The IEEPA tariffs are dead — Now what?

Key insights:

• • • The Supreme Court decisively limited presidential tariff power under IEEPA—The decision held that the statute’s authority to “regulate importation” does not include the power to impose tariffs, especially absent clear congressional authorization for actions of major economic significance.

    • The ruling creates major uncertainty around refunds of already‑paid IEEPA tariffs— There is more than $175 billion potentially at stake and no clear, orderly mechanism yet for determining who is entitled to refunds or how they will be administered.

    • Tariffs are not ending but shifting to slower, more constrained legal authorities — As the administration pivots to statutes like Sections 232 and 301 that impose procedural hurdles and limits, it is likely to result in continued trade volatility rather than relief for businesses.

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In a 6–3 ruling handed down today in Learning Resources, Inc. v. Trump, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize President Donald Trump to impose tariffs. For businesses that have spent the past year navigating a dizzying storm of rate changes, exemptions, and modifications — sometimes shifting within days of each other — the ruling offers a measure of vindication.

However, don’t exhale just yet. The decision is likely to produce more confusion and instability in the near term, not less. The IEEPA tariffs may be legally dead, but the trade policy fight is very much alive, the refund process is an open question, and the administration is already pivoting to Plan B. For businesses trying to plan around a coherent trade regime, the ground has shifted again — it just shifted in a different direction.

Shortly after the announcement of the Supreme Court’s ruling, President Trump announced that his is planning to invoke new trade authorities and potentially levy new, across-the-board tariff on US trading partners. As of press time, the White House declined further comment but had tentatively scheduled a news conference for later Friday afternoon.

Here’s what happened, what it means, and what comes next.

The Court’s ruling

Chief Justice John Roberts, writing for the majority, framed the case around a simple but consequential question: Can two words — regulate and importation, separated by 16 other words in IEEPA’s text — support President Trump’s claim to his ability to impose tariffs of unlimited amount, duration, and scope on imports from any country?

The answer, from the Court’s majority is No.

The Court’s reasoning proceeded along two tracks. First, three justices — Chief Justice Roberts, and Justices Neil Gorsuch and Amy Coney Barrett — invoked the major questions doctrine, the principle being that executive actions of vast economic and political significance require clear congressional authorization. They found none in the IEEPA. As Roberts wrote, the President must “point to clear congressional authorization” to justify his assertion of tariff power. “He cannot.”

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If the past year has taught businesses anything about trade policy, it’s that certainty is now a luxury item.

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Second, and commanding a full six-justice majority, the Court worked through IEEPA’s text and concluded that the word regulate simply does not encompass the power to tax. The U.S. Code is full of statutes authorizing agencies to regulate various things, but the government, in its arguments before the Court, could not identify a single one in which that power has been understood to include taxation. In one of the opinion’s sharpest lines, the majority expressed skepticism “that in IEEPA — and IEEPA alone — Congress hid a delegation of its birth-right power to tax within the quotidian power to ‘regulate.'”

What the ruling does not say

Here is where businesses may need to pay close attention: The Court said nothing about refunds of tariffs already paid.

Justice Brett Kavanaugh, writing in dissent, flagged the looming chaos directly. “The Court’s decision is likely to generate other serious practical consequences in the near term,” Justice Kavanaugh wrote. “Refunds of billions of dollars would have significant consequences for the U.S. Treasury… . [T]hat process is likely to be a ‘mess’… . Because IEEPA tariffs have helped facilitate trade deals worth trillions of dollars… the Court’s decision could generate uncertainty regarding various trade agreements.”

That mess is now a real, operational problem. There is more than $175 billion in IEEPA tariff collections at risk, according to a Penn-Wharton Budget Model estimate released today. Nearly 1,000 companies had already filed preemptive refund claims with the Court of International Trade (CIT) before today’s ruling. Indeed, the CIT has indicated it has jurisdiction to order reliquidation and refunds, and the government has stipulated it won’t challenge that authority.

However, the mechanics — who gets paid back, how much, and when — remain deeply uncertain. Some importers passed tariff costs downstream to their customers or absorbed them into pricing adjustments that can’t easily be unwound. For many businesses, the refund question will be less a windfall than a logistical headache.

What the Administration might do next

Make no mistake, the White House took a significant blow today. The IEEPA was the administration’s most flexible and powerful tariff instrument and the tool that let the President impose duties instantaneously, on any trading partner, at any rate, with no procedural prerequisites. That tool is now gone.

However, as mentioned, the administration signaled immediately that it intends an end-around in order to keep as many tariffs in place as possible. Treasury Secretary Scott Bessent and other officials said the United States would invoke alternative legal authorities, including Section 232 of the Trade Expansion Act (national security tariffs), Section 301 of the Trade Act of 1974 (unfair trade practices), and other statutory provisions. None of these alternatives offer the speed and blunt-force flexibility that the IEEPA provided, however, and they may not replicate the full scope of the current tariff regime in a timely fashion.

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Shortly after the announcement of the Supreme Court’s ruling, President Trump announced that his is planning to invoke new trade authorities and potentially levy new, across-the-board tariff on US trading partners.

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Justice Kavanaugh’s dissent, notably, conceded the point while framing it sympathetically: “In essence, the Court today concludes that the President checked the wrong statutory box by relying on IEEPA rather than another statute to impose these tariffs.”

That framing understates the practical significance. The alternative statutes each come with procedural requirements — agency investigations, public hearings, durational limits, rate caps — that IEEPA’s emergency framework did not impose. Section 122, for instance, caps tariffs at 15% for 150 days. Section 232 requires an investigation and report from the U.S. a Commerce Department. Section 301 demands a formal determination by the U.S. Trade Representative. These are not insurmountable hurdles of course, but they are hurdles and they will take time.

What businesses should do now

If the past year has taught businesses anything about trade policy, it’s that certainty is now a luxury item. Today’s ruling doesn’t change that; rather, it just changes the axis of uncertainty. Here’s what any organization impacted by trade should be thinking about:

• • Review your tariff exposure immediately — Understand which of your import duties were collected under IEEPA authority compared to the other statutes (Sections 232, 301, 201). Only IEEPA tariffs are affected by today’s Court ruling. Section 232 tariffs on steel, aluminum, autos, and other goods remain fully in place, as do Section 301 tariffs on Chinese imports. For many importers, a significant portion of their tariff burden will not change. For others, it may change everything.
  • Engage trade counsel on refund claims — If you’ve paid IEEPA duties, the clock is ticking. The CIT has a two-year statute of limitations on refund claims, running from the date the tariffs were published. For the earliest IEEPA tariffs (the fentanyl-related duties on Canada, Mexico, and China from February 2025, for example), that window is already narrowing. If you haven’t filed a protective claim yet, consult with counsel now.
  • Prepare for replacement tariffs — The administration has made clear it intends to reimpose tariffs under alternative authorities. Thus, the effective tariff rate is not going to 0%. Even without IEEPA tariffs, estimates suggest the average rate would settle around 9%, still far above the roughly 2% that prevailed before the beginning of President Trump’s second term. Businesses should map out scenarios to plan for a period in which IEEPA tariffs are lifted but gradually replaced by duties under other statutes, potentially with different rates, different product coverage, and different country-specific treatment.
  • Monitor trade deal stability — Many of the bilateral and multilateral trade agreements negotiated over the past year — with the United Kingdome, the European Union, Japan, South Korea, and others — were structured around tariff levels built greatly upon the IEEPA. The legal basis for those arrangements is now uncertain. Watch for renegotiations, modifications, or lapses in these existing frameworks.
  • Build flexibility into supply chain planning — This is the hardest and most important advice. The trade policy environment is not returning to a stable equilibrium anytime soon. Today’s ruling is the end of one chapter, but the broader story — of a political system wrestling with how much tariff authority the President should have — is far from over. The administration will test the boundaries of its remaining statutory tools. And the courts will almost certainly be called upon again.

Taking in the bigger picture

For businesses, the practical takeaway from today’s Court order is more pedestrian but no less important: Strap in. The tariff landscape is shifting again, the refund process will be complicated, and the administration will find another way to pursue its trade objectives. Today brought clarity on the law, but clarity on the market is still a long way off.

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For more on the impact of tariffs, you can download a full copy of the Thomson Reuters Institute’s recent 2025 Tariffs Report here