US Supreme Court holds IEEPA does not authorize tariffs: Key takeaways

On February 20, 2026, the United States Supreme Court ruled in Learning Resources, Inc. v. Trump (consolidated with Trump v. V.O.S. Selections, Inc. (No. 25-250)) that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The ruling invalidated 1) “drug trafficking” tariffs imposed on goods from Mexico, Canada, and China and 2) “reciprocal tariffs” imposed on goods from jurisdictions worldwide.

Below, we provide a summary of the Supreme Court’s decision, followed by a Q&A section addressing key topics, including refunds, tariff treatment of future imports, and the potential for replacement tariffs.

Summary of the Supreme Court’s opinion

In the opinion delivered by Chief Justice John G. Roberts, the Court emphasized that, under Article I, Section 8 of the Constitution, “Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” Noting that tariffs are taxes, the Supreme Court found that “the Framers did not vest any part of the taxing power in the Executive Branch,” and that the President has no inherent power to impose tariffs during peacetime.

The Court further held that, while Congress may delegate certain powers, the words “regulate...importation” in IEEPA are not a delegation of tariff authority. The majority noted that “regulate” is not ordinarily understood to include taxation, and it found no other instance in United States law where the legislative directive to “regulate” has been understood to include tariff authority.

The Court also reasoned that this reading would make IEEPA at least in part unconstitutional because it also delegates authority to “regulate...exportation,” and the Constitution prohibits taxation of exports. The majority found further support in historical practice, including that IEEPA has never previously been invoked to impose tariffs and that prior delegations of tariff powers from Congress have always been explicit and subject to strict limits not found in IEEPA. As a result, the Court concluded that IEEPA does not delegate tariff authority to the President.

Q&A

Below, we address commonly asked questions in response to the Supreme Court’s ruling.

Q1: If I paid IEEPA tariffs in the past, will I receive a refund?

A: Importers who paid IEEPA tariffs will likely be entitled to refunds. However, the Supreme Court’s decision does not address remedies, and so the mechanics for obtaining refunds remain uncertain.

To preserve potential refund rights, some businesses may wish to consider filing suit in the Court of International Trade (CIT). Notably, there is an unresolved question as to which parties are entitled to judicial relief following the Supreme Court’s decision, which has been remanded to the CIT for further proceedings. In addition, government counsel previously told the CIT that it would not oppose reliquidation of entries that have already been liquidated in cases before the court. It is unclear whether the government will take the same position for importers that are not litigants before the court.

Importers are encouraged to ensure they are enrolled to receive electronic refunds from the US Customs and Border Protection (CBP), given the recent announcement that CBP will no longer issue paper checks and will instead issue refunds electronically through Automated Clearing House, subject to limited exceptions.

Q2: Do I owe IEEPA tariffs on goods currently in transit or expected to be imported into the US soon?

A: No. Following the Supreme Court’s decision, importers do not owe IEEPA tariffs. President Donald Trump issued an Executive Order (EO) titled “Ending Certain Tariff Actions” on February 20, 2026, instructing officials to take the necessary steps to terminate the collection of IEEPA duties “as soon as practicable.” CBP issued a message to the trade indicating that it would end collection of the IEEPA tariffs effective February 24, 2026, at 12:00am ET.

Q3: What about other tariffs imposed under IEEPA, such as those on India and Brazil?

A: The cases before the Supreme Court only challenged the fentanyl or drug trafficking IEEPA tariffs imposed on China, Canada, and Mexico, as well as the reciprocal IEEPA tariffs announced in April 2025 that applied broadly to countries worldwide.

Additional tariffs were later imposed under IEEPA on India (related to its importation of Russian oil) and Brazil (due to threats to free speech, elections, and human rights). The Supreme Court’s reasoning – that IEEPA does not delegate tariff authority to the President –indicates that these additional IEEPA tariffs on Brazilian and Indian goods are likewise unlawful, could be subject to refund, and should not apply going forward.

The EO directing termination of duty collection applies to the additional IEEPA tariffs imposed on Brazil and India. However, refund mechanics may differ because these measures were not directly before the Supreme Court.

Q4: What about Section 232 tariffs and Section 301 tariffs?

A: The legal source of the tariffs owed is a key distinction as the Supreme Court’s ruling only applies to tariffs imposed under IEEPA. It does not apply to tariffs imposed under other authorities, a point emphasized in the EO and also in the February 20, 2026 Proclamation, titled “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems.”

Accordingly, the ruling and subsequent actions do not impact tariffs imposed under Section 232 of the Trade Expansion Act of 1962 (Section 232), which currently apply to automotive and automotive parts, timber and softwood lumber, certain furniture, steel (and certain derivative products), aluminum (and certain derivative products), and copper (and certain derivative products).

The ruling and subsequent actions also do not apply to tariffs imposed under Section 301 of the Trade Act of 1974 (Section 301), such as the broad-based tariffs initially imposed during the first Trump Administration on products of China.

Q5: Will these invalidated IEEPA tariffs be replaced by new tariffs?

A: President Trump’s Proclamation states that Section 122 of the Trade Act of 1974 (Section 122) will impose a 10-percent tariff on all imports (with some exceptions) for a period of 150 days, effective February 24, 2026 at 12:01am ET. President Trump also announced a 15-percent tariff increase via social media, but, to date, no legal instrument has been issued to legally raise the rate.

The Proclamation imposing the Section 122 tariffs exempts certain categories of products that were previously exempted from the IEEPA tariffs, including:

• Goods that qualify as originating under the United States–Mexico–Canada Agreement (USMCA)
• Goods currently subject to Section 232 tariffs, or that may become subject to such tariffs in the future
• Textiles and apparel that are entered duty-free as a good of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under the Dominican Republic–Central America Free Trade Agreement
• Certain critical minerals, metals used in currency and bullion, energy, and energy products
• Natural resources and fertilizers that cannot be produced in sufficient quantities in the US
• Certain agricultural products, including beef, tomatoes, and oranges
• Pharmaceuticals and pharmaceutical ingredients
• Certain electronic products
• Certain automotive products
• Certain aerospace products
• Informational materials, donations, and accompanied baggage

Also on February 20, 2026, the White House issued a Fact Sheet titled “Fact Sheet: President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payments Problems.” The Fact Sheet indicates that President Trump directed the Office of the United States Trade Representative to exercise its Section 301 authority to conduct investigations of unfair trade practices.

The President could also use Section 232 to impose additional tariffs. The Department of Commerce has already commenced Section 232 investigations on pharmaceuticals, commercial aircraft, robotics, unmanned aircraft systems, polysilicon, wind turbines, semiconductors, critical minerals, and electrical transformers, any of which could become the basis for additional tariffs. 

Q6: How does the ruling impact the bilateral deals that the US has made with various trading partners?

A: The opinion applies only to tariffs imposed under IEEPA. The bilateral deals (i.e., Agreements on Reciprocal Trade) that the US has reached with trading partners such as the European Union, Japan, and Korea address a broader set of issues, including tariffs imposed under other authorities such as Section 232. However, nothing in those agreements would preserve the application of IEEPA tariffs as a matter of US domestic law.

Whether the Supreme Court’s decision affects trading partners’ engagement with the US may vary. In addition, where the Trump Administration agreed to cap tariff rates for certain partners, it is unclear to what extent the US will consider itself obligated to honor those caps for new tariffs imposed in the wake of this decision.

Overall, the US government and trading partners may both prefer to honor the underlying intent of the agreements, though additional negotiations may be required to address specific implementation issues. In a press release on February 20, 2026, US Trade Representative Jamieson Greer stated, “Our partners have been responsive and engaged in good-faith negotiations and agreements despite the pending litigation, and we are confident that all trade agreements negotiated by President Trump will remain in effect.”

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