Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know About Refunds

Today, the U.S. Supreme Court decided that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful. The Court held that the statute does not grant the president the authority to impose broad-based tariffs absent clear congressional authorization.

The decision was a 6-3 ruling, with Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito dissenting.

Background

IEEPA, enacted in 1977, authorizes the President to regulate certain economic transactions after declaring a national emergency in response to an unusual and extraordinary foreign threat. Historically, the statute has been used to impose sanctions to freeze assets and restrict financial transactions.

The Court found that, while IEEPA authorizes economic sanctions, it does not give the President the broad power to impose tariffs. Only Congress has that authority under the Constitution. The majority stressed that emergency powers do not mean unlimited tariff powers. This ruling only affects tariffs under IEEPA and does not change tariffs imposed under other laws, such as:

• Section 232 of the Trade Expansion Act of 1962: This law allows the President the ability to impose a tariff for national security reasons, limited to specific industries.

• Section 301 of the Trade Act of 1974: This law allows the President the ability to impose a tariff on specific countries with unfair trade practices.

• Section 338 of the Tariff Act of 1930: This law allows the President the ability to impose a tariff up to 50% on specific countries with discriminatory trade practices.

• Section 122 of the Trade Act of 1974: This law allows the President to impose up to a 15% tariff for a maximum of 150 days when there is a significant trade deficit.

Those tariffs remain in place unless challenged or modified separately.

Potential Refund Exposure

The federal government has collected about $175 billion in duties from the now-invalid IEEPA tariffs. Depending on how the decision is carried out, the U.S. may have to refund hundreds of billions of dollars to importers who were affected.

At this time, however, no guidance has been issued regarding how the refund process will operate. It remains unclear whether refunds will be automatic, whether importers must file former protests, or whether additional litigation will be required to recover amounts paid.

What Importers Should Do Now

Although procedural details are still unknown, importers should begin evaluating their exposure as soon as possible. Refund eligibility may depend on several factors, including:

• Whether the goods were subject to the invalidated IEEPA tariffs,

• Whether entries have liquidated,

• Whether protests were timely filed,

• Applicable statutes of limitation.

Because customs law is highly procedural and deadline-driven, timing is critical.

Importers should promptly:

• Contact their customs broker to review entry history and identify affected imports.

• Consult with an import specialist or customs attorney to assess refund eligibility and determine the appropriate procedural path.

• Preserve documentation supporting duty payments.

Conclusion

The Supreme Court's 6-3 decision represents a major development in U.S. trade law and reinforces constitutional limits on executive authority. While other tariff programs, such as section 232 and 301, remain unaffected, the invalidation of IEEPA-based tariffs might expose the government to considerable refund liability.

Until formal guidance is issued, importers should act proactively to assess their position and protect potential refund claims.