The U.S. Supreme Court has held that the broad, emergency-based import tariffs implemented by President Trump under the International Emergency Economic Powers Act (IEEPA) are invalid. In a February 20, 2026 ruling, the Court determined by a 6-3 vote that the law provides Congress with the power to tax imports, not the President.
The Supreme Court based its ruling on a “major questions” doctrine, which requires Congress to clearly delegate its legal powers of decision-making to the President, a test the Court believes was not met in this case. The IEEPA, passed in 1977, authorizes the President to respond to national emergencies based on foreign threats, but provides Congress with the power to impose tariffs. Chief Justice John Roberts pointed to two words in the law, “regulate” and “importation”, which the President had used to assert his power to unilaterally impose tariffs but said: “Those words cannot bear such weight.”
With the Court clarifying the limits of presidential tariff authority under IEEPA, the Administration moved quickly to identify an alternative path. One day after the Supreme Court’s ruling, the President announced a temporary global tariff under Section 122 of the Trade Act of 1974. Initially set at 10% and expected to rise to 15%, the tariff is limited to 150 days without further congressional authorization and partially offsets the revenue gap created by the invalidated IEEPA-based duties. Several states and industry groups have signaled that they plan to challenge this newly imposed tariff in federal court, which could affect how long the measure remains in place.
Furthermore, one of the most significant impacts not addressed in the Supreme Court ruling was how importers would be refunded the approximately $175 billion already collected in import taxes. This process depends on whether an entry is still open or has recently closed. Entries that have not yet been liquidated will be processed without the IEEPA duties, and entries that were liquidated within the 180-day protest period will be reopened and adjusted accordingly. These steps help ensure that all importers are treated consistently under the Court’s ruling.
Nearly 1,000 claims have been filed for preemptive compensation from the Court of International Trade (CIT) with many more anticipated to follow. Some involvement is likely by Customs and Border Protection (CBP), the federal agency responsible for collecting tariffs. But the anticipated timeline for refunds is also unclear given the lack of a current procedure, with some speculating the process could take as long as 12 to 18 months.
That uncertainty shifted with a significant development on March 4, 2026, when the CIT issued an order for CBP to begin liquidating or reliquidating entries without the IEEPA-based duties, directly implementing the Supreme Court’s February 20th ruling and ensuring uniform treatment for all importers. Judge Richard Eaton emphasized that CBP must refund any unlawfully collected duties, regardless of whether an importer has filed a claim, so long as the entry has not yet reached final liquidation. The Justice Department is expected to appeal the order and may request a stay, which could temporarily pause refund activity. Until a higher court acts, however, the CIT’s directive remains active.
CBP acknowledged that the scale of required refunds, estimated to be between $168 and $182 billion across more than 330,000 importers, will require new systems. CBP requested approximately 45 days to develop a refund mechanism. Because the agency shifted to electronic-only duty refunds in February 2026, importers must ensure their ACE portal and ACH refund information is current to avoid refund delays.
Separately, Congress has proposed new compliance measures. While not yet law, the SAFE Act, would impose new importer-of-record requirements, including a physical U.S. address and bank account, that could reshape reporting obligations for foreign-based entities if enacted.
At the broader economic level, the outlook remains unsettled. While the Supreme Court ruling may suggest an easing of inflationary pressures, a greater likelihood is ongoing uncertainty for consumers and businesses. Especially given the President’s vow to utilize other procedural means to re-assert tariffs.
With that, the Administration may consider pursuing tariffs under Section 232 of the Trade Expansion Act of 1962, which permits duties tied to national security concerns. They also may impose tariffs under Section 301 of the 1974 Trade Act, which addresses unfair foreign trade practices. Both processes require formal investigation and reporting, which means any additional tariffs under these authorities would take time to implement.
Given the current scenario, Windham Brannon recommends businesses that have exposure to trade practices review tariff duties paid specifically under IEEPA authority, as compared to tariffs processed under other statutes. Importers should also review the liquidation status of every affected entry and consider filing protective protests for any entries that are nearing the end of the 180-day protest window. Although the legal issues surrounding the IEEPA duties have been resolved, preserving protest rights helps ensure that refund eligibility is fully maintained.
The Court of International Trade only provides for a two-year statute of limitations for refund claims, which suggests affected businesses should evaluate potential claims as soon as possible. Importers may also want to confirm whether any entries are approaching the end of the 180-day protest period, since filing a protective protest can help keep refund options open while CBP works through its backlog.
Businesses should also anticipate continued volatility that may reintroduce inflationary pressure and contribute to supply chain disruption. Rapid shifts in tariff policy can make it difficult to plan strategically, manage inventory and avoid short-notice price spikes for raw materials and key inputs. Some of these cost increases may flow through to consumer prices, depending on product and sourcing flexibility. As a practical step, companies should refresh landed-cost and pricing assumptions, review contract terms for tariff pass-through and adjustment provisions and evaluate sourcing and inventory strategies to reduce exposure to sudden changes in duty rates.
Finally, we emphasize the importance of staying current with the ongoing turbulence facing current trade practices and tariff authority sought by the President. Given the current situation, Windham Brannon recognizes a high degree of uncertainty facing our clients. We will, however, continue to make our best recommendations and keep you current with legal or trade developments that may impact your business success.
Contact Nicole Suk or your Windham Brannon advisor today to discuss your exposure and recommended next steps.
