On February 20, 2026, the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not give the President authority to impose tariffs.
The ruling deemed unlawful every IEEPA-based tariff imposed between February 2025 and February 2026. For U.S. importers, that's roughly 12 months of duty payments collected under authority the Court has now said never existed in the first place.
A refund window is open. But recovering that money requires an active filing. The government does not issue IEEPA refunds automatically.
Here's what the Court decided, what the ruling actually does, and what importers should be doing about it right now.
Learning Resources is an Illinois-based educational products company. Like thousands of other importers, it paid IEEPA duties on goods brought into the U.S. during 2025. The company challenged the executive branch's use of IEEPA as the legal basis for those tariffs.
The legal question was narrow: Does IEEPA, a 1977 national security statute, authorize the President to impose tariffs? The statute lets the President "regulate…importation or exportation" after declaring a national emergency. Learning Resources argued that "regulate" does not include the power to impose taxes, which is what a tariff is.
The Court agreed.
The companion case, Trump v. V.O.S. Selections, was a parallel challenge brought by a wine importer facing the same IEEPA tariffs. It was resolved on the same day, on the same reasoning.
The Court held that IEEPA does not authorize the President to impose tariffs. Three pieces of the reasoning matter.
First, IEEPA contains no reference to tariffs or duties. The statute lists specific powers: regulating transactions, freezing assets, and blocking trade. Tariffs are not among them. The Court held that Congress does not hide major taxation authorities inside vague statutory language.
Second, "regulate" does not mean "tax." Chief Justice Roberts, writing for the majority, noted that Congress has never used the word "regulate" in the context of authorizing taxation. The power to tax has historically required an explicit statutory grant.
Third, no prior administration had read IEEPA as a tariff statute. In the statute's nearly 50-year history, every prior President has used IEEPA to impose sanctions, asset freezes, and trade embargoes. Nobody used it to impose tariffs. The 2025 interpretation was the outlier.
The ruling was 6-3. Chief Justice Roberts wrote the majority opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. Justice Kavanaugh wrote the principal dissent, joined by Justices Thomas and Alito, arguing that the President did have authority under IEEPA.
The split matters less than the outcome. A majority of the Court held that IEEPA is not a tariff statute. That holding is now the law.
It invalidates every IEEPA-based tariff. The reciprocal tariff regime, the fentanyl-related tariffs on Canada, Mexico, and China, and every other tariff imposed under IEEPA authority between February 2025 and February 2026 were all invalidated.
It ends the IEEPA tariffs going forward. All IEEPA-based tariffs terminated at 12:00 AM Eastern on February 24, 2026. President Trump signed an executive order ending IEEPA tariffs on February 20, and CBP confirmed the specific end time in guidance issued February 22.
It opens a refund pathway. Because IEEPA tariffs were unlawful, duties collected under that authority were never properly owed. Importers who paid them now have the legal basis to pursue refunds.
It narrows executive tariff authority going forward. The Court's reasoning, that taxation power requires an explicit statutory grant, signals that future administrations will face harder legal ground for using emergency powers as a tariff tool.
This is where most businesses form the wrong expectations.
Refunds are not automatic. The Court ruled that IEEPA tariffs were unlawful. It did not order CBP to cut checks. Every refund requires an active filing by the importer, either through CBP's CAPE system or through a formal protest.
Section 301 tariffs are unaffected. Section 301 of the Trade Act of 1974 is a separate statutory authority administered by the USTR. The Court's ruling was specific to IEEPA. Section 301 tariffs, including the tariffs on Chinese-origin goods, remain in force. For how to tell the two apart on your entries, see IEEPA vs. Section 301 Tariffs: What's the Difference?.
Section 232 tariffs on steel and aluminum also remain in force under separate authority.
Base MFN duties are not affected. Standard most-favored-nation duties on imports remain in force.
The ruling also does not answer the refund mechanics. The Court ruled on authority, not process. The question of how refunds would actually flow, which entries, in what order, through what system, was left to CBP and the Court of International Trade to work out.
After the ruling, CBP built a new system called CAPE (Consolidated Administration and Processing of Entries) inside the existing ACE Portal. CAPE Phase 1 launched April 20, 2026.
CAPE is the primary pathway for most IEEPA refunds. It's designed to process large volumes of claims efficiently by consolidating entries at the importer level instead of requiring a separate filing for each shipment.
CAPE Phase 1 does not cover every entry. It covers unliquidated entries and entries liquidated within the preceding 80 days, a filing window CBP set to allow enough time to meet the 90-day legal deadline for voluntary reliquidation under 19 U.S.C. § 1501. Entries outside that window require a different pathway.
For a full breakdown of how the deadlines work and when each pathway applies, see IEEPA Tariff Refund Deadline: What Importers Need to Know.
Whether the ruling matters to you depends on what you imported and when.
You likely have a refund opportunity if:
The ruling is less relevant to you if:
For most importers with meaningful import activity in 2025, there's at least a partial refund opportunity. The exact number depends on volume, rates paid, and how many of your entries are still within active windows.
The worst outcome here isn't a complicated filing. It's a silent forfeiture, entries aging past their deadlines while the refund question stays off the radar.
Start with four questions.
1. Was your business the importer of record?
Only the IOR has standing to file. If you worked through a distributor, a DDP contract, or a broker arrangement, this question is less obvious than it sounds. For how to check, see How to Determine Importer of Record for IEEPA Tariff Refunds.
2. What's your refund worth?
Total IEEPA duties paid across all eligible entries, plus statutory interest accruing from the date of payment. Importers consistently underestimate this number. For how the calculation works, see How Is Your Tariff Refund Amount Calculated?.
3. Which pathway applies to each entry?
CAPE for entries within the Phase 1 scope. Formal protests for entries outside it. For how protests work, see Guide to CBP Protests for IEEPA Tariff Refunds.
4. Are you being pitched by a legitimate firm or a scammer?
The refund opportunity has attracted predatory outreach. For how to tell the difference, see How to Spot a Tariff Refund Scam.
What did the Supreme Court actually decide?
The Court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. Every IEEPA-based tariff imposed between February 4, 2025 and February 24, 2026 was invalidated.
Do I automatically get a refund?
No. The ruling created the legal basis for refunds but did not order automatic payment. Importers must file through CBP's CAPE system, through a formal protest, or in some cases through litigation at the Court of International Trade. The government does not issue IEEPA refunds without an active filing from the importer of record.
Does the ruling affect Section 301 or Section 232 tariffs?
No. Those tariffs rest on separate statutory authority and remain in force. Section 301 tariffs on Chinese-origin goods and Section 232 tariffs on steel and aluminum are unaffected.
When did IEEPA tariffs actually end?
All IEEPA-based tariffs ended at 12:00 AM Eastern on February 24, 2026. President Trump signed an executive order terminating them on February 20, the same day as the ruling. CBP confirmed the specific end date and time in guidance issued February 22.
How much money is involved?
Economic analyses estimate IEEPA duty collections at roughly $175 billion across the period the tariffs were in force, based on projections through February 2026. CBP's own court filings identified more than 330,000 importers across approximately 53 million entries.
Could the ruling be reversed?
Supreme Court rulings of this type, interpretations of federal statutes, are stable. A future Court could reach a different conclusion on a different case, but the holding in Learning Resources binds lower courts and CBP. CBP's court-ordered refund process is already underway, and that process treats the ruling as settled.
What if Congress passes a new tariff law?
Congress could enact tariff legislation that explicitly grants the authority the Court found lacking in IEEPA. That would affect future tariffs, not the refunds owed on duties already collected under the invalidated IEEPA framework.
How long do I have to file a refund claim?
It depends on the entry. CAPE Phase 1 covers unliquidated entries and entries within 80 days of liquidation. Entries outside that window fall under the 180-day protest deadline under 19 U.S.C. § 1514. Every entry has its own clock. For finally liquidated entries past the protest deadline, litigation at the Court of International Trade remains available, with a two-year statute of limitations running from the tariff publication dates.
For a detailed breakdown, see IEEPA Tariff Refund Deadline: What Importers Need to Know.
Learning Resources v. Trump is a real case with real money at stake. For importers who paid IEEPA duties during 2025 and early 2026, it's a time-sensitive financial opportunity.
The businesses that get the most out of it aren't the ones who understand it best. They're the ones who act before their entry-specific windows close.
Ayar Law reviews your actual import records, identifies every refund pathway still available, and handles the filings on your behalf. No upfront fees. We're paid only when you are.
Call us directly: (248) 262-3400
