Supreme Court rejects IEEPA as a tariff statute
Date of publication: February 20, 2026
Summary
On February 20, 2026, the U.S. Supreme Court ruled on the Learning Resources, Inc., et al. v. Trump (consolidated with Trump v. V.O.S. Selections, Inc.) case. The court held that the
International Emergency Economic Powers Act (IEEPA)
does not authorize the President to impose tariffs
. The Court treated tariffs as part of Congress's Article I taxing power and found that IEEPA's authority to "regulate … importation" does not include imposing duties/tariffs.Tariffs at issue
The decision addressed two IEEPA-based tariff programs described in the opinion:
- Drug trafficking “Fentanyl” tariffs:
- Twenty-five percent on Canadian imports (subsequently raised to 35%)
- Twenty-five percent on Mexican imports
- 10-20% on Chinese imports (related to drug enforcement)
- Reciprocal "Liberation Day” trade deficit tariffs:
- Ten percent minimum baseline on all imports from all trading partners
- Up to 145% effective rate on Chinese goods
- Various country-specific rates covering dozens of countries ranging from 10-50%, and some commodity specific rates.
What the Court did procedurally
- The Court affirmed the Federal Circuit decision in the CIT case (V.O.S. Selections) on the merits (IEEPA does not authorize tariffs).
- It vacated the D.D.C. preliminary injunction decision in Learning Resources and remanded with instructions to dismiss for lack of authority, emphasizing that many tariff challenges belong in the Court of International Trade (CIT) under 28 U.S.C. §1581(i).
Practical takeaway:
For future tariff litigation, expect the CIT to remain the primary venue—district court paths are less likely to stick where claims "arise out of" tariff laws/administration.Key reasoning
- Text and structure:IEEPA lists many powers (investigate/block/regulate/prevent/prohibit, etc.) but never mentions "tariffs" or "duties."
- "Regulate" ≠ "tax":The Court found it implausible that Congress "hid" a tariff/tax delegation inside the word "regulate," particularly given Congress's pattern of using explicit tariff language ("duty," "surcharge," etc.) in other trade statutes.
- Constitutional context:Reading IEEPA to allow taxation would also create problems given the Constitution's export-tax prohibition (IEEPA also references "exportation").
Opinions to note
- Roberts (opinion of the Court as to key parts):Tariffs require clear congressional authorization; IEEPA does not provide it.
- Major questions analysis:Joined only byRoberts, Gorsuch, Barrettfor that portion; it reinforces "clear authorization" expectations for economically significant delegations.
- Kagan (joined by Sotomayor, Jackson):Same result via ordinary statutory interpretation—no need for major questions doctrine.
- Dissents (Kavanaugh; Thomas separately):Argued "regulate importation" historically includes tariffs and warned of operational disruption (e.g., refunds) and re-tooling under other tariff statutes.
What this ruling did not decide
- The Court didnotbless or reject the use ofothertariff authorities as substitutes (e.g., Section 301, 232, 122, 201 or 338).
- The decision doesnoteliminate IEEPA's broader sanctions toolkit (asset blocking, transaction prohibitions, etc.); it targetstariffs/dutiesspecifically.
- It does not order the Treasury/CBP to pay refunds by a certain date.
- It does not decide whether refunds are automatic versus claim based.
- It does not address downstream issues like who is entitled to refunds if importers passed costs to customers, interest, liquidation timing, or how ongoing entries are treated.
There is still a great deal of questions that remain and uncertainty is far from over. The largest of these is the status of tariff refunds for U.S. businesses, a topic the Court did not rule on in this case.
How the lower court (e.g., CIT) and CBP will manage (and whether they will issue) refunds on entries that have already been filed and, in some instances, liquidated, is yet unknown. Practically, refund handling would be left to (1) CBP’s entry/liquidation and protest procedures and/or (2) follow-on litigation in the proper forum (typically the CIT), unless Congress or the Executive sets a specific unwind process. The ruling itself does not prescribe that process.
There also will be questions around the effect of today's decision on the existing "deals" that the Administration struck with other countries. To date, the Administration has negotiated twenty-one “reciprocal trade agreements,” that all include tariff provisions that are tied to IEEPA tariffs. Countries struck investment and trade deals with the United States to avoid excessive IEEPA tariff rates. Whether this ruling will unwind or in some way impact those agreements is unknown.
Put more simply, there are still a lot of unanswered questions that need to be worked through.
What companies should do now (near-term)
- Identify exposure:Map imports and entries that paid IEEPA duties (by date, product, supplier country, and entry number).
- Preserve rights:Coordinate with customs counsel onprotests,liquidation status, and anyCIT strategywhere appropriate (timelines are fact-specific).
- Model commercial impacts:Review contract tariff clauses (price adjustment/change-in-law/incoterms) in case tariffs are removed, refunded, or reimposed under a different statute.
- Watch for "replacement" actions:The dissents themselves point to potential alternative statutes (e.g.,Section 232, Trade Act tools, Tariff Act provisions), which may change the procedural path but could recreate similar duty outcomes.
During a press briefing on February 20, 2026,
President Trump stated that he will be moving forward to implement Section 122 of the Trade Act of 1974, effective immediately to implement a 10% global tariff.
This would be in addition to any other existing tariffs in place. Section 122 allows for up to a 15% tariff to be applied for a maximum of 150 days, at which point it would need to be further extended by Congress. Additionally, the President stated that the Administration will pursue other legal avenues for tariffs such as Section 301 and Section 232 actions. Details were not yet available at time of this publication.
Conclusion
ONESOURCE Global Trade provides a comprehensive suite of tools designed to help companies effectively manage the complexities of the current tariff environment.
With these capabilities, ONESOURCE Global Trade equips companies to navigate ongoing changes, maintain compliance, and maximize refund opportunities during this period of uncertainty.
For more information on how ONESOURCE Global Trade solutions can assist you in managing supply chain risk, tariff challenges and regulatory compliance, contact your Account Manager or Client Success Manager.