Supreme Court’s IEEPA Tariff Decision: What Businesses Should Do Next

Co-Author: Sam Florence
Note: Sam Florence is a 2026 Summer Associate/a University of Cincinnati College of Law student, and is not a practicing attorney.

In a landmark decision with significant implications for U.S. importers, manufacturers, distributors, and retailers, the U.S. Supreme Court recently held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. In Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., 607 U.S. 229 (2026), the Court invalidated both the so-called “reciprocal” and “national emergency” tariffs implemented via executive order from February–April 2025.

Although the decision resolves a major legal question concerning presidential trade authority, the more immediate concern for many businesses is practical: what happens next?

The Court’s Holding

Writing for the majority, Chief Justice Roberts concluded that tariffs fall within Congress’s constitutional authority to impose duties and taxes, and that IEEPA’s authorization to “regulate” imports does not entitle the executive branch to impose tariffs. The Court emphasized that no prior President had used IEEPA to impose tariffs during the nearly fifty years since its enactment and rejected the Administration’s expansive interpretation of the law.

As a result, the “reciprocal” and “national emergency” tariffs were declared unlawful. These tariffs were subsequently terminated pursuant to executive order. However, other tariffs implemented under separate statutory authorities, including but not limited to Section 122 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962, remain unaffected by the decision.

Litigation Continues Post-Decision

Despite the Supreme Court’s ruling on IEEPA tariff authority, litigation regarding refunds and implementation remains active.

Following the Court’s decision, the Court of International Trade (CIT) ordered U.S. Customs and Border Protection (“CBP”) to provide relief to importers by processing refunds of unlawfully collected IEEPA tariffs. CBP has since begun implementing administrative procedures to process refunds through its Consolidated Administration and Processing of Entries (CAPE) system, utilizing a phased approach.

Phases 1 and 2 have launched, limited to importers (or their brokers seeking refunds for unliquidated entries and entries liquidated within the preceding 80 days, including but not limited to entries flagged for reconciliation.^[1] As of July 31, 2026, approximately $128.68 billion has been accepted for processing in CAPE.^[2] To date, however, importers seeking refunds on finally liquidated entries (deemed to be entries beyond the 90-day voluntary review window) have been unable to secure relief through the existing CAPE process or otherwise.

Phase 3 has launched, but perhaps not as broadly as many would have hoped.  Per the CIT’s July 17, 2026 Order, the CBT is charged with reliquidating any and all of Plaintiff’s entries that have been liquidated more than 80 days. This Order is consistent with the Government’s pending appellate position^[3] that the CIT does not maintain universal refund authority, thereby leaving many importers empty-handed unless and until one of the following occurs:

1. They become a Plaintiff by individually filing suit within the statutory time period;
2. They become a Plaintiff if and when they become a certified member of the applicable class per pending motion;^[4]
3. The Government loses its appeal, thereby paving the way for the CIT to issue…and enforce… a universal order for those entries that have been liquidated more than 80 days.

Practical Implications

The Supreme Court’s decision is one of the most consequential trade law rulings in decades. While it significantly curtails presidential authority under IEEPA, the immediate business focus should be less on constitutional doctrine and more on refund recovery, go-forward compliance, and supply chain planning.

For many businesses, the most significant consequence of the Court’s decision is the prospect of tariff refunds. Although refund claims must be pursued by the importer of record, the Court’s decision may also affect manufacturers, distributors, and downstream customers that previously absorbed tariff-related costs through pricing adjustments or contractual pass-through arrangements. Businesses that paid IEEPA tariffs should promptly:

• Identify entries that were subject to IEEPA tariffs;
• Coordinate with customs brokers to confirm eligibility for refund processing;
• Preserve entry, liquidation, and payment records;
• Monitor CBP guidance and refund timelines; and
• Evaluate whether additional legal action may be necessary to protect refund rights.

The prospect of significant tariff refunds also raises important considerations in M&A transactions. Buyers and sellers should evaluate whether potential refund claims have been reflected in the transaction’s economic terms and expressly address entitlement to any post-closing recoveries. Deal structure also matters: in a stock sale, the target entity generally retains ownership of refund claims (and thereby controls the pursuit and receipt of refunds), while in an asset sale, those rights may not transfer absent specific agreement between the parties. Parties should also consider cooperation covenants, responsibility for pursuing claims, and the treatment of potential tariff reimbursement demands from customers when negotiating the transaction.

Newly Established Tariffs

The Supreme Court’s IEEPA decision has not deterred the Trump administration from attempting to rebuild its tariff program under different statutory authorities. In response to the Court’s ruling, President Trump issued a proclamation imposing a global 10% tariff under Section 122 of the Trade Act of 1974 (Section 122) for a period of 150 days.

After the Section 122 tariff expired on July 23, 2026, the Trump administration immediately replaced it with a tariff under Section 301 of the Trade Act of 1974 (Section 301). The Section 301 tariff remains in place indefinitely and applies to imports from 60 jurisdictions at rates ranging from 10% to 12.5%. Although the Section 301 tariff has already been challenged in the CIT, it may present a more viable legal basis for the administration’s trade priorities than IEEPA or Section 122.

Conclusion

While the Supreme Court’s ruling answered the key legal question on IEEPA tariff authority, it does not mark the end of the dispute. Important questions regarding the administration and scope of refunds remain before the courts, and tariffs implemented under other statutory authorities remain in effect. As such, businesses should pay close attention to ongoing developments and consider consulting counsel to evaluate their next steps.

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[1] And not yet included on a type 09 reconciliation entry
[2] Per Declaration of CBP Executive Director Brandon Lord
[3] Per Notice of Appeal filed 6/3/26 in the CIT and Opening Brief of Appellants dated 8/10/26 in Case No. 26-1895
[4] V.O.S. Selections Inc. et al v United States of America, 1:25-CV-00066