Supreme Court Tariff Decision: IEEPA Tariffs Overturned

On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The IEEPA is a federal law that allows the president to regulate commerce and impose sanctions after declaring a national emergency. The decision invalidates IEEPA-based reciprocal duties. However, the Court didn’t decide whether the federal government must refund duties already collected. Importers should treat refunds as possible, but not guaranteed.

Key Takeaways

• In the case of Learning Resources, Inc. v. Trump, the Supreme Court of the United States found 6-3 in favor of the petitioner, ruling IEEPA tariffs unlawful.
• This ruling has no bearing on tariffs put into place from Section 301 and Section 232 investigations, such as those levied against China starting in 2018.
• IEEPA tariff refunds were not addressed in the court’s ruling.
• President Trump responded by invoking Section 122 of the trade act of 1974, setting a 10% global tariff rate that will last 150 days.

Let’s look closer at the details of the court’s decision and its immediate and long-term impact on US importers.

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Key Definitions You Should Know

Before we discuss the court ruling, here are some terms that you should know:

• IEEPA: A federal law that allows the president to take certain actions during a declared national emergency, but the Supreme Court ruled it doesn’t authorize tariffs. 
• Reciprocal “Liberation Day” Tariffs: A set of country-specific import duties that were imposed using the IEEPA and described publicly as reciprocal tariffs. 
• Section 122 (Trade Act of 1974): A statute allowing a temporary import surcharge to address certain international payment problems, generally limited in duration without further action. 
• CBP Entry Summary (Form 7501): The official document necessary to enable U.S. Customs and Border Protection, the primary agency overseeing imports, to assess duties and determine if import requirements have been met. 

Knowing these terms will help you understand the implications of the Supreme Court’s ruling.

The US Supreme Court Declares Reciprocal Tariffs Unlawful

On February 20 2026, the Supreme Court released a 6 to 3 opinion in the case of Learning Resources, Inc. v. Trump in favor of the educational toy retailer. For importers in the U.S., the practical upshot of this finding is the removal of Liberation Day reciprocal tariffs and other IEEPA-based duties. IEEPA tariffs are import duties put into place using the International Emergency Economic Powers act, rather than those imposed by trade statutes like Section 301 or Section 232.

In their majority opinion, the court ultimately concurred with lower courts that since the IEEPA does not expressly give the president the power to invoke tariffs without congressional approval, those tariffs were unlawful. Here’s a graphic breaking down the timeline of events. 

CBP has mechanisms that importers can use to correct duty amounts or challenge CBP decisions. It’s unclear if those mechanisms will be the pathway IEEPA-related refunds since the  Supreme Court did not order refunds. Government agencies have signaled they may need additional guidance. 

I’ll explain the options importers historically have available to receive refunds from CBP, but first, let’s clarify which tariffs are being repealed and which ones importers still need to take into account when making buying decisions.

What Tariffs Are Still in Place After the Supreme Court’s Decision? 

While the justices’ decision does away with IEEPA/reciprocal tariffs, it does not affect increased duty rates put into place by the following methods:

• Section 301 Investigations: The Trade Act of 1974 authorizes the United States Trade Representative (USTR) to implement tariffs on foreign trade partners. It was used in 2018 to assess tariffs of up to 25% on commodities imported from China. Not all commodities from China are subject to this tariff, but many are.
• Section 232 Investigations: Similarly, the Trade Expansion Act of 1962 empowers the president to levy tariffs on specific commodities after an investigation by the US Department of Commerce’s Bureau of Industry and Security (BIS). 

Goods which have received increased rates of duty due to Section 232 tariffs include, but aren’t limited to:

Tariffs assessed using these acts can be suspended, as occurred with Section 301 tariffs on the European Union in 2021. However, they aren’t part of the Supreme Court’s ruling.

On February 20, 2026, The White House responded to the Supreme Court’s decision by invoking Section 122 of the Trade Act of 1974 to impose a 10% temporary import duty on all trade partners for 150 days. The administration later said the 10% rate will rise to 15%, the maximum amount allowed under Section 122.

The Section 122 surcharge is separate from Section 301 and Section 232, but it can appear alongside both on the same entry. 

What CBP Mechanisms Are Used for Duty Corrections and Refunds?

Refunds are unresolved as of February 23, 2026. The Supreme Court opinion did not order refunds or provide instruction for a tariff refund process, and administration officials have said they are awaiting lower-court guidance. Importers can still prepare by gathering entry summaries, liquidation dates, and tariff line details.

These two established CBP practices are used to amend entry summary information and/or provide legal recourse for protesting one of the agency’s decisions:

• File a Protest With CBP Form 19: A protest is a formal challenge to CBP decisions. Importers often use it when they suspect they’ve overpaid their duties. If you have entries that have been liquidated and were subject to IEEPA tariffs, you may need to submit a protest even if unliquidated entries are automatically refunded.
• Post Summary Correction (PSC): A PSC is a method for correcting entry summary data for unliquidated entries. If refunds for IEEPA tariffs are approved, importers with unliquidated entries may still need to submit a PSC to CBP to reflect the new tariff rates set under Section 122.

Importers who have already taken legal action in pursuit of tariff refunds should wait on the results of their individual cases before taking further action, or consult with a Licensed Customs Broker to determine their best course of action.

Get Help Claiming Your IEEPA Refunds From USA Customs Clearance 

At USA Customs Clearance, our team of experienced customs brokers can provide expert advice on applying for IEEPA tariff refunds, and even submit your protest in the fastest, most efficient method possible. Their familiarity with complex government forms will save you time and get your IEEPA tariff refund where it belongs: your bank account.

If you’re in need of assistance getting you money back from overpaid duties, give us a call at (855) 912-0406.

Not legal advice

FAQ

Are IEEPA tariffs automatically refunded?

Not yet. The Supreme Court did not order refunds, and public statements indicate the process may depend on additional court or agency guidance. 

Will Section 301 or Section 232 tariffs be refunded because of this ruling?

No. The decision concerns tariffs imposed under IEEPA and does not change Section 301 or Section 232 authorities.

What documents should I gather now?

Entry summaries (CBP Form 7501), liquidation status, HTS numbers, duty lines showing IEEPA charges, invoices, and broker statements. 

Should I file something with CBP right away?

It depends on liquidation status and deadlines. Many importers wait for clearer agency direction, then use standard correction/protest pathways if applicable.