receive refunds. Justice Kavanaugh's dissent criticized the Court for saying "nothing today about whether, and if so how, the Government should go about returning the billions of dollars that it has collected from importers."
Jurisdiction Lies with the Court of International Trade: The Supreme Court confirmed that the Court of International Trade (CIT) has exclusive jurisdiction over tariff-related claims under 28 U.S.C. § 1581(i)(1). This means importers seeking refunds will likely need to pursue claims in the CIT or through administrative channels with U.S. Customs and Border Protection (CBP).
Remaining Questions
While today's ruling is a significant victory for importers, substantial uncertainty remains:
Administrative vs. Judicial Remedies. It is unclear whether CBP will establish an administrative refund process or whether importers will need to file individual or class actions in the Court of International Trade (CIT). More than one thousand cases before the CIT—where importers sought relief from the IEEPA tariffs—were stayed, pending the Supreme Court’s decision. Now, importers should closely monitor ongoing CIT litigation, as these cases may shed light on how refunds will be handled. Forthcoming guidance from CBP may also provide information regarding refunds.
Termination of Duty Collection. With the IEEPA tariffs now declared unlawful, CBP will need to cease collecting IEEPA tariff duties from importers. This will require modifications to the Harmonized Tariff Schedule of the U.S. (HTSUS), and will not happen automatically. Importers should watch for guidance via CBP’s Cargo Systems Messaging Service (CSMS) for updates on the phase-out of IEEPA tariffs.
Statute of Limitations. Claims for refunds of duties under 28 U.S.C. § 1851(i) are generally subject to a two year statute of limitations, beginning after the cause of action first accrues. If the accrual date in this case is tied to the date of duty payment or liquidation rather than the date of the Supreme Court’s ruling, some claims could potentially become time-barred as early as 2027.
De Minimis Exemption. In 2025, President Trump also invoked IEEPA to suspend the de minimis exemption (19 U.S.C. § 1321) for low-value imports from all countries. The Supreme Court did not opine on whether IEEPA authorizes the President to take this action, which is the subject of separate litigation. However, given today’s decision, it is possible that the courts may rule that IEEPA did not authorize the suspension of de minimis either, potentially opening the door to further refunds.
Timeline. Given the complexity and scale of the refunds involved, the process could take months or even years to resolve.
Recommended Next Steps
We recommend that affected importers take the following steps:
Preserve Records. Importers should compile and preserve all documentation related to tariff payments, including CBP entry summaries, commercial invoices, proof of payment, and any correspondence with CBP. Calculate the total amount of IEEPA tariffs paid to date to assess the magnitude of potential refund claims.
Monitor Liquidation Timelines. Importers should identify unliquidated entries, as these present the clearest path for reversing payment of the invalidated tariffs. If CBP does not automatically correct unliquidated entries to remove the IEEPA tariffs, importers should consider filing Post Summary Corrections (PSCs) to amend their entry summaries and claim the correct duty rate. PSCs must generally be filed before liquidation occurs, so timely action is critical. Importers should work with their customs brokers to monitor liquidation status and be prepared to act quickly.
Track New Developments. Importers should monitor guidance from CBP and the Court of International Trade regarding the refund process and cessation of IEEPA duty collection.
Evaluate Litigation Options. Depending on how the refund process unfolds, importers may need to consider filing claims in the Court of International Trade, either individually or as part of a class action.
Consult with Counsel. Given the complexity and evolving nature of this issue, we encourage you to contact us to discuss your specific circumstances and develop a strategy tailored to your business.
Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. LMD Trade Law PLLC (and its attorneys and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.
