March 5, 2026

Supreme Court Shakes Up Tariff Rules

Jeffrey Sims Seyfarth Shaw LLP + Follow Contact LinkedIn Facebook X Send Embed On February 20, 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The ruling invalidates the recent “reciprocal” (global baseline) tariffs and the fentanyl‑related country measures adopted under IEEPA. Other tariffs based on different statutes, such as Section 232 (e.g., steel/aluminum) and Section 301 (e.g., China measures), were not at issue and remain in effect.

The decision immediately reshapes the tariff landscape and raises practical questions about past duties, upcoming entries, and the refund process. While the Court determined that IEEPA does not authorize tariffs, it did not prescribe refund mechanics, leaving implementation to the U.S. Court of International Trade (CIT) and U.S. Customs and Border Protection (CBP).

Expected Next Steps by the Court of International Trade (CIT)

Before the Supreme Court’s ruling, the CIT had stayed the IEEPA cases that had been submitted to it, declined to suspend liquidation, and confirmed that it has authority to order reliquidation and refunds of unlawfully collected duties. With the Supreme Court’s decision now issued, the CIT is expected to lift its stay and issue implementation orders that direct how refunds will proceed.

CIT will probably now determine the structure of the refund process. The CIT will likely either establish or direct CBP to establish a refund procedure for duties already paid, although it is not yet clear how the structure, timing, and eligibility rules will work.

Refund Eligibility: Filers and Non‑Filers

Based on (i) the CIT’s reliquidation authority and (ii) CBP’s representations that it will not oppose court‑ordered reliquidation and refunds if the tariffs are unlawful, importers who have not filed their own CIT actions will likely be eligible for refunds. That said, final eligibility and procedures will depend on the CIT’s forthcoming implementation orders. Many importers filed protective CIT actions in late 2025 to ensure a judicial remedy in case refunds were not extended to non‑litigants.

Expected Actions by CBP

CBP will handle day‑to‑day implementation under the CIT’s direction, including any instructions to stop collecting IEEPA duties going forward and the mechanics of reliquidation and refunds. Given the volume of potentially affected entries and the size of collections reported publicly, processing will be a significant undertaking and could take several months.

Some importers have requested CBP to stop collecting scheduled bank withdrawals, but have been refused pending CIT instructions.

Refund procedures will be administered by CBP, subject to CIT oversight. Processing billions in refund claims is likely to be a logistical challenge and involve long delays.

CBP had previously announced that it will not contest the CIT’s decisions. However, the Trump Administration may contest large-scale repayments and may give CBP new instructions.

Practical Steps Importers Should Take Now

Immediately Review and Track Entry Liquidation Status

• Determine whether each affected entry is liquidated or unliquidated, as this affects the ability to file protests or seek refunds.
• Identify protest deadlines for any liquidated entries.
• Although protests are a traditional route after liquidation, the CIT has previously stated that it can order reliquidation to correct unlawfully collected duties even after liquidation. When goods are imported into the United States, CBP initially treats the duty amount as estimated. Later, usually many months afterward, CBP performs a final calculation of the duties, fees, and taxes owed for that shipment. At that point, the duty amount is locked in, or liquidated, and CBP considers the entry closed. After liquidation, an importer generally has 180 days to file a protest if it believes the duty was wrong. After that deadline, the entry is closed to challenge. If an entry has liquidated and the protest window has expired, it has in the past been much more difficult to recover duties unless a court orders otherwise.

Gather and Organize Documentation

• Pull all import data for affected entries from the ACE (Automated Commercial Environment), CBP’s online tracking system.
• Assemble entry packets, including commercial invoices, entry summaries, and proof of IEEPA‑related customs payments.
• Maintain a centralized internal database of all entries that includes IEEPA‑based duties.

Consider Whether to File a CIT Action

• Because the Supreme Court did not address the scope of refunds and the appeals court previously cautioned against nationwide relief, filing an individual CIT action may be advisable to preserve rights.
• Importers without pending litigation may face uncertainty regarding refund eligibility. Some importers are deciding to file now to ensure a judicial forum if implementation for non‑litigants proves narrower than expected.

Monitor CBP Guidance and Prepare for Rapid Changes

• Watch for CBP implementation instructions suspending further IEEPA duty collection.
• Review supply chain and sourcing strategies, as new tariffs are likely to be implemented and sourcing may still need to be flexible if possible. Although IEEPA is no longer available as a tariff tool, the Trump Administration may pivot to other authorities, each of which could reintroduce tariffs under different frameworks, although, unlike IEEPA, each of these alternatives are limited by time, by maximum rates, and by requiring specific justifications. In addition, Congress may still authorize new types of tariffs. One day after the Supreme Court decision, President Trump has announced a 15% global tariff under a new authority, Section 122 of the Trade Act of 1974.

Existing tariff authorities include the following:

| Authorization | Purpose | Example of Use | Rate |
| Section 122 (Trade Act of 1974) | Allows temporary tariffs for balance‑of‑payments emergencies for up to 150 days. | Global tariffs (10–15% range announced Feb 20–21, 2026) | 10–15% |
| Section 232 (Trade Expansion Act of 1962) | National security‑based tariffs | Steel, aluminum, semiconductors, trucks, etc. | ~25% |
| Section 301 (Trade Act of 1974) | Tariffs responding to unfair trade practices | China‑origin goods, especially advanced tech | Up to 50% |
| Section 338 (Tariff Act of 1930) | Retaliatory tariffs against discriminatory foreign practices | Not used since 1930s (and essentially replaced by Section 301 in modern times) but still available | Up to 50%, or full blocking of imports from offending country |
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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