Today, 20 February, the Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized. Under IEEPA, the Trump Administration implemented reciprocal tariffs on imports nearly all U.S. trading partners as well as additional country-specific tariffs on imports from China, Canada, Mexico, and Brazil. The decision sets the precedent that IEEPA does not give the President authority to impose tariffs as a measure of “regulating imports.”
The Supreme Court’s decision does not impact any other tariff actions that the Trump Administration has implemented. This includes any Section 232 or Section 301 tariffs and their current investigations.
Additionally, during a press conference earlier today President Trump announced his intentions to replace IEEPA tariffs with a 10% baseline tariff leveraging Section 122 of the Trade Act of 1974 and additional investigations under Sections 232 and 301. Tariff action under Sect. 122 is capped at 15% and can be implemented for a maximum of 150 days unless extended by Congress.
Please see below for additional information regarding the Supreme Court’s decision.
Which IEEPA tariffs are impacted by the Supreme Court’s decision?
The decision affects all tariffs implemented under IEEPA (i.e., IEEPA/trafficking tariffs on non-USMCA compliant imports from Canada and Mexico, IEEPA/fentanyl tariffs on goods from China, IEEPA/country-specific reciprocal tariffs, and IEEPA Brazil domestic policy tariffs).
Based on 2025 YTD data (latest data available Jan-Nov), the value of imports subject to IEEPA totaled $6 B and IEEPA tariffs paid on food processing and packaging machinery is estimated at over $500 M.
What will the refund process look like?
The decision did not directly address the scope and implementation of tariff refunds, which has been sent back to the United States Court of Appeals for the Federal Circuit final deliberations. The SCOTUS ruling also reaffirmed that the Court of International Trade (CIT) has “exclusive jurisdiction” on tariff challenges against the Government. During the President’s press conference, he indicated the issue of refunds will likely require CIT litigation. As such, the process for any refunds is not yet clear at this time.
What can we expect next?
An Executive Order (EO) for Sect. 122 tariff action is expected to be published later today, and EOs for Sect. 232 and 301 investigations are expected in the coming days. We will monitor for additional information to understand whether exemptions for “unavailable natural resources” under IEEPA Annex II (global product exemptions), PTAAP Annex III (bilateral agreement eligible exemptions), and USMCA compliant products (for Mexican and Canadian imports) will continue under alternative legal authorities. As well, monitoring for how a shift in the legal authorities used will impact the announcement and implementation of reciprocal trade agreements that provided new market access for US. exports.
Finally, the U.S. Customs and Border Protection (CBP) has not yet published official guidance regarding the SCOTUS decision which means IEEPA tariffs will continue to be collected until CBP guidance is issued and operationalized by customs brokers.
Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems
Continuing The Suspension of Duty-Free De Minimis Treatment for All Countries
