Overview of Imposition of IEEPA Tariffs
Beginning in early 2025, President Trump used the International Emergency Economic Powers Act ("IEEPA") to impose new duties on imports, and the United States Supreme Court's 2026 decision (discussed further below) addressed tariffs justified principally by two emergency rationales: drug trafficking and trade deficits. The first emergency related to illegal drug trafficking from Canada, Mexico, and China and resulted in a twenty five percent (25%) duty on most Canadian and Mexican imports and a ten percent (10%) duty on most Chinese imports. The second emergency addressed what the administration described as "large and persistent" trade deficits harming United States manufacturing and supply chains, leading to duties of at least ten percent (10%) on all imports from all trading partners, with higher rates for dozens of countries and frequent changes. These tariffs significantly increased the cost of imported goods for United States importers and created pressure on foreign exporters, as United States customers often sought price reductions or shifted their sourcing in response to the new duties and ongoing uncertainty.
The SCOTUS Decision Invalidating IEEPA Tariffs
On February 20, 2026, the Supreme Court issued its decision in Learning Resources, Inc. v. Trump, together with Trump v. V.O.S. Selections, Inc., in consolidated cases challenging the President's authority to impose broad tariffs under the IEEPA. The challengers argued that IEEPA does not authorize tariffs and that the President exceeded statutory and constitutional limits, while the government argued that IEEPA's authority to regulate importation during a national emergency was broad enough to include tariffs in response to drug trafficking and trade deficits. The Supreme Court held that IEEPA does not authorize the President to impose tariffs, emphasizing that the power to tax and set tariffs belongs to Congress and that the statute does not clearly delegate that authority to the Executive Branch.
For businesses seeking refunds of duties paid under the IEEPA, the Supreme Court decision establishes that those duties were not legally authorized, but it did not specify a refund process. Within hours of the decision, President Trump issued Executive Order 14389 entitled "Ending Certain Tariff Actions" ending only the additional ad valorem duties imposed under the IEEPA while leaving other emergency measures and other duties in place. United States Customs and Border Protection ("CBP") implemented that directive through its Cargo Systems Messaging Service guidance, Message No. 67834313, stating that the IEEPA duties will no longer be collected for goods entered for consumption or withdrawn from warehouse for consumption on or after 12:00 a.m. Eastern Time on February 24, 2026.
How to Determine Claim Eligibility
Guidance on implementation and refund mechanics is still evolving. To assess potential refund eligibility for duties paid under the IEEPA tariff actions, businesses should: (1) confirm the duties were imposed under IEEPA (and not, for example, under Section 232 of the Trade Expansion Act of 1962 or Section 301 of the Trade Act of 1974); (2) identify the importer of record (or other party legally entitled to claim a refund); (3) confirm the entries fall within the period in which IEEPA duties were assessed, noting that CBP has advised that IEEPA duties covered by Executive Order 14389 are no longer collected for goods entered for consumption (or withdrawn from warehouse for consumption) at or after 12:00 a.m. ET on February 24, 2026 (including duties imposed under the February 1, 2025 border or fentanyl actions and the April 2, 2025 reciprocal action, among others); and (4) categorize each entry by liquidation status, because procedures and available remedies may differ for unliquidated entries, liquidated entries that are not final, and finally liquidated entries. Timely action remains important because statutory protest and related deadlines may affect recovery, and entries that are finally liquidated may require different procedural avenues or may be time-barred depending on the circumstances.
One noteworthy United States Court of International Trade ("CIT") order illustrates how relief may be implemented for certain entries. In Atmus Filtration, Inc. v. United States (Court No. 26 01259) (CIT Mar. 4, 2026), the CIT stated that all importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision and directed CBP to liquidate unliquidated entries, and to reliquidate liquidated entries where liquidation is not final, without regard to the IEEPA duties. The CIT did not address liquidated entries that have become final. Note that further proceedings may affect implementation.
Recommended Next Steps for Entities Affected by IEEPA Tariffs:
- Gather entry documentation and broker reports to identify IEEPA duty lines and confirm entry dates.
- Track the liquidation status of each entry and segment claims accordingly.
- Calendar all relevant deadlines and consider filing protests or other preservation actions for liquidated entries.
- Do not assume refunds will be automatic; monitor for CBP or court guidance and consider administrative or judicial action as needed.
- Consult counsel for a fact-specific review to ensure proper claim ownership, documentation, and procedural compliance.
Refund rules are still taking shape. Because eligibility may depend on who the importer of record is, which products were entered, and whether entries are unliquidated, not finally liquidated, or final, companies should act quickly to gather entry data and have counsel evaluate preservation steps and the most efficient path for recovery.
