U.S. Supreme Court Issues International Emergency Economic Powers Act Tariff Decision; New Tariff Regime Takes Shape

On February 20, 2026, the U.S. Supreme Court ruled in a 6–3 decision in Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026), that the International Emergency Economic Powers Act (IEEPA) does not grant the President of the United States authority to impose tariffs.

The Supreme Court Decision

The majority opinion begins with a recitation of the exclusive constitutional authority that belongs to Congress — the “Power To lay and collect Taxes, Duties, Imposts and Excises.” The Court embraces the definition of a tariff as “a tax levied on imported goods and services” and underscores that the Constitution “does not vest any part of the taxing power in the Executive Branch.”

The Court’s holding, however, rests on narrow statutory grounds: “Our task today is to decide only whether the power to ‘regulate ... importation,’ as granted to the President in IEEPA, embraces the power to impose tariffs. It does not.” The portions of the Court’s opinion that invoke the major questions doctrine and would have required the President to identify “clear congressional authorization” for tariffing authority garnered only a plurality of support among the Justices.

Impact on Current Tariff Regimes and Trade Deals

The Court’s decision invalidated the imposition of all tariffs under IEEPA. This includes the specific IEEPA tariffs challenged in the cases before the Court — the tariffs imposed in response to the fentanyl crisis and the reciprocal tariff regime imposed on goods of almost all countries. The Court’s decision leaves no room for the continued imposition of IEEPA tariffs on goods from Brazil associated with the Brazilian election results. (The United States had already suspended IEEPA tariffs on goods from India effective February 7, 2026.)

The Court’s decision has no impact on existing tariffs imposed under Section 301 of the Trade Act of 1974, or the tariffs imposed under Section 232 of the Trade Expansion Act of 1962. These include the tariffs on steel, aluminum, copper, automobiles, auto parts, lumber and timber, medium- and heavy-duty trucks, and semiconductors. The decision also does not affect the ongoing Section 232 investigations into imports of pharmaceuticals and ingredients, commercial aircraft and engines, polysilicon, unmanned aircraft systems, wind turbines, personal protective equipment, medical consumables, medical equipment, robotics, and industrial machinery. The decision also does not affect the availability of duty-free treatment for low-value shipments; on February 20, the President issued a proclamation continuing the suspension of de minimis treatment for all countries.

The Court’s decision will not likely have any immediate impact on the trade agreements the administration has negotiated with other countries. The administration will expect U.S. trading partners to continue to honor commitments secured in trade deals negotiated to date.

Securing Tariff Refunds

The Court’s opinion and judgment create a refund opportunity for importers that paid IEEPA tariffs. The Court did not address how refunds should be effectuated. The administration will now have to decide how the refund process will work, and the President has signaled resistance. Nevertheless, President Donald Trump signed an executive order on February 20 directing the heads of the relevant executive branch agencies to cease collection of IEEPA tariffs.

Companies that have paid IEEPA tariffs have legal rights to seek refunds through the existing U.S. Customs and Border Protection (CBP) administrative processes. Companies should be securing official records of import activity from CBP and timely filing protests on liquidated entries. If CBP does not begin approving protests shortly, it may be necessary to obtain judicial review.

The benefits of initiating a new standalone court case (independent from the administrative process) may be diminished now that the Supreme Court has issued a decision, but importers should be considering all administrative and judicial avenues for relief until refunds are secured.

Importing companies that mitigated IEEPA tariff impact by passing along surcharges or price increases should anticipate demands from commercial customers looking to recover their contributions. Nonimporting companies that bore the cost of IEEPA tariffs should consider all available avenues of recoupment.

The New Tariff Regime

The administration will replace some or all of the IEEPA tariffs with tariffs imposed under other legal authorities that expressly authorize the imposition of tariffs. On February 20, the President issued a proclamation to impose new 10% global tariffs under Section 122 of the Trade Act of 1974 to address a balance-of-payments crisis, broadly subject to the same exemptions that previously applied under the reciprocal tariffs. The next day, he posted on social media that this rate would increase to 15%, but this has not yet been implemented. The President also promised to launch new investigations into unfair foreign trade practices under Section 301 of the Trade Act of 1974 and invoked the prospect of imposing tariffs under Section 338 of the Tariff Act of 1930.

Some of these legal authorities have been tested in court more than others, but all contain procedural prerequisites, substantive limitations, or both. The administration will likely try to implement these replacement tariffs swiftly to minimize any gap in revenue collection.