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In a 6-3 ruling, the U.S. Supreme Court (SCOTUS or the Court) ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president power to impose tariffs.

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In response, President Donald Trump issued a temporary 10% tariff on all imports pursuant to Section 122 of the Trade Act of 1974.

Importers of record should consider their options to protect and ensure any possible refund from Customs and Border Protection (CBP) for their previously paid IEEPA tariffs.

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On February 20, the SCOTUS, in a landmark 6-3 ruling, determined that President Trump’s use of the IEEPA to impose tariffs was unlawful. In its <a href="https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf" target="_blank" rel="noreferrer noopener">decision</a>, the SCOTUS stated: “When Congress grants the power to impose tariffs, it does so clearly and with careful constraints. It did neither in IEEPA.”

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As Chief Justice John Roberts noted in the majority opinion, the IEEPA gives the president economic tools to address significant foreign threats to U.S. national security, foreign policy, or the economy. Early in his second term, President Trump declared a national emergency as to both drug trafficking and U.S. trade deficits and issued a series of executive orders imposing tariffs under the IEEPA.

Several small businesses subsequently filed complaints in federal district courts, including the U.S. District Court for the District of Columbia and the U.S. Court of International Trade (CIT), alleging that the IEEPA does not authorize tariffs. Consistently, these lower courts ruled in favor of the small businesses, and the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) affirmed on appeal, holding that the IEEPA’s grant of authority to “regulate … importation” did not authorize the challenged tariffs, which “are unbounded in scope, amount, and duration.” The Trump administration then sought review by the SCOTUS, which held oral argument on an expedited basis in November 2025. For additional analysis on the oral argument, see <a href="https://www.thompsonhinesmartrade.com/2025/11/trumps-emergency-tariffs-face-scrutiny-and-skepticism-at-the-supreme-court-2/" target="_blank" rel="noreferrer noopener">our November 7, 2025 SmarTrade blog post</a>.

The Court held that the IEEPA does not authorize the president to impose tariffs.

The SCOTUS opinion makes clear that the U.S. Constitution reserves for the legislative branch “the power to lay and collect taxes, duties, imposts and excises” and that a tariff is a tax. The Court held that when the U.S. Congress has delegated its constitutional power to tariff, “it has done so in explicit terms, and subject to strict limits” and “conditioned exercise of the tariff power on demanding procedures.” The opinion notes, however, that “[a]bsent from [the] lengthy list of [IEEPA] powers is any mention of tariffs or duties.”

Trump Administration’s Reaction to the SCOTUS Decision and Other Tariff Options

After the SCOTUS opinion, President Trump on February 20 invoked Section 122 of the Trade Act of 1974 to impose a 10% tariff on imports worldwide. Section 122 empowers the president to address “fundamental international payments problems” that could impair U.S. national interests, including economic and national security interests. Any tariffs implemented under Section 122, however, are temporary, unable to exceed 150 days unless extended by an Act of Congress.

The new Section 122 tariff went into effect on February 24, and thus will continue until July 24. However, this tariff does not apply to products identified in the annexes of the Executive Order itself. President Trump has also indicated that this temporary tariff will be raised to 15%, but as of this writing there has been no official announcement formalizing such an increase.

Additionally, the U.S. Trade Representative (USTR) announced that the Trump administration will rely on other statutory authorities to implement more tariffs, including Section 301 of the Trade Act of 1974 and Section 232 of the Trade Adjustment Act of 1962. However, both Section 301 and Section 232 are statutory authorities that require a lengthier administrative process before presidential action.

Section 301 allows the federal government to respond to a country’s acts, policies, or practices that, after investigation, are found to be unjustifiable, unreasonable, discriminatory, and burdensome to U.S. commerce. Tariffs are one possible remedy under this statute. The USTR has stated that it will be initiating several Section 301 investigations on an expedited basis but did not specify which countries would be investigated.

Section 232 allows the federal government to impose tariffs and import restrictions on certain imports that threaten national security. The USTR has confirmed that tariffs currently imposed under Section 232 will remain in place, including those pertaining to steel and aluminum, while ongoing investigations will conclude soon. The Trump administration may seek to adjust tariffs on sectoral goods already subject to Section 232 tariffs and may initiate investigations related to other imports.

The SCOTUS opinion and subsequent Trump administration statements indicate that the CIT will oversee the IEEPA tariff refund process to be administered by CBP. The holding confirmed that the CIT is the sole trial court with jurisdiction to adjudicate any disputes arising from those claims.

How refunds may be provided is still unclear. The Court’s opinion provided no guidance to the CIT. Prior case law confirms that the CIT has the authority to order refunds, and the federal government defendants in the current CIT IEEPA tariff case have stated on the record that they will not contest the CIT’s authority to order reliquidation and enable refunds. During a press conference after the SCOTUS decision, President Trump did not appear to contest this assertion either but stated that the matter could be litigated for years. Secretary of the Treasury Scott Bessent has also stated that the Trump administration “will follow the court’s direction” but not until the CIT rules on a refund process. Importers of record, however, have stated that a process exists via the Automated Commercial Environment (ACE) system for processing imports and collecting tariff revenues to allow for a relatively straightforward refund process.

CBP has stated that the federal government will stop collecting tariffs subject to the IEEPA beginning February 24, 2026. Other tariff regimes, such as those imposed under Section 232 and Section 301, remain in effect.

How Can Importers Seek IEEPA Tariff Refunds?

Importers of record that have paid the IEEPA tariffs should take steps to preserve their rights and preserve their records for seeking any refunds. Discussions with counsel on a refund strategy should include consideration of both CBP administrative refund procedures and the filing of a CIT complaint.

Overall, importers of record should collect and preserve records of all entries subject to IEEPA tariffs as evidence of tariff payments. This should include but not be limited to: (i) entry records maintained in CBP’s ACE system; (ii) CBP Entry Summary (Form 7501); (iii) CBP Periodic Monthly Statements; and (iv) any other duty payment records. Importers of record should also monitor CBP’s <a href="https://www.cbp.gov/trade/automated/cargo-systems-messaging-service" target="_blank" rel="noreferrer noopener">Cargo Systems Messaging Service</a> for updates and guidance on the reporting and application of any tariff duty rates.

The SCOTUS indicated that the CIT has jurisdiction over IEEPA issues but did not indicate how refunds of the invalidated IEEPA tariffs should be processed. The Trump administration itself stated that it would issue refunds “following a final, unappealable decision ordering the government to refund the IEEPA tariffs.” These actions have resulted in the continuation of complaints filed by importers of record at the CIT seeking refunds. While more than 1,500 complaints were filed before the February 2026 SCOTUS ruling, they were all stayed pending the outcome of the Court’s decision. With the tariffs now invalidated, the CIT may lift the stay and seek to address how refunds should be processed. The CIT could also mandate CBP to establish a court-supervised refund process, instead of a CBP administrative refund process. Absent any immediate process or procedural rulings from the CIT regarding refunds, the filing of a complaint may be the most prudent step to take to protect an importer of record’s right to obtain a judgment and judicial relief.

Should a CBP administrative refund process take place, importers of record may be able to seek refunds by filing post-summary corrections (PSCs) or filing a protest. For unliquidated entries, importers can file corrections up to 300 days of entry and at least 15 days before any scheduled liquidation. Any PSC submission is essentially a new Entry Summary and would correct any prior entry by removing the Harmonized Tariff Code of the United States classification in place for the IEEPA tariff codes and thus removing the additional duty rate. For liquidated entries, importers of record can file a protest requesting a refund within 180 days of liquidation. This is a formal process to administratively contest CBP decisions related to imported merchandise and request refunds.

Our International Trade practice group is closely monitoring developments as to the SCOTUS ruling, any actions the CIT and/or CBP may take regarding the IEEPA tariff refund process, and any new tariff actions that the Trump administration may implement.

To receive an email notification whenever a new Thompson Hine SmarTrade blog post is published on these issues, please <a></a><a href="https://www.thompsonhinesmartrade.com/subscribe/" target="_blank" rel="noreferrer noopener">subscribe to the blog</a>.

Our International Trade practice group will also be hosting a webinar on February 26 at 3:00 p.m. ET to examine the IEEPA decision and its broader implications in greater detail. <a href="https://event.on24.com/wcc/r/5254154/1681E1442B05023D1CBB59DA5CACE8CF" target="_blank" rel="noreferrer noopener">Please click here to register</a>.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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https://admin.thompsonhine.com/wp-content/uploads/2026/02/International-Trade-Update-After-U.S.-Supreme-Court-Invalidates-IEEPA-Tariffs-Trump-Administration-Turns-to-Other-Options.pdf

After U.S. Supreme Court Invalidates IEEPA Tariffs, Trump Administration Turns to Other Options – What Importers Need to Know

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