Supreme Court Strikes Down IEEPA Tariffs: What To Know and Expect

On February 20, 2026, the United States Supreme Court (the “Court”) held in Learning Resources, Inc. et al. v. Trump (“Learning Resources”) that the International Emergency Economic Powers Act of 1977, 50 U.S.C. 1701, et seq. (“IEEPA”) does not authorize the President of the United States (the “President”) to impose tariffs (the “Decision”).

The Decision has significant implications, most directly for importers that have been paying duties imposed by President Trump under IEEPA on imports from most U.S. trading partners in response to trade deficits referenced by the administration and on imports from Canada, Mexico, and China in response to the alleged influx of illegal drugs from those countries.

This alert provides an overview of the Decision and key implications, including which tariffs have been held unlawful, which tariffs remain in place, and how importers can prepare for possible refunds. This alert also addresses what the Decision leaves mostly untouched, including, importantly, the President’s authority to impose U.S. sanctions pursuant to IEEPA.

I. Background on the IEEPA Cases

IEEPA authorizes the President to take economic action in response to emergencies declared under the National Emergencies Act, 50 U.S.C. § 1601 et seq. (“NEA”). As such, most modern U.S. economic sanctions programs (such as those imposing sanctions on Iran, Russia, and the Russian-occupied regions of Ukraine) are based on IEEPA. Shortly after his second term began, President Trump declared or expanded national emergencies under the NEA and, in response to those national emergencies, issued a series of sweeping orders imposing tariffs under IEEPA.

These tariffs fell into two broad categories. The first set were imposed in response to declared national emergencies concerning illegal drug trafficking, especially fentanyl, from Canada, China, and Mexico (due to the alleged failures of Mexico, Canada, and China to “prevent” such trafficking) (the “Trafficking Tariffs”). These tariffs imposed duties of 25% on most Canadian- and Mexican-origin imports and 10% on most Chinese-origin imports, subsequently modified on multiple occasions. The second set were imposed on the basis of a separate declared emergency under IEEPA relating to the threat presented by large and persistent trade deficits (the “Reciprocal Tariffs” and, together with the “Trafficking Tariffs,” the “IEEPA Tariffs”). These measures applied to imports from most U.S. trading partners and started at a baseline rate of at least 10%, with substantially higher rates applied to dozens of countries, subject to further modifications over time.[1]

Various companies filed suit against the President and the U.S. government to challenge the IEEPA Tariffs and, most recently, the Federal Circuit on August 29, 2025, upheld the Court of International Trade’s (“CIT”) May 28, 2025, ruling striking down the Trafficking Tariffs and the Reciprocal Tariffs, holding that the President exceeded his authority under IEEPA in imposing the tariffs.[2] Shortly thereafter, the Trump administration filed a petition for writ of certiorari to the Court.

The U.S. government asserted before the Court that IEEPA’s grant of authority to “regulate…importation” was broad enough to encompass the imposition of tariffs. Today, the Supreme Court decisively rejected that assertion.

II. The Decision

In a 6-3 opinion, the Court ultimately struck down the President’s authority to impose tariffs under IEEPA on three key grounds.

Chief Justice Roberts announced the Decision and wrote the Court’s opinion for Parts I, II-A-1, and II-B, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson; he also wrote Parts II-A-2 and III (addressing the “major questions doctrine”), joined only by Justices Gorsuch and Barrett. Justices Gorsuch and Barrett wrote separate concurrences, and Justices Kavanaugh, Alito, and Thomas dissented.

In Parts II-A-1 and II-B, the six Justices aligned on two key grounds to support the conclusion that IEEPA does not authorize the imposition of tariffs by the President.

1. The Power to Impose Tariffs Lies with Congress. First, in Part II.A-1, the Court focused primarily on the constitutional powers assigned to Congress under Article I, Section 8 of the Constitution to conclude that the power to lay and collect taxes (including tariffs as a type of tax on imported goods and services) falls squarely with Congress. As conceded by the U.S. government, the President has no peacetime authority to impose tariffs. Accordingly, the power to impose tariffs must come from a clear congressional grant to the President.
2. IEEPA’s Text Cannot be Read to Delegate Tariff Authority. In Part II-B, the Court carried out a statutory interpretation analysis of the text of IEEPA and the President’s declared authority to impose tariffs.  Ultimately, the Court held that the lack of a specific statement delegating the power to impose tariffs or duties, among a lengthy list of powers delegated by Congress to the President (to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent, or prohibit…importation or exportation”), could not be read to authorize the President to impose tariffs.
   
   The U.S. government argued primarily that the power to impose tariffs, including the IEEPA Tariffs, could be garnered from the delegation to the President of the power to “regulate…importation.” After stating that such a broad reading of the term “regulate” would eviscerate the remaining eight verbs in this delegation under IEEPA, the Court focused on the fact that “the Government cannot identify any statute in which the power to regulate includes the power to tax.” The Court cited a variety of contexts in which the power to regulate could not reasonably be read to extend to the power to tax and invoked the constitutional avoidance canon in concluding that “regulate” in IEEPA could not have meant “impose tariffs” because a contrary reading would render IEEPA partly unconstitutional, i.e., if the power to “regulate…exportation” included a grant of authority to regulate exports, IEEPA would directly violate Article I, Section 9, clause 5 of the Constitution, which expressly forbids taxation of exports.
   
   In Part II-A-2, a plurality including only Justice Roberts, joined by Justices Gorsuch and Barrett, focused on an additional basis known as the “major questions doctrine.”
3. Congress Does Not Delegate Such Unbounded Authority in Ambiguous Terms (the “Major Questions Doctrine”). The U.S. government relied on IEEPA and its delegation of power to the President to “regulate…importation” to be a delegation of the power to set tariff policy, including by imposing tariffs. The Court took issue with this assertion because “[w]hen Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits.” Congress does not silently delegate such consequential authority through ambiguous statutory text, especially as it relates to congressional “power of the purse.”
   
   The Court noted that tariff delegation in other statutes are typically explicit and carefully constrained, often specifying the relation to duties. Furthermore, the Court observed that no President had ever used IEEPA to impose tariffs in the roughly five decades since its enactment. The breadth of the economic and political stakes involved make clear that a claimed delegation of such sweeping tariff power would require unambiguous statutory authorization. The Court viewed no such delegation from Congress in IEEPA and declined to read IEEPA to give the President such significant power to unilaterally impose unbounded tariffs of the type here without a clear delegation from Congress.

In dissent, Justice Kavanaugh (joined by Justices Thomas and Alito) argued that “regulate…importation” plainly covers tariffs as a traditional trade tool, relying on statutory text, historical examples such as Nixon’s 1971 tariffs under the Trading with the Enemy Act, a predecessor statute with near identical language, and Court precedent to argue that courts and prior administrations had long accepted broad executive tariff power. Thomas added separately that the delegation of the power to impose duties on imports is constitutionally permissible because importing is a “privilege,” not an area of core legislative power.

As a result of today’s decision, the Court ultimately affirmed the Federal Circuit’s decision in V.O.S. Selections v. Trump (a case consolidated with Learning Resources before the Court) upholding the CIT’s decision that the imposition of the IEEPA tariffs exceeded the President’s authority. The issue will ultimately be remanded to the CIT for further consideration of relief on remand.[3]

On the same day the Decision was published, the President issued an Executive Order “Ending the Tariff Actions,” directing that the IEEPA Tariffs “shall no longer be in effect and, as soon as practicable, shall no longer be collected.”[4]  Alongside the Executive Order, the President also issued a Proclamation “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems” (the “Proclamation”), imposing a 10% temporary import surcharge on imports from all U.S. trading partners. Under the Proclamation, the President invoked his authority under a lesser-used provision, section 122 of the Trade Act of 1974, which empowers the President to respond to “large and serious United States balance-of-payments deficits,” including through a temporary import surcharge. The new, “Section 122” tariffs will take effect on February 24, 2026, and remain in effect for 150 days, after which the President would need to find new authority for the tariffs.[5]

III. Impacts of the Decision

The Decision is broader than many legal observers expected.  Rather than narrowly strike down only the Trafficking Tariffs and Reciprocal Tariffs (e.g., on the basis of the validity of the declared emergency), the Court held that there is no delegation of authority in IEEPA for the President to impose tariffs as a revenue-raising mechanism.

The Court did not, however, hold that Congress could not delegate such tariff-setting authority to the President, did not hold IEEPA unconstitutional, and did not otherwise restrict IEEPA’s use for sanctions, embargoes, blocking orders, or asset freezes. The Decision does not call into question other authorities pursuant to which Congress has delegated to the President the power to impose tariffs, which are described further in Part III.a below. The Decision is targeted at one specific claimed power: tariff imposition as revenue-raising. Nonetheless, there could be ancillary impacts to authority under IEEPA, discussed further in Part III.b.

a. Impact on Existing Tariffs: What is Unlawful, What Remains in Place

Although broader in scope than many anticipated in striking down all IEEPA-based tariffs, the Decision only targets a specific category among the field of tariffs that the first and second Trump administrations have imposed to date—those imposed pursuant to IEEPA as opposed to a separate statutory authority. The Trump administration has taken action, however, to impose tariffs under a variety of authorities beyond the IEEPA Tariffs.

The Decision does not address, and leaves in place, tariffs that were imposed under other statutory authorities, including:

• Section 301 Tariffs. Tariffs imposed pursuant to Section 301 of the Trade Act of 1974, 19 U.S.C. § 2411 (“Section 301 Tariffs”) will remain in place. These include the tariffs imposed under Section 301 following the U.S. government’s investigation under the first Trump administration into the laws, policies, practices, and actions of the Government of China, which resulted in significant tariffs on most Chinese origin goods ranging from 7.5% to 25%.
• Section 232 Tariffs. Tariffs imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (“Section 232 Tariffs”) will also remain in place, including those levied on steel and aluminum during the first Trump administration on national security grounds. The President under the second Trump administration has continued to initiate additional Section 232 investigations into the national security implications associated with various imports, and may continue to do so following the Decision. For example, the administration currently has ongoing investigations into imports of robotics and industrial machinery, wind turbines, unmanned aircraft systems, and imports of polysilicon, among others.[6]
• Section 201 Tariffs. So-called “safeguard” tariffs imposed under Section 201 of the Trade Act of 1974 (“Section 201 Tariffs”) have been historically imposed as safeguards against goods being imported into the United States in increased quantities so as to be a substantial cause of serious injury to the U.S. industry. These tariffs were historically used by President Trump to target certain crystalline silicon photovoltaic cells (CSPV) and modules, and large residential washing machines.
• Antidumping and Countervailing Duties. Antidumping and countervailing duties are well-established under international law, and rooted in the United States under the Tariff Act of 1930.

In addition, importers will continue to pay standard most-favored nation general tariff rates applicable to all imports, as set out under the Harmonized Tariff Schedule of the United States (“HTSUS”).

Immediately following the Decision, President Trump indicated his intention to pursue tariffs under alternative statutory authorities. Accordingly, we expect to see an increase in Section 232 national security-based investigations in light of the outcome. It should be noted, however, that any tariffs imposed under such authorities could not operate retroactively. 

As described further below in Part V, we recommend that importers carry out an analysis of the various types of tariffs they have been paying on imports to identify any IEEPA Tariffs that may qualify for a refund following today’s Decision.

b. Implications for Other IEEPA-Based Executive Actions

Although most directly relevant to importers paying the IEEPA Tariffs, the Decision also has implications for certain other IEEPA-based executive actions. As noted above, IEEPA is the federal statute most frequently relied upon by the executive branch today to impose vast economic sanctions. Most modern U.S. economic sanctions programs, including those on Iran, Russia, and Venezuela, are based on IEEPA.

The Decision does not represent a broad repudiation of executive authority under IEEPA. Rather, it holds that the power to impose tariffs must be expressly delegated to the President by Congress. The nine verbs enumerated in the relevant IEEPA delegation each authorize a distinct action, whether sanctioning foreign actors or regulating domestic actors engaged in foreign commerce, but the imposition of tariffs and the raising of revenue are not among them.

The substantial majority of IEEPA-based sanctions actions are therefore likely to remain intact following the Decision, including those imposing embargoes, blocking sanctions, and similar restrictions. Currently, the main IEEPA-based actions involving tariffs that were not directly addressed by the Decision are the recent so-called “secondary tariffs” targeted against countries that import certain items from Russia and Venezuela, which now appear likely to be nullified as well.

In addition, certain export controls and import restrictions may likely continue to rely upon IEEPA. For example, the U.S. government currently imposes certain prohibitions on imports of Russian-origin goods under U.S. sanctions laws issued on the basis of IEEPA. However, such controls are distinguishable from tariffs given that they take action that is enumerated under IEEPA by prohibiting certain imports or exports, a term which is directly within the ambit of the IEEPA’s delegation of authority to the President. In any event, most export controls on dual-use items now rely on the Export Control Reform Act of 2018 rather than IEEPA.

Notably, at least a plurality of the Court signaled support for applying the Major Questions Doctrine to matters of foreign affairs and national security. This may open avenues for future challenges to certain national security economic regulatory programs, though such measures would be expected to continue to receive significant judicial deference.

IV. Whether and How Refunds Could be Issued

As noted above, the Court left did not specify how any refunds could be issued, a point that was criticized by the dissent. It is currently uncertain how U.S. Customs and Border Protection (“CBP”) would issue refunds of the IEEPA Tariffs if the government proactively issues refunds, or is directed to do so by the courts. Historically, when CBP has needed to issue broad refunds of certain tariffs or fees in other contexts, CBP has used one of the following methods: (1) automatic refunds by relying on certain entry information identifying the nature of the tariffs paid (in this case, possibly by certain Chapter 99 classifications under the HTSUS identifying the Trafficking Tariffs and Reciprocal Tariffs on each entry); (2) a court-ordered process, with the courts directing CBP to issue refunds to parties that filed complaints with the court and submitted certain required documentation; (3) an administrative claims process requiring submission of a refund claim to CBP with certain documentation relating to the relevant transactions; or (4) filing of either a post-summary correction (“PSC”) or a protest pursuant to 19 U.S.C. § 1514 (“Protest”). 

Although previously, importers raised alarm that CBP could refuse to issue refunds of IEEPA tariffs following the liquidation of entries, the U.S. government provided assurances in certain follow-on cases to V.O.S. Selections and Learning Resources before the CIT. On December 15, 2025, the CIT denied a request for preliminary injunction against the liquidation of entries pending a final decision by the Court on the basis that the plaintiffs “cannot demonstrate irreparable harm resulting from liquidation pending a final decision in V.O.S.”^[7] The CIT specifically held that it has “authority to order reliquidation in cases involving constitutional challenges to duties under 28 U.S.C. 1581(j).” The decision was based first, on the U.S. government’s assurances in opposition to the motion, in which the U.S. government stated that it would “not object to the [c]ourt ordering reliquidation of plaintiffs’ entries subject to the challenged IEEPA duties if such duties are found to be unlawful,” and on judicial estoppel, which “would prevent the Government from taking an inconsistent approach after a final result in V.O.S.”  Subsequently, the CIT unanimously agreed that it has “the explicit power to order reliquidation and refunds where the government has unlawfully exacted duties.”

V. Recommended Next Steps 

In light of the current uncertainty surrounding whether, and how, refunds may be issued following the Decision, we recommend that importers take certain precautionary steps to preserve their right to recover any amounts paid.

As an initial matter, it is an open question whether and how CBP could refund tariffs on entries that have already been liquidated and exceeded the 180-day protest period (after which point such entry is generally considered “final” from CBP’s perspective).  Given that IEEPA Tariffs were only initially implemented beginning in April 2025, it is unlikely that many entries subject to the IEEPA Tariffs have been liquidated. Until CBP issues further guidance, importers should ensure that any entries for which IEEPA Tariffs were paid either do not liquidate or remain within the 180-day protest period

Importers should also consider the following actions to be best prepared for any refund process:

1. Identify all IEEPA Tariffs Paid. Importers should initially carry out an internal review of all entries (including, where necessary, by requesting import records from a customs broker or the Automated Commercial Environment (“ACE”)) to identify and compile a list of all entries on which IEEPA Tariffs were paid.
2. Compile Documentation on Entries with IEEPA Tariffs. Importers should ensure that they have complete entry records on all entries for which IEEPA Tariffs were paid, including entry summaries, commercial invoices, packing lists, and other information required to accompany a given shipment. In addition to ensuring compliance with CBP’s recordkeeping requirements, this information may need to be submitted to CBP as part of a protest or other administrative filing for a refund.
3. Identify Liquidation Status and Protest Deadlines. Once an importer has identified all IEEPA Tariffs paid, it is important to understand the liquidation status for each entry. Entries normally liquidate within 314 days of the date of entry, and entries are considered final after the 180-day protest period. Importers can file PSCs for entries that have not yet liquidated, but protests must normally be filed following liquidation. Accordingly, it is important to understand whether an entry has been liquidated yet, or is nearing the liquidation date.
4. File Protective Protests. For entries that are nearing the 180-day protest deadline, and barring confirmation from CBP confirming that refunds may be issued past the protest deadline, importers might consider either: (1) filing requests for liquidation extensions or (2) filing protests to preserve the maximum possible chance for recovery on such entries.
5. Monitor CBP Guidance. Watch for CBP bulletins, Cargo Systems Messaging Service (CSMS) messages, and Federal Register notices regarding automatic reliquidation or refund procedures for IEEPA Tariffs. The Cleary trade team is continuing to monitor for developments in this regard.

In any event, importers who are unfamiliar with their entries or with the PSC or Protest processes are encouraged to engage a customs broker, trade counsel, or other trade professional to understand the applicable procedures and documentation requirements. If PSCs, Protests, or other administrative filings are required by CBP, importers who act promptly are likely to be better positioned to recover duties paid, given the broad scope of the IEEPA Tariffs

VI. Conclusion

The Decision’s implications are both immediate and wide-ranging. The Court’s holding – that IEEPA does not vest in the President the authority to impose tariffs – renders unlawful the billions of dollars in tariffs already collected by the U.S. government, affecting importers across virtually every sector of the economy. While the precise mechanism for recovery remains to be determined, the Decision nonetheless represents a significant development for importers who have borne the cost of these tariffs and who may now have a viable path to recoupment.

Although the refund process remains uncertain, established customs law procedures provide a viable framework for recovery. Importers should act without delay to preserve their rights. Cleary’s international trade team is continuing to track developments and is available to assist with entry audits, protest filings, PSCs, and refund recovery strategy.

[1] We previously discussed the Trafficking and Reciprocal Tariffs in blog posts available here: https://www.clearytradewatch.com/2025/08/president-trump-expands-global-reciprocal-tariffs-and-imposes-additional-tariffs-on-brazil-canada-and-india/, https://www.clearytradewatch.com/2025/07/president-trump-announces-plans-to-impose-modified-reciprocal-tariffs-and-new-tariffs-on-canada-and-mexico-on-august-1/, https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-imposes-sweeping-reciprocal-tariffs, https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-imposes-tariffs-on-canada-and-mexico-additional-tariffs-on-china, https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-imposes-additional-tariffs-on-china-delays-tariffs-on-canada-and-mexico. 

[2] We previously discussed the Federal Circuit opinion and next steps in a September 2025 blog post, available here: https://www.clearytradewatch.com/2025/09/u-s-court-of-appeals-for-the-federal-circuit-rules-against-trumps-ieepa-tariffs/.  In a May 2025 blog post we discussed the CIT’s opinion, available here: https://www.clearytradewatch.com/2025/05/u-s-court-of-international-trade-strikes-down-trumps-ieepa-tariffs/.

[3] The consolidated Learning Resources case was initially brought in the District Court for the District of D.C., and the Court vacated the District Court’s holding and remanded with instructions to dismiss for lack of jurisdiction, finding that such action could have been brought in the CIT instead,

[4] See Ending Certain Tariff Actions – The White House (February 20, 2026).

[5] See Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems – The White House (February 20, 2026).

[6] See https://www.bis.gov/about-bis/bis-leadership-and-offices/SIES/section-232-investigations.

[7] See https://www.cit.uscourts.gov/sites/cit/files/25-154.pdf.