Supreme Court Invalidates IEEPA Tariffs: Implications and Next Steps

On February 20, 2026, the U.S. Supreme Court issued a 6–3 decision (in Learning Resources v. Trump) holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs.

Chief Justice Roberts, writing for the majority, stated that if Congress intended to grant tariff authority under IEEPA, “it would have done so expressly, as it consistently has in other tariff statutes.” The Supreme Court concluded that Article I, Section 8 of the U.S. Constitution assigns tariff authority to Congress and that IEEPA’s authorization to “regulate … importation” does not clearly encompass the power to levy duties.

Below, the Pillsbury International Trade Team addresses the immediate impact of the ruling, what companies should consider regarding their rights to refunds of IEEPA duties, and the measures already being discussed by the President to impose new duties.

The Supreme Court’s Decision
The Supreme Court affirmed the Federal Circuit’s judgment invalidating tariffs imposed under IEEPA and foreclosed the use of IEEPA by the President to impose tariffs altogether. The Federal Circuit’s decision leaves further proceedings to the Court of International Trade (CIT), including consideration of the scope of relief.

The specific measures that were challenged and addressed by the Supreme Court included:

• Tariffs imposed under IEEPA on imports from most countries as part of a declared national emergency based on persistent U.S. trade deficits (i.e., reciprocal tariffs); and
• Tariffs imposed under IEEPA on Chinese, Mexican and Canadian goods in response to a national emergency declared over illegal fentanyl entering the United States. Importantly, the Supreme Court did not confine its analysis to those particular tariff programs. Rather, it held categorically that IEEPA does not authorize the President to impose tariffs. In other words, the decision not only invalidates the specific executive orders at issue but also would foreclose the use of IEEPA as a statutory basis for future tariffs. This is a broader and more categorical ruling than many observers anticipated.

The Supreme Court did not limit its ruling to prospective application or suggest that previously collected tariffs are insulated from challenge. At the same time, the majority opinion remained silent on remedies beyond affirming the Federal Circuit’s invalidation of the tariffs. Justice Kavanaugh’s dissent expressly warned that the decision may require “refund[ing] billions of dollars” and that the refund process is likely to be a “mess.”

In the case parallel to Learning Resources v. Trump, initiated in the U.S. District Court for the District of Columbia , the Supreme Court vacated the judgment and remanded with instructions to dismiss for lack of jurisdiction, concluding that this case falls within the exclusive jurisdiction of the CIT.

In a 63-page dissent, written by Justice Brett M. Kavanaugh, who was joined by Justices Clarence Thomas and Samuel A. Alito Jr., the dissenters argued that the President should be able to impose tariffs under his power to conduct foreign affairs. The dissenters raised concerns about how the refund process for IEEPA duties will play out and the uncertainty this ruling may cause for the trade arrangements the Administration has negotiated pursuant to the imposition of IEEPA tariffs.

Immediate Impact of the Ruling
Although the Supreme Court has now held that the President’s IEEPA duties are unlawful, U.S. Customs and Border Protection (CBP) systems will not automatically update. We expect CBP to issue formal guidance and update the Harmonized Tariff Schedule (HTS) to remove the IEEPA-related provisions, but it might not do so immediately.

The majority opinion does not address refund mechanics or provide guidance on the remedial process. Thus, at this time, considerable uncertainty remains regarding the timing and process for potential refunds, the treatment of entries already liquidated, and the procedure moving forward. President Trump delivered remarks this afternoon suggesting that the government will not voluntarily issue refunds and that litigation may be required.

A number of companies previously filed lawsuits tied to the outcome of the Supreme Court’s decision. The government will likely need to address the active complaints, and the CIT may coordinate proceedings (e.g., through a steering committee structure similar to that used in prior large tariff litigation).

Likely Next Steps for Additional Duties
From the President’s news conference this afternoon, we understand that the Trump administration intends to move quickly to impose new and/or increased tariffs under alternative statutory authorities (e.g., Sections 232, 301, 201, 338 and/or 122). Imposition of tariffs under these statutory authorities either requires there to be additional procedures taken before tariffs can be imposed or limits what new tariffs can be imposed.

Today, the President specifically mentioned an impending new Executive Order imposing a 10 percent additional duty on imports from all countries pursuant to Section 122. The President stated his intention for such new duties to take effect in three days, but the precise date on which any such tariffs will take effect is not yet known. At the time of this writing, the text of the Executive Order is not yet available, which will lay out the exact details of the new measure. Importantly, Section 122 limits tariffs for a duration of 150 days, unless an extension is approved by Congress.

The President also mentioned that his Administration will be “initiating several Section 301 and other investigations” to impose additional duties to combat alleged unfair trade practice. We expect the Administration will also consider revising existing Section 232 measures to increase their scope.

It remains unclear what impact today’s ruling will have on the trade “deals” the administration has negotiated with a number of countries. We do not currently expect those countries to abandon their commitments.

Pillsbury’s International Trade Team is monitoring developments closely.

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