Supreme Court Overturns Trump’s IEEPA Tariffs

Today, Feb. 20, 2026, the Supreme Court of the United States (SCOTUS) issued its much-anticipated decision in the Learning Resources, Inc. v. Trump case, which consolidated the title case and V.O.S. Selections v. Trump, resolving whether the International Emergency Economic Powers Act (IEEPA) authorizes the President to impose the challenged import tariffs. The Court held that IEEPA tariffs were unlawful and affirmed the Federal Circuit’s judgment accordingly.

• Bottom line: In a 6-3 decision, the Supreme Court held that the IEEPA statute does not allow the President to impose tariffs, meaning that all IEEPA tariffs were not lawful ab initio (from the beginning).
• Refunds: Today’s Supreme Court opinion did not establish a clear refund process. Details will likely evolve in the coming days, and we will continue to monitor for further instructions from the U.S. CBP and the lower courts.
• The Court of International Trade (CIT) is well positioned to order relief through court-ordered reliquidation in pending 28 U.S.C. 1581(i) lawsuits, with CBP implementing the refunds after the CIT issues instructions.
• It may be possible for unliquidated entries – that is entries that have not yet been finalized by CBP – to have their tariffs corrected and refunded through the administrative Post Summary Correction and liquidation process. It will be important to watch for additional guidance on potential refund processes in the coming days.
• Action items: Importers should promptly inventory IEEPA duty exposure, identify liquidation timelines, update their electronic banking information, and consider whether to join the numerous protective CIT lawsuits to seek court-order tariff relief.

Background

The decision follows a rapid sequence of proceedings. In May 2025, the CIT held that IEEPA did not authorize the challenged tariffs and set them aside. In August 2025, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, affirmed that holding. The Supreme Court granted review and heard consolidated oral argument on Nov. 5, 2025.

Understanding the Decision

1. Which IEEPA tariffs are affected?

The Court held categorically that IEEPA does not authorize the President to impose tariffs. This means that the ruling extends beyond just the worldwide reciprocal and the Canada-Mexico-China trafficking tariffs that were expressly argued before the Court. The defect was lack of statutory authority that was not tied to specific countries, rates, or duration. No partial validation or rate limitation was recognized. As a result, all tariffs imposed pursuant to IEEPA – and all tariffs paid under IEEPA – fall within the scope of the decision as unlawful.

2. Is there a refund process?

The Court did not establish a clear process for refunds. As expected, the refund process is likely to be administered through a mix of agency action by the U.S. CBP and court-ordered guidance from the lower courts, such as the CIT. IEEPA refunds should become available to all importers of record, which paid IEEPA tariffs directly to the U.S. CBP. Given the nature of the Supreme Court’s ruling that IEEPA does not permit the President to impose tariffs, there is and was no legal support for the collection of IEEPA tariffs. Downstream purchasers, which did not directly pay tariffs to the U.S. CBP, should review supply contracts and consult counsel for assessment of tariff refund eligibility.

SCOTUS Has Spoken So What Happens Next?

In anticipation of today’s ruling, many importers filed protective actions at the CIT under 28 U.S.C. 1581(i) to preserve refund rights while entries continued to liquidate. The Congressional Research Service has reported that, as of December 10, 2025, importers have paid about $129 billion in estimated deposits, and roughly 19.2 million of roughly 34 million IEEPA-covered entries remained unliquidated, making entry status the gating fact for refund strategy.

The CIT has been administratively managing and staying many of these cases pending the Supreme Court’s decision and has issued guidance indicating that, if the tariffs are ultimately held unlawful, the CIT  has the authority to order refunds through reliquidation and the government stated on record that it would not contest the CIT’s authority to order reliquidation and resulting refunds for plaintiffs.

With the Supreme Court’s decision now in hand, we expect the CIT to lift stays, issue implementation orders, and begin setting a roadmap for reliquidation and refunds. Importers that were already on the CIT’s docket may be better positioned for earlier relief once Customs and Border Protection (CBP) is directed to execute refunds. Late participation may still be possible depending on the Supreme Court’s scope and the CIT’s implementation framework; timing will matter. Section 1581 (residual jurisdiction) actions generally must be filed within two years of accrual, which is potentially when the tariffs were paid, so delay can quietly become a waiver.

The Executive Suite of Trade Tools

Today’s ruling curtails the President’s use of IEEPA as a tariff tool, but it does not end the administration’s ability to raise duties or affect imports through other means. The IEEPA statute authorizes the President to take various other actions, such as investigate, block during the pendency of an investigation, prevent or prohibit importation or exportation. While IEEPA authorizes the President to take certain non-tariff actions, other tariff authorities also remain available such as under Section 232 and Section 301. And the Trump administration is clear that it will use the authorities available to it to enact change with respect to U.S. imports. Therefore, even though the Supreme Court held that the imposition of tariffs under IEEPA is unlawful, the President has various other tools to affect imports into the United States.

In recent months, administration officials have indicated they plan to replicate a similar tariff structure through other statutes, including Sections 301 and 122 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. In December 2025, Treasury Secretary Scott Bessent publicly suggested that, if needed, the administration could ‘re-create the exact tariff structure’ using other statutory authorities, including Sections 301, 232, and 122.

• Section 301: The Federal Circuit’s Sept. 25, 2025 decision in HMTX Industries v. United States affirmed the legality of the List 3 and List 4A Section 301 tariffs on China. However, that decision is awaiting review by the Supreme Court.
• Section 232: Section 232 investigations can take up to 270 days for Commerce to report to the President, after which the President has decision and implementation windows; because they are based on national security findings, the process is slower than IEEPA.
• Section 122: Section 122 permits a temporary import surcharge of up to 15% ad valorem for up to 150 days (unless extended by Congress), allowing fast action but with statutory caps.

In other words, the Supreme Court may have retired one tariff instrument, but the orchestra remains. Importers should continue to monitor White House actions, consult with brokers and counsel, and be prepared to pivot quickly as the legal basis for tariffs shifts.

Contact Clark Hill

If this development is of interest to your business or if you have questions regarding the content of this alert, please contact any member of Clark Hill’s International Trade Practice for additional details and strategic guidance.

• Mark Ludwikowski (mludwikowski@clarkhill.com; 202.640.6680)
• Kevin Williams (kwilliams@clarkhill.com; 312.985.5907)
• Kelsey Christensen (kchristensen@clarkhill.com; 202.230.9889)
• Aristeo Lopez (alopez@clarkhill.com; 202.552.2366)
• Ashley Gifford (agifford@clarkhill.com; 202.640.6655)
• Laura M. Quesada (Lquesada@clarkhill.com; 202.240.0170)
• Amal Sheheen (Asheheen@clarkhill.com; 202.552.2354)
• Onjoly Purification (Opurification@clarkhill.com; 202.552.2361)

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