On February 20, 2026, the Supreme Court of the United States ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the President the power to regulate importation through tariffs. This has sweeping implications for the broad reciprocal tariffs (on all countries) and the "fentanyl" tariffs (on Canada, Mexico, and China) that President Trump, since February 2025, asserted under IEEPA and for more than one hundred billion dollars in duties that the U.S. Customs and Border Protection (CBP) has collected. The high court's decision now sets the stage for potential refunds for all parties who imported goods since February 2025 and paid reciprocal and/or "fentanyl" duties.
Specifically, the Supreme Court explained that "[o]ur task today is to decide only whether the power to regulate . . . importation, as granted to the President by IEEPA, embraces the power to impose tariffs. It does not." Learning Resources Inc. v. Trump at 20. The Supreme Court went on to 'hold that IEEPA does not authorize the President to impose tariffs.' Id. This means that tariffs imposed pursuant to IEEPA are not valid, including:
- "Liberation Day" Reciprocal tariffs under Executive Order 14257, covering countries at a range of rates;
- Anti-Fentanyl Trafficking tariffs under Executive Order 14195 covering imports from China; and
- Anti-Fentanyl Trafficking tariffs under Executive Order 14193 covering imports from Canada.
The Supreme Court decision raises several critical questions: (1) whether striking down IEEPA tariffs will lead to reimbursement of duties paid under the, now invalid, tariff regimes, (2) who may qualify for reimbursement, and (3) how will the Trump administration respond to the invalidation of a primary foreign policy and geoeconomic tool that has been deployed by the Trump administration for the past year.
Restitution, or refunds, for duties paid under invalidated tariff regimes, is a primary question for many parties. Prior to the Supreme Court decision, some importers filed suit against the United States under 28 U.S.C. § 1581(i), and others filed protests with CBP under 19 C.F.R. Part 174 in order to preserve their rights to refunds of IEEPA duties paid in the event that the Supreme Court ruled against the tariffs. The suits and protests were filed to give protection for importers with respect to entries that had been or were to be liquidated by CBP prior to the Supreme Court rendering its decision.
Now that the Supreme Court has ruled that the IEEPA duties are unlawful, the question becomes to how importers should seek reimbursement of the IEEPA duties. Importers may be able to file Post-Summary Corrections (PSCs) in the Automated Commercial Environment (ACE) with respect to the entries that were made where IEEPA duties were paid, but the entries have not been liquidated by CBP. It is unclear how long CBP may take to process the PSCs and issue refunds in these cases.
For those entries that have been liquidated by CBP, the only mechanisms that may be available to seek reimbursement of duties paid are through the CBP protest process or through the 28 U.S.C. § 1851(i) legal claims process. With respect to the protest process, 19 U.S.C. § 1514(c)(3) provides importers with the ability to file a protest of decisions of CBP – with a liquidation of an entry being such a "decision" – within 180 days after the date of liquidation or, in some circumstances, the date on which the decision was made. Under 19 U.S.C. § 1515(a), CBP must either "deny" or "allow" a protest "in whole or in part." If CBP allows the protest, "any duties . . . found to have been assessed or collected in excess shall be remitted or refunded . . ." Section 1515 gives CBP up to two years to review a protest, but allows a protester to request "accelerated disposition." If CBP does not decide the protest within 30 days of a request for accelerated disposition, the protest is "deemed" denied. CBP's denial of a protest allows the protester to then seek judicial relief, such as a 28 U.S.C. § 1581(i) claim.
We expect that CBP will be flooded with a significant volume of protests and will seek to find a more streamlined mechanism for the review of IEEPA tariff refunds than through the typical protest process, such as through the establishment of an internet-based IEEPA duty refund clearinghouse. In particular, it is foreseeable that a very large volume of importers file Section 1515 protests and request "accelerated disposition" of their protests to avoid the two-year time given to CBP by statute. This, in turn, creates a high likelihood that such "accelerated disposition" protests will not be resolved in the relevant time frame, thus resulting in the underlying protests being "deemed" to be denied and the protestors being forced to file their own 28 U.S.C. § 1851(i) claims.
As a result, there is a high likelihood that CBP will act to create a clearinghouse for receiving applications for IEEPA tariff reimbursement, both for liquidated and unliquidated entries. CBP created a similar program following the 1998 Supreme Court decision in the United States v. United States Shoe Corporation case involving the invalidation of harbor freight fees as unlawful taxation of exports. In response to the Supreme Court decision in said case, CBP established a temporary program enabling refund requests for one year. Such an approach could offer parties and the U.S. Government a streamlined approach to refunding IEEPA tariffs.
There is still considerable uncertainty as to how these processes will work out. Proposals by CBP as to the resolution of any refunds will almost certainly be subject to additional litigation. Any such litigation could delay refunds by several years.
In addition, several hours after the Supreme Court's decision and as we advised in May 2025, President Trump announced that he would be taking several steps to replace the IEEPA tariffs, including signing an executive order imposing a global 10% tariff pursuant to Section 122 of the Trade Act of 1974, initiating Section 301 investigations into certain products, and consulting with Congress regarding additional tariff powers. This proposed Section 122 tariff rate was subsequently proposed by President Trump at a global rate of 15%. Given the central role tariffs have played for this administration, it is likely that Section 301 investigations will proceed on accelerated timetables to provide maximum leverage with trading partners.
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