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In a landmark 6-3 decision delivered on February 20, 2026, the United States Supreme Court ruled that the President does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA).
The ruling in Learning Resources, Inc. v. Trump (consolidated with Trump v. V.O.S. Selections, Inc.) effectively invalidates the “drug trafficking” tariffs on goods from Mexico, Canada, and China, as well as the broad “reciprocal tariffs” applied globally since 2025.
Why the Court Ruled Against the Tariffs
Writing for the majority, Chief Justice John Roberts emphasized that the power to tax, which includes tariffs, rests exclusively with Congress under Article I, Section 8 of the Constitution.
Key takeaways from the opinion include:
- "Regulate" ≠ "Tax": The Court found that the statutory power to "regulate... importation" in IEEPA does not include the power to impose taxes or duties.
- Constitutional Limits: Interpreting IEEPA to allow tariffs would risk being unconstitutional, as the act also covers "exportation," and the Constitution strictly prohibits taxing exports.
- Historical Precedent: In its 50-year history, IEEPA has never been used to levy tariffs until now. Prior delegations of tariff power from Congress have always been explicit and strictly limited.
The Refund Opportunity: What You Need to Know
The ruling has opened the door for what could be the largest customs refund operation in modern history, with an estimated $170 billion in unlawfully collected duties at stake.
Am I entitled to a refund?
If you paid tariffs imposed under IEEPA, you are likely entitled to a refund. However, the Supreme Court did not outline the specific mechanics for recovery.
How do I secure my refund?
While the government previously indicated it would not oppose re-liquidation (recalculation) of duties in cases already before the Court of International Trade (CIT), it is unclear if this stance will apply to non-litigants.
Immediate Actions Recommended:
- File with the CIT: We strongly recommend filing a lawsuit with the Court of International Trade to preserve your rights, especially as the case is remanded for further proceedings.
- Enroll for Electronic Refunds: As of February 6, 2026, CBP has transitioned to electronic-only refunds. Ensure you are enrolled for Automated Clearing House (ACH) payments via the ACE Portal.
- Audit Your Entries: Monitor the "liquidation" status of your entries. Once an entry is liquidated, it becomes "final," making it significantly harder to recover funds without an active protest or court case.
Q&A: The Impact on Current and Future Trade
Do I still owe IEEPA tariffs on incoming goods?
No. Following the ruling, President Trump issued an Executive Order terminating IEEPA duty collection. CBP confirmed that collection of these tariffs ended at 12:00 AM on February 24, 2026.
What about Section 232 and Section 301 tariffs?
These remain unaffected. The ruling only applies to tariffs sourced from IEEPA. Tariffs on steel, aluminum, autos (Section 232), and the broad China-origin goods tariffs (Section 301) are still in force.
Are there replacement tariffs?
Yes. Within hours of the ruling, the administration issued a Proclamation under Section 122 of the Trade Act of 1974.
- Rate: A 15% temporary import surcharge (initially announced at 10%).
- Effective Date: February 24, 2026, at 12:01 AM.
- Duration: 150 days.
- Exemptions: Includes USMCA originating goods, CAFTA-DR textiles, certain critical minerals, pharmaceuticals, and items already subject to Section 232.