This article published in the Association of Corporate Counsel's South Carolina newsletter. 

After the U.S. Supreme Court’s holding that tariffs imposed under the International Emergency Economic Powers Act are unlawful, the Court of Appeals for the Federal Circuit and the Court of International Trade (CIT) have moved quickly to halt the collection of IEEPA tariffs on imported entries and directed Customs and Border Protection (CBP) to begin processing refunds paid on millions of import entries. After the Supreme Court’s February 20, 2026 decision in Learning Resources Inc. v. Trump, the Federal Circuit quickly issued a mandate lifting its August 29, 2025 stay on IEEPA tariff litigation and returning the pending cases to the CIT. While the Supreme Court’s decision unequivocally holds that IEEPA tariffs are unlawful, uncertainty remains regarding how and when tariffs will be refunded on liquidated and reliquidated entries. 

The Legal Backdrop to the Refund Process

President Trump’s Tariff Declarations Under IEEPA

The International Emergency Economic Powers Act (IEEPA) grants the acting president broad authority to regulate certain economic transactions during declared national emergencies. However, it does not specifically refer to or authorize tariffs as a tool at the president’s disposal, and no president has ever tried to use IEEPA to impose tariffs.

In early 2025, the Trump administration first invoked the IEEPA to impose wide‑ranging tariffs on imports from numerous trading partners, including so‑called “reciprocal” tariffs and tariffs tied to immigration and fentanyl‑related concerns. These measures had immediate and substantial effects on U.S. importers across industries. The legality of the tariffs was challenged swiftly, including through a number of cases filed in CIT seeking declaratory and injunctive relief from the IEEPA tariffs by large companies.

The Supreme Court Strikes Down IEEPA Tariffs in Learning Resources Inc. v. Trump

On February 20, 2026, the U.S. Supreme Court issued a decision holding that the IEEPA does not grant the president authority to impose tariffs. In practical terms, the court concluded that the tariffs imposed under IEEPA were not authorized by Congress and therefore cannot stand. This decision has immediate relevance for importers that paid IEEPA tariffs and for businesses planning for future trade compliance.

In plain language, the court said that tariffs are taxes, and under the Constitution, only Congress has the power to impose taxes unless it clearly hands that power to the president. While IEEPA allows the president to take many actions during a declared national emergency — such as blocking or restricting certain transactions — it does not specifically mention tariffs or duties. The court was unwilling to read that power into the statute, especially given the size and economic impact of the tariffs at issue. Many consider the ruling to be a major setback for President Donald Trump’s use of emergency powers to reshape trade policy and as a reaffirmation that Congress, not the president, controls tariff policy.

The Supreme Court’s ruling resolves the core legal question that the tariffs were improperly imposed, but it leaves important practical questions unanswered. Most notably, the court did not order the government to automatically refund tariffs that have already been paid. Instead, the decision focuses narrowly on authority: because IEEPA never authorized tariffs in the first place, those tariffs were unlawful. What happens next, particularly with respect to reimbursement, will depend on how existing customs processes and follow-on litigation play out.

The Federal Circuit Lifts the Stay on Its Mandate to Begin Refunds

On March 2, 2026, the Federal Circuit issued a per curiam order that will allow the CIT to begin the process of determining refunds for importers subject to tariffs the U.S. Supreme Court recently found unconstitutional.

The Federal Circuit previously ruled in V.O.S. Selections Inc. v. Trump on August 29, 2025, that the IEEPA tariffs were unconstitutional but issued a temporary stay of its mandate to the CIT pending Supreme Court review of Learning Resources. As a practical matter, that meant the CIT could not begin the process of determining the remedial rights of importers for the IEEPA tariffs already paid or address any process for considering or processing refunds.

In the Supreme Court’s February 20, 2026, decision, the justices affirmed the Federal Circuit's holding that IEEPA does not authorize the imposition of tariffs, finally settling the core legal issue. In light of that ruling, V.O.S. Selections Inc. filed a motion on February 24, 2026, requesting that the Federal Circuit lift the stay and instruct the CIT to follow its previously issued mandate on the IEEPA tariff process. The Federal Circuit's March 2, 2026, order made clear that, upon remand, the CIT must still decide the appropriate extent of relief to which importers are entitled, as well as the refund mechanics and timing requirements for tariff refund assessments and the payment of the refunds, issues that the Supreme Court did not address. In addition, the CIT and CBP must determine how to handle both automatic tariff refunds and refunds sought through individual claims filed in the CIT seeking refunds based on a company’s specific circumstances.

The CIT Orders Immediate IEEPA Refunds, But Allows CBP to Prepare

On March 4, 2026, CIT Judge Richard K. Eaton ordered CBP to liquidate all unliquidated entries and reliquidate any liquidated entries that are not yet final, effectively requiring refunds to every importer whose entries were assessed IEEPA tariffs. The order was issued in the case of Atmus Filtration Inc. v. United States, a case that was filed after the Learning Resources decision, seeking a preliminary injunction preventing further collection of IEEPA tariffs by CBP from any importer, and an immediate refund of the tariffs paid.

The government responded to the March 4 order arguing that immediate compliance was not possible. In a March 6 declaration, CBP detailed the unprecedented scale of the task: it would require refunds paid by more than 330,000 importers, affecting 53 million entries, resulting in the return of roughly $166 billion. CBP argued that its Automated Commercial Environment (ACE) system cannot readily identify IEEPA-duty entries or halt weekly liquidations without risking errors in other trade remedies. CBP proposed that the government develop new functionality within the ACE system to process IEEPA duty refunds in a more efficient manner. CBP is “making all possible efforts” to have the new functionality ready for use in 45 days.

Judge Eaton’s March 6 order suspends the prior directive but only “to the extent that it directs immediate compliance,” expressly leaving the underlying refund obligation in place. The court set no firm deadline, effectively granting CBP limited breathing room to develop an automated refund process while preserving importers’ entitlement to relief.

Other Tariffs Are Not Off the Table

It is important to note that the Supreme Court’s opinion leaves questions open regarding future tariffs available outside of the IEEPA. The court did not say that all tariffs are unlawful or that the president has no tariff power whatsoever. It held only that IEEPA is not the right statute for that purpose. Before the decision, members of President Trump’s team suggested that replacement tariffs could be imposed under other trade laws and several statutes, including Sections 122 and 301 of the Trade Act of 1974, authorize the president to impose tariffs based on improper or un-competitive acts of foreign countries.

The administration has already launched two parallel Section 301 investigation tracks on an accelerated timeline. The first, announced March 11, 2026, targets “structural excess capacity and production in manufacturing sectors” across sixteen economies — advancing a theory of harm grounded in overproduction that harms the competitiveness of U.S. manufacturers. The second track, announced March 12, 2026, is broader still, initiating investigations of sixty economies focused on alleged failures to prohibit and effectively enforce bans on goods produced with forced labor, investigations that may in large part duplicate existing forced‑labor enforcement regimes in the name of bolstering the president’s ability to impose tariffs under alternative means.

What This Means for Importers

Refunds Are Coming — But Not Yet

The courts have now resolved the central legality question: IEEPA tariffs were unlawful. Although CBP stated in its declaration that it “is making all possible efforts” to develop new functionality in the existing ACE system that will be ready for use in 45 days, the judge did not order CBP to have a working refund process by any specific date. Thus, there remains significant uncertainty around the speed at which CBP will assess refund claims and how long it will take to issue refunds and for importers to receive the funds.   Importers should expect additional litigation, administrative development, and court oversight before refunds are actually issued.

Practical Next Steps

In light of the uncertainty surrounding the refund process, companies that paid IEEPA tariffs should begin preparing now so they are positioned to act as the administration and the courts clarify how refunds will be assessed, validated, and issued. Affected companies and their importers of record should consider taking the following preparatory steps:

• Identify eligible imports by gathering records for imported goods that were subject to IEEPA tariffs, including records of the date, cost, and country of origin of entries, proof of the initial estimated duty payments, and any correspondence received from CBP.
   
• Assess liquidation status of entries to confirm which entries remain open and which have been liquidated but are still protestable. While the CIT has ordered reliquidation of imports as necessary, filing a protest where available may be considered by the court when prioritizing the processing and refund of IEEPA tariffs.
   
• Consider whether pursuing individual litigation in the CIT in order to preserve any rights to tariff refunds is appropriate in light of business, reputational, and financial needs and risks.
   
• Safeguard access to CBP’s ACE and other electronic systems to maintain access to any refund or reliquidation process, which is likely to be administered electronically.
   
• Plan for delays and uncertainty, including potential processing backlogs, new guidance on import processes and tariff payments, and phased implementation of any refund mechanism.
   
• Evaluate the need to obtain legal counsel knowledgeable in tariff regulation and enforcement in order to understand the administrative and judicial developments over what will likely be a years-long process.
   
• Account for potential alternative tariffs resulting from Section 122 temporary global surcharge duties or Section 301 investigations of foreign countries, as these may counterbalance any IEEPA tariff refunds ultimately obtained.

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