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The US Supreme Court ruled last week that the International Economic Emergency Powers Act (IEEPA) does not authorize the President to impose tariffs. In a much awaited 6-3 decision issued on Friday, February 20, 2026, the Court held that "regulat[ing] . . . importation" under IEEPA does not include the power to levy taxes (tariffs). However, the majority opinion did not address what should happen with the IEEPA tariffs that the US Government has already collected—which totaled more than $133.5 billion as of December 14, 20251—leaving the process and eligibility for refunds on already liquidated entries to be determined by lower courts. President Trump immediately announced new interim tariffs as well as plans for other alternative tariffs to take the place of the IEEPA tariffs in the near future.
I. The Supreme Court Decision
In the first few months of 2025, President Trump issued Executive Orders imposing tariffs under IEEPA on goods from China, Canada, and Mexico related to fentanyl trafficking and "Liberation Day" reciprocal tariffs on goods from almost all countries in the world. He later imposed additional tariffs under IEEPA on goods from Brazil and India. In all instances, the President asserted that the tariffs were a means of "regulating imports."
On Friday, in Learning Resources, Inc. v. Trump, the Supreme Court noted that President asserted "the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time" based on the two words "regulate" and "importation," which are "separated by 16 others" in the statute. The Supreme Court held that "[t]hose words cannot bear such weight."
Six justices—Chief Justice Roberts and Justices Gorsuch, Barrett, Kagan, Sotomayor, and Jackson—held that the text of "the terms of IEEPA do not authorize tariffs" because the "lengthy list of powers" in IEEPA notably omits "any mention of tariffs or duties"; the ordinary meaning of the term "regulate" does not include taxation; and the Government failed to identify any other statute "in which the power to regulate includes the power to tax." They concluded that IEEPA fundamentally differs from other statutes in which Congress "consistently has" granted "the distinct and extraordinary power to impose tariffs" "expressly," "clearly and with careful constraints."
Three of the justices—Chief Justice Roberts and Justices Gorsuch and Barrett—applied the "major questions" doctrine to determine that IEEPA does not provide clear congressional authorization for an extraordinary delegation of "the core congressional power of the purse" via imposition of tariffs that have "astonishing" economic and political consequences. Justices Kagan, Sotomayor, and Jackson declined to apply the "major questions" doctrine and relied on the statutory text alone.
In their principal dissent, Justices Kavanaugh, Thomas, and Alito asserted that the statutory text, history, and precedent "clearly" indicate that Congress authorized the President to impose tariffs under IEEPA as a common tool of regulating importation. They noted that tariffs are a less severe measure than banning imports entirely, which the parties agreed that IEEPA permits.
II. Refund Options
While the IEEPA tariffs have now been terminated, refunds will not be automatic. The Supreme Court majority did not order a refund process (or even mention refunds) for the IEEPA tariffs that importers have already paid. Instead, the majority merely affirmed a decision of the US Court of Appeals for the Federal Circuit (Federal Circuit) that remanded the pending case to the US Court of International Trade (CIT) to determine whether the CIT could issue a universal injunction. The dissent recognized that a refund process "is likely to be a 'mess'" here has not been formal guidance, and none is likely forthcoming.
The potential refund options are: (1) filing lawsuits at the CIT, (2) filing Post Summary Corrections on unliquidated entries, and (3) congressional action.
A. Lawsuits at CIT
There have been clear signals from the courts and the President that importers should file lawsuits at the CIT to try to claim refunds.
All nine Supreme Court justices agreed that the CIT has exclusive jurisdiction over the cases because they arise out of a US law providing for tariffs (as modifications to the Harmonized Tariff Schedule of the United States) under 28 U. S. C. §1581(i)(1).
In December 2025, a three-judge panel held that the CIT "has 'the explicit power to order reliquidation and refunds where the government has unlawfully exacted duties'" and "has jurisdiction pursuant to 28 U.S.C. § 1581(i)" over cases claiming IEEPA refunds.2 The statute of limitations for such cases is two years.3
At a press conference following the Supreme Court decision, the President said that the issue of refunds "wasn't discussed. I guess it has to get litigated for the next two years . . . We will end up in court for the next five years." These remarks indicate that the Administration is not expected to initiate a refund process voluntarily.
Butzel has implemented a unique rapid-response strategy to help businesses with refund filing claims at the CIT. Please contact the authors of this Client Alert or your Butzel attorney for more information or assistance.
B. Post Summary Corrections
In addition, perhaps the quickest and easiest way for importers to request refunds is by submitting Post Summary Corrections for unliquidated entries. Post Summary Corrections must be submitted within 300 days of entry and up to 15 days of the scheduled liquidation date, whichever is earlier. Butzel attorneys are ready to assist with such Post Summary Corrections.
C. Congressional Action
There is a chance that Congress could authorize a refund process in light of the Supreme Court decision. But the President might veto any congressional action, and it is unclear whether there would be a veto-proof majority in Congress to enact it.
III. The New Tariff Landscape
A. IEEPA Tariffs Officially End Today
On Friday evening, the President issued an Executive Order ending the IEEPA tariffs, stating that the tariffs "shall no longer be in effect and, as soon as practicable, shall no longer be collected." Late last night, US Customs and Border Protection issued guidance stating that the IEEPA duties will no longer be in effect or collected for goods entered for consumption or withdrawn from warehouse for consumption, on or after 12:00 a.m. EST on February 24, 2026.
B. New Section 122 Tariff Effective Tomorrow
At the same time, the President issued a Proclamation imposing a 10% tariff effective February 24, 2026, for 150 days (i.e., until July 24, 2026) under Section 122 of the Trade Act of 1974. Section 122 authorizes the President to proclaim "a temporary import surcharge" duty of up to 15% on US imports when required due to fundamental international balance-of-payments problems. On Saturday, the President announced on social media that this tariff would increase to 15% (however, no official Proclamation has been issued yet to implement that change).
The Section 122 tariff functionally replaces the reciprocal tariffs and the Canada and Mexico fentanyl tariffs. It applies to all products (with certain enumerated exceptions) and all countries (except imports that comply with the United States-Mexico-Canada Agreement (USMCA) and textiles and apparel that comply with the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)). The Section 122 tariff does not stack with Section 232 duties (including those applicable to autos and auto parts); however, aluminum, copper, and steel derivative products are subject to the Section 122 tariff on the value of the non- aluminum/copper/steel content. There is also an "on-the-water" exception for goods that were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States before 12:01 a.m. EST on February 24, 2026, and which are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. EST on February 28, 2026.
By its terms, Section 122 requires an Act of Congress to extend the duties beyond the 150-day period. There has been speculation that the Administration could potentially allow them to expire, and then re-issue them.
The new Section 122 tariff may also quickly face legal challenges. Many economists have been contending that the United States can no longer face balance-of-payment problems since it adopted a floating exchange rate because capital and foreign exchange influxes counteract trade deficits, and that Section 122 is effectively moot. While litigation seems likely, it is less likely that application of the tariff would be stayed in the interim.
C. Continued De Minimis Suspension
Also on Friday evening, the President issued an Executive Order continuing the suspension of de minimis duty-free treatment for low-value shipments. Since last year, the President has invoked IEEPA to require of payment of all duties otherwise due on such shipments and payment of certain per-item duties on postal shipments. In July 2025, the CIT stayed a case challenging the suspension of de minimis treatment pending the Supreme Court's decision.4 This case should be moving forward soon.
D. Other Duties Remain in Effect
The President has made clear all other tariffs remain in effect, including:
- the tariffs on imports from China under Section 301 of Trade Act of 1974 (7.5% or 25% for most products); and
- the tariffs on imports of autos and auto parts; medium- and heavy-duty vehicles and parts; buses; certain advanced semiconductors; aluminum, copper, steel, and derivatives; softwood timber and lumber; and kitchen cabinets, vanities, and upholstered wooden furniture under Section 232 of Trade Expansion Act of 1962.
The Supreme Court previously upheld the President's authority to impose import license fees under Section 232,5 and declined to revisit the issue after the Federal Circuit upheld the Section 232 tariff on imports of steel from Turkey in 2021.6
In September 2025, the Federal Circuit upheld the Section 301 tariffs on Chinese imports.7
IV. Potential Future Tariffs
During Friday's press conference, the President confirmed that he intends to impose additional tariffs under other authorities.
The Administration has already initiated Section 301 investigations on imports from Brazil and China and Section 232 investigations on:
- Semiconductors & Semiconductor Manufacturing Equipment;
- Polysilicon & Derivatives;
- Robotics & Industrial Machinery;
- Pharmaceuticals & Pharmaceutical Ingredients;
- Commercial Aircraft, Jet Engines, & Parts;
- Drones/Unmanned Aircraft Systems (UAS) & Parts & Components;
- Wind Turbines & Parts & Components; and
- Personal Protective Equipment (PPE) & Medical Consumables, Devices, & Equipment.
These investigations may result in tariffs on such products.
The Administration is expected to initiate additional tariff actions under other authorities over the next five months. US Trade Representative Jameson Greer has already stated that the Government will initiate Section 301 investigations on most major trading partners, which could result in additional tariffs.
The dissenting Supreme Court Justices speculated that "the decision might not substantially constrain a President's ability to order tariffs going forward" because the President can impose tariffs under Sections122, 232, and 301, as well as Section 201 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930. The President cited all of those statutes at Friday's press conference.
Section 201 authorizes safeguard duties on imported goods that are causing or threatening serious injury to a domestic industry. The US International Trade Commission must complete an investigation first.
Section 338 provides that the Present can impose "new or additional duties" on any foreign country that imposes "any unreasonable charge, exaction, regulation, or limitation which is not equally enforced upon the like articles of every foreign country" or "[d]iscriminates in fact against the commerce of the United States, . . . in such manner as to place the commerce of the United States at a disadvantage compared with the commerce of any foreign country." There is some speculation that Section 338 has lapsed because it is inconsistent with the US's implementation of its WTO commitments or has been superseded by other statutes. No President has ever imposed duties under that statute.
Regardless, businesses should continue to expect elevated tariff levels and plan accordingly.
Footnotes
1. See U.S. Customs & Border Protection, Trade Statistics, (last modified Feb. 2, 2026).
2. AGS Co. Auto. Sol'ns v. U.S. Customs & Border Protection, Consol. No. 25-00255, slip op. at 6–7 (Dec. 15, 2015).
3. See 28 U.S.C. § 2636(i).
4. See Axle of Dearborn, Inc. v. Dep't of Commerce, 791 F. Supp. 3d 1363, 1366 (2025).
5. See FEA v. Algonquin SNG, Inc., 426 U. S. 548 (1976).
6. See Transpacific Steel LLC v. United States, 4 F.4th 1306 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 1414 (2022).
7. See HMTX Indus. v. United States, 156 F.4th 1236 (Fed. Cir. 2025).
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