Supreme Court Orders IEEPA Tariff Refunds
Summary
The Supreme Court has ordered refunds for tariffs imposed under the International Emergency Economic Powers Act (IEEPA), impacting goods from Canada, Mexico, China, Brazil, and India. The Court of International Trade directed CBP to begin refunding duties plus interest to importers of record.
What changed
The Supreme Court's decision on February 20, 2026, concerning tariffs imposed under IEEPA, has led to the termination of these tariffs effective February 24, 2026. Subsequently, on March 4, 2026, the Court of International Trade ordered U.S. Customs and Border Protection (CBP) to initiate a process for refunding IEEPA duties, including interest, to importers of record. This action affects tariffs previously imposed on goods from Canada, Mexico, China, Brazil, and India.
While CBP implements the refund process, importers and their customers must review contractual agreements, purchase orders, and invoices to determine their respective rights and obligations regarding the distribution of these refunds. The absence of a general legal obligation for importers to automatically pass refunds to downstream customers means that contractual terms will govern. Parties are advised to assess agreements to mitigate litigation risks, as a growing number of lawsuits alleging breach of contract, deceptive practices, and unjust enrichment have been filed. Pressure is expected from buyers, retailers, and consumers to pass down the refund benefit.
What to do next
- Review all contracts, purchase orders, and invoices related to IEEPA duties.
- Assess contractual obligations and rights concerning the distribution of tariff refunds.
- Consult legal counsel to mitigate litigation risks arising from refund distribution.
Source document (simplified)
March 25, 2026
Tariff Refunds Raise New Commercial and Contract Considerations Across the Supply Chain
Daniella Carelli Kelley Drye & Warren LLP + Follow Contact LinkedIn Facebook X Send Embed On February 20, 2026, the Supreme Court issued a decision concerning tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Shortly thereafter, the administration terminated effective February 24, 2026, all tariffs imposed under that authority, including so-called “fentanyl tariffs” imposed on goods from Canada, Mexico, and China, so-called “reciprocal” tariffs imposed at different rates on all countries, and additional IEEPA tariffs assessed on goods from Brazil and India. On March 4, Judge Eaton of the Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to begin implementing a process to refund IEEPA duties (plus interest) to importers of record.
While CBP works to implement the refund process through its ACE platform over the next several weeks when it’s expected to go live, importers and customers are left questioning what their respective obligations and rights are with respect to IEEPA refunds. Because there is currently no general obligation under U.S. customs law requiring importers to automatically distribute IEEPA refunds to downstream customers, the answer will depend on the contractual arrangement between the parties. We recommend that all parties in the supply chain impacted by the Supreme Court decision assess their agreements, purchase orders, invoices and any other statements made with respect to IEEPA duties to mitigate potential risks of litigation.
A growing number of lawsuits related to IEEPA tariff refunds have been filed alleging claims such as breach of contract, deceptive practices, and unjust enrichment. Even if suits are not formally filed, we expect retailers, consumers, logistics companies, and other buyer parties along with politicians to pressure importers to pass down the refund benefit and prompt negotiations before the refunds are issued.
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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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