On February 20, 2026, the U.S. Supreme Court held that tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) were unlawful because the President had exceeded the authority granted under that act. Learning Resources, Inc. v. Trump. The Court’s decision nonetheless left open questions about potential future presidential tariffs under other federal statutes and perhaps, of more immediate concern, whether importers may obtain refunds of the now-invalidated IEEPA tariffs. In the wake of Learning Resources, the Court of International Trade issued a decision on March 4, 2026, ordering a path forward down the road of refund recovery.
Since its 1977 enactment, IEEPA has primarily been used to impose financial sanctions on embargoed countries as well as specific people and companies located in those countries. The law permits the President, after declaring a national emergency due to an “unusual and extraordinary threat” to U.S. national security, foreign policy, or the economy, to regulate transactions involving the foreign country that is the source of the threat.
In 2025, President Trump cited drug trafficking and trade deficits as national emergencies to invoke IEEPA and impose a comprehensive array of tariffs, including 25% tariffs on most imports from Canada and Mexico, 10% percent tariffs on most imports from China, and varying tariffs of at least 10% on imports from most other countries (the “reciprocal tariffs”). A number of small U.S. companies and a coalition of states filed multiple lawsuits contending that IEEPA does not authorize these tariffs. The Court of International Trade agreed with the plaintiffs, the U.S. Court of Appeals for the Federal Circuit affirmed, and finally the issue came before the U.S. Supreme Court, at which time the cases were consolidated.
In the Learning Resources decision, the Supreme Court rejected the government’s argument that IEEPA’s authorization of the power to “regulate” importation constituted authority to “impose tariffs of unlimited amount and duration, on any product from any country.” The Court held that if Congress had intended to delegate the power to impose tariffs, it would have done so expressly.
Justice Kavanagh’s dissenting opinion raised significant practical points for the business community which the majority opinion did not address. He suggested that other federal statutes “might justify most (if not all) of the tariffs at issue in this case.” He also noted that the government “may be required to refund billions of dollars to importers . . . even though some importers may have already passed on costs to consumers” (a refund process he characterized as a “mess”). There is also the concern that the decision may “generate uncertainty” regarding trade deals reached while the tariffs were in effect.
In business circles, reaction to Learning Resources has focused on two topics. First, what (if any) new tariffs will the Trump administration impose in light of the invalidation of the IEEPA tariffs? Second, will importers who paid the now-invalidated IEEPA tariffs be entitled to a refund of the payments they made?
President Trump rescinded the IEPPA tariffs and then issued a proclamation implementing a 10% worldwide tariff (subject to certain exemptions that largely correspond with exemptions to the IEEPA tariffs) pursuant to Section 122 of the Trade Act of 1974. Section 122 authorizes the President to impose tariffs of up to 15% for a period of no more than 150 days. In subsequent public statements, President Trump has stated that he intends to increase this rate to 15%. The administration also appears to be exploring whether to implement additional tariffs pursuant to other statutes. Thus, it is likely that the high tariff environment will continue, with new tariffs forthcoming along with their inevitable legal challenges.
President Trump also has indicated that tariff refunds will not be forthcoming, noting that there may be years of litigation over whether importers are entitled to refunds. Customs and Border Protection (CBP) has not yet issued any guidance about refund requests.
Importers who wish to seek refunds in light of the Court’s decision may wish to consider two main options.
- First, through their customs broker, importers may file a protest seeking a refund of IEEPA duties. Protests typically must be filed within 180 days after a customs entry is liquidated. Therefore, this option entails a limited timeframe for which refunds may be available. Acting quickly to pursue this step may preserve the protest remedy going back as far as possible. However, it is not yet known how CBP will process and rule on such protests.
- Second, importers may file lawsuits at the Court of International Trade seeking refunds. Such court actions generally have a two-year statute of limitations. Some importers have already taken that step. On March 4, 2026, the Court of International Trade issued a decision ordering CBP to reprocess customs entries involving the IEEPA tariffs. The court held that “[a]ll importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision.” Accordingly, the court ordered CBP to liquidate any unliquidated entries subject to the IEEPA duties “without regard to the IEEPA duties” and to “reliquidate[]” any liquidated entries for which liquidation is not final “without regard to IEEPA duties.”
The effect of this decision, if implemented, would be to provide refunds to importers of record for all entries not finally liquidated, regardless of whether the importers initiated a suit in the Court of International Trade. However, CBP may appeal the decision and seek a stay of its implementation until the appeal is decided. Furthermore, even if the decision is eventually implemented, it is not yet clear what administrative process CBP will set up for importers to be able to obtain the refunds. It seems likely that questions regarding entitlement to refunds for IEEPA tariffs will not be finally settled for months or even years, until the litigation fully concludes.
There are also steps that importers may wish to consider to position themselves in the current legal landscape over tariffs. Companies that paid IEEPA tariffs can speak with their customs brokers regarding the viability of using the CBP protest mechanism to seek refunds based on the company’s particular situation. Those companies can also review the contracts and terms and conditions governing their import transactions and seek to make changes where needed to maintain pricing flexibility to respond to potential additional tariffs that may be implemented after the Supreme Court’s decision. Finally, companies can stay abreast of the legal developments over refunds of the IEEPA tariffs. For example, as the pending litigation further develops, it may open the door to more predictable alternatives for refunds.
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