The Supreme Court just handed businesses something rare: A real refund opportunity and a fresh dose of uncertainty, all at once.
Key takeaways:
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Companies should act fast on refunds — Companies that paid IEEPA-based duties have potential refund claims, but statutory deadlines are ticking. Business leaders should map exposure, quantify opportunities, and file protective claims now.
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Remember, other tariffs still apply — This decision only invalidated IEEPA-based tariffs. Tariffs based on Sections 232, 301, and 122 of the 1974 Trade Act remain in force, and the administration is already signaling plans for new global tariffs.
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Businesses should update their financial models — Tariff refunds flow through cost of goods sold, which affects taxable income and effective tax rates. Business leaders should review their transfer pricing models and contracts to determine which parties receive refund proceeds.
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The U.S. Supreme Court’s recent ruling striking down the tariffs that the Trump Administration based on the International Emergency Economic Powers Act (IEEPA) creates immediate refund opportunities for businesses that paid billions of dollars in now-invalidated duties. However, the administration’s pivot to alternative tariff authorities means the trade policy landscape is shifting rather than settling.
Now, corporate tax and trade leaders must move quickly to preserve refund claims while building resilient strategies for the next wave of tariff changes that are already fully in motion.
What actually happened
In Learning Resources, Inc. v. Trump, the Supreme Court said last month that President Donald J. Trump went too far by using the IEEPA — a statute designed for genuine national emergencies — to impose broad, peacetime tariffs. The Court’s message was blunt: If you want sweeping tariff authority, get the U.S. Congress to give it to you explicitly — IEEPA doesn’t cut it.
This ruling invalidated the tariffs that relied solely on IEEPA, including certain reciprocal global duties and some measures targeting Canada, Mexico, and China. However, here’s the catch: Other tariff regimes — such as those outlined in Sections 232, 301, and 122 of the Trade Act of 1974 — are still standing. Those weren’t touched by this decision, and they’re not going away.
Check out our recent Clarity podcast for more on the Supreme Court’s tariff decision here
Further, the administration isn’t sitting still either. There’s already talk of pivoting to Section 122 to impose a new 10% global tariff. So, while one door closed, another may be opening, which means the legal landscape is shifting, not settling.
Why this matters right now
There are several important factors to consider in the wake of this decision, including:
Start with the money — If your company paid IEEPA-based duties, your effective tariff rate on many imports just dropped. That improves your landed cost, changes your margin picture, and could shift pricing dynamics across the retail, consumer goods, manufacturing, and automotive sectors.
Then there’s the refund potential — Billions of dollars were collected under tariffs that are now unlawful. The government won’t write checks automatically — indeed, the administration has already signaled it will fight broad refund claims — but for individual companies, the cash at stake could be significant.
Don’t overlook your contracts — Many commercial agreements include tariff pass-through clauses, price adjustments, and indemnities. Those provisions will determine which parties actually gets the money: the importer of record, the customer, or someone else in the chain. If you restructured your supply chain around the old tariff regime, you may need to rethink those decisions, too.
What businesses should do first
There are several steps business leaders should undertake to move forward in this new environment, including:
Map your exposure — Tax and trade teams need to pull multi-year import data by Harmonized Tariff Schedule (HTS) code, country of origin, and legal authority. Figure out which entries were hit specifically by IEEPA-based tariffs, as opposed to Section 232 or 301 duties, which again, are still in effect.
Quantify the opportunity — Calculate total IEEPA duties paid by entity, jurisdiction, and period. Include a rough estimate of interest, prioritize the highest-value lanes, and flag any statutory deadlines for protests or post-summary corrections. Missing a deadline isn’t something you can easily fix later.
Preserve your rights — If you’ve already filed test cases or joined class actions, revisit your strategy with counsel. If you haven’t, evaluate quickly whether to file protests, post-summary corrections, or other protective claims with the U.S. Customs & Border Protection. These procedures will evolve, of course, but the clock already is ticking.
Get the right people in the room — This isn’t just a tax problem or a trade compliance problem. Stand up a cross-functional working group that includes tax, customs, legal, finance, supply chain, and investor relations. Agree on who owns what, how you’ll share data, and how you’ll communicate, especially if the refund could move the needle on earnings or liquidity.
Financial reporting and tax implications
Most importantly, you need to reassess your tariff-related balances and disclosures. If refunds are probable and you can estimate them, that may affect liabilities, expense recognition, and reserves. Even if the accounting is murky, material claims may need to be discussed in your report’s Management’s Discussion & Analysis (MD&A) section or in footnotes.
On the tax side, tariff refunds and lower ongoing duties flow through cost of goods sold (COGS), which changes taxable income and your business’s effective tax rate. Timing matters: When you recognize a refund for book purposes may not match when it hits for tax, creating temporary differences that need Accounting Standards Codification 740 analysis.
And don’t forget transfer pricing. Many intercompany pricing models were built during the high-tariff period and may embed those costs in tested party margins. If tariffs fall or refunds materialize, those models and the supporting documentation may need updates. Review intercompany agreements that allocate customs and tariff costs to make sure they align with both the economics and the legal entitlement to possible refunds.
Think beyond the refund
Yes, the immediate focus is on getting your company’s money back and staying compliant — but this is also a moment in which more strategic thinking is required, including:
Run scenarios — Business show run their models to see what happens if IEEPA tariffs disappear and aren’t fully replaced. Model what happens if a broad 10% global tariff lands under Section 122. Model what happens if country- or sector-specific measures expand. For each scenario, stress-test your gross margin, cash flow, and key supply chain nodes.
Revisit your sourcing strategy — Some nearshoring or supplier diversification moves you made under the old tariff structure may no longer make sense. Others may still be smart as a hedge against renewed trade tensions. The tax team needs to be part of these conversations — not just because tariffs affect cost, but because new structures reshape your effective global tax rate, foreign tax credit position, and your base erosion and profit shifting (BEPS) exposure.
Fix your data and governance — Trade policies can move fast and unpredictably. If you can’t quickly pull clean import data, run classification reviews, or model your exposure across scenarios, then you’re simply flying blind. Now is a good time to fix that.
The bottom line
The Supreme Court’s decision closed one chapter of the president’s tariff story, but it didn’t end it. For corporate tax and trade leaders, the message is straightforward: Grab the refund opportunity, protect your position, and use this moment to build a more resilient strategy for whatever comes next.
Because if there’s one thing we’ve learned, it’s that the next round of tariff changes is already on its way.
For more on the impact of tariffs on global trade, you can download a full copy of the Thomson Reuters Institute’s recent 2026 Global Trade Report here
