Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know

What Happened

On February 20, 2026, the United States Supreme Court issued its decision in Learning Resources, Inc. v. Trump and the consolidated case Trump v. V.O.S. Selections, Inc., holding 6-3 that the International Emergency Economic Powers Act (IEEPA) does not grant the president the authority to impose tariffs. The majority opinion, written by Chief Justice John Roberts, concluded that IEEPA's authorization to “regulate ... importation” does not encompass the power to levy tariffs—a power the Constitution reserves exclusively for Congress under Article I, Section 8.

The ruling affirmed the U.S. Court of Appeals for the Federal Circuit's August 2025 en banc decision, which had characterized the IEEPA tariffs as “unbounded in scope, amount, and duration.” The Federal Circuit's ruling had been stayed pending Supreme Court review, allowing tariff collection to continue throughout the appeal.

The case originated from lawsuits filed by small businesses—including Learning Resources, a toy manufacturer, and V.O.S. Selections, a wine importer—alongside a coalition of states, all of which argued that the tariffs exceeded the president's authority under IEEPA.

The Court's Reasoning

Constitutional Framework

The Court began with Article I, Section 8 of the Constitution, which grants Congress the power “To lay and collect Taxes, Duties, Imposts and Excises.” Tariffs, the Court emphasized, have long been understood as a “very clear ... branch of the taxing power.” The framers gave “Congress alone ... access to the pockets of the people” and vested no part of that taxing power in the executive branch. The government conceded that the president has no inherent Article II authority to impose tariffs.

Statutory Interpretation

The Court found that IEEPA's text does not support tariff authority for several reasons:

• No reference to tariffs: IEEPA does not mention “tariffs,” “duties,” “taxes,” or similar revenue terms. When Congress delegates tariff authority in other statutes, it uses explicit revenue-related language with caps on rates, temporal limits, and procedural preconditions. None appear in IEEPA.
• Ordinary meaning of “regulate”: The word “regulate” ordinarily means to control or govern, not to raise revenue. As Chief Justice Roberts noted, “The U.S. Code is replete with statutes granting the Executive the authority to ‘regulate’ someone or something. Yet the Government cannot identify any statute in which the power to regulate includes the power to tax.”
• Statutory structure: IEEPA lists nine verbs and 11 types of transactions, creating 99 verb-object combinations. None of the other combinations confer revenue-raising authority. Reading “regulate ... importation” as including tariffs would make it a unique outlier.
• Export clause concern: Because IEEPA authorizes regulation of both importation and exportation, interpreting “regulate” to include taxation would render part of IEEPA unconstitutional—the Constitution specifically bars taxes on exports.
• Historical practice: In nearly 50 years since IEEPA's enactment in 1977, no president had used it to impose tariffs, instead relying on tariff-specific statutes such as Section 301 or Section 232.

Major Questions Doctrine

Three justices (Chief Justice Roberts, joined by Justices Gorsuch and Barrett) also concluded that the case implicates the “major questions” doctrine—the principle that Congress must speak clearly when delegating authority of “vast economic and political significance.” Allowing the president to impose tariffs of any rate, on any product, for an unlimited duration, based solely on an emergency declaration would represent what the Court called a “transformative expansion” of executive authority, with stakes that “dwarf those of other major questions cases.”

The Dissent

Justice Kavanaugh authored a 63-page dissent, joined by Justices Thomas and Alito. Kavanaugh argued that tariffs are a “traditional and common tool to regulate importation” and that IEEPA's text, historical practice, and relevant precedents supported the president's authority. He cautioned that the ruling “may require the federal government to refund billions of dollars to importers” and could “generate uncertainty regarding various trade agreements” negotiated under the leverage of IEEPA tariffs. However, Kavanaugh also noted that “numerous other federal statutes authorize the President to impose tariffs and might justify most (if not all) of the tariffs at issue.”

Which Tariffs Were Struck Down

The ruling invalidated all tariffs imposed under IEEPA authority. These fell into two broad categories:

Fentanyl & Trafficking Tariffs

Citing the flow of fentanyl and illegal immigration, the administration imposed IEEPA tariffs on nearly all imports from three countries:

Reciprocal Tariffs

Citing trade deficits as a national emergency, the administration imposed a 10% baseline tariff on imports from virtually all trading partners beginning April 5, 2025. Higher country-specific rates were announced on April 9, paused for 90 days, and then took effect at adjusted rates on August 7, 2025.

Revenue share data from Penn Wharton Budget Model analysis of USITC trade data through November 2025.

What Was Not Affected by the Ruling

The Supreme Court's decision applies only to tariffs imposed under IEEPA. Tariffs authorized under other statutes remain in full effect:

$175 Billion: The Refund Landscape

According to analysis by the Penn Wharton Budget Model at the University of Pennsylvania, up to $175 billion in IEEPA tariff duties were collected between February 2025 and February 2026. By January 2026, IEEPA tariffs represented approximately 52% of all U.S. customs duties, with collections running at roughly $500 million per day.

China accounted for the largest share of IEEPA collections (approximately 32% by late 2025), followed by the European Union (13%), Vietnam (10%), India (8%), Mexico (4%), and Canada (2%). The remaining ~35% was spread across dozens of other trading partners subject to the 10% baseline reciprocal tariff.

While the Supreme Court did not explicitly order refunds, the ruling that these tariffs were collected without legal authority has opened the door to refund claims. On March 4, 2026, the Court of International Trade (CIT) in Atmus Filtration, Inc. v. United States ordered CBP to halt liquidation of IEEPA duties and begin unwinding duties already assessed.

How to Claim Your IEEPA Tariff Refund

Importers seeking to recover IEEPA duties should take the following steps:

What Comes Next: Replacement Tariffs and Investigations

Within hours of the ruling, the administration announced replacement measures:

Section 122 Global Tariff

A 10% tariff on all imports was imposed under Section 122 of the Trade Act of 1974, which authorizes a “temporary import surcharge” to address balance-of-payments deficits. Two key constraints: Section 122 tariffs are capped at 15% and limited to 150 days. By setting the rate at 10%, the administration left room to increase pressure on specific trading partners while staying within the statutory cap.

Section 301 Investigations

The administration simultaneously launched country-specific investigations under Section 301, which authorizes the U.S. Trade Representative to investigate unfair trade practices and recommend tariffs. Unlike Section 122, Section 301 tariffs have no statutory rate cap or time limit. These investigations are expected to form the legal basis for longer-term replacement tariffs once the 150-day Section 122 window closes. For a complete guide to existing Section 301 tariff rates on Chinese goods, including the 2024 sector-specific increases, see our reference page.

Impact on Trade Agreements

Prior to the ruling, the administration had reached or announced reciprocal tariff arrangements with 19 countries, leveraging IEEPA tariffs as negotiating pressure. These agreements included commitments on tariff reductions, critical minerals access, investment pledges, and other concessions. With the principal source of executive leverage now struck down, the durability of these arrangements is uncertain, particularly for countries still in active negotiations.

Timeline: IEEPA Tariffs from Start to Finish

Frequently Asked Questions

Sources & Further Reading

• SCOTUSblog — Supreme Court Strikes Down Tariffs (Amy Howe, Feb. 20, 2026)
• Holland & Knight — Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know Now
• Penn Wharton Budget Model — IEEPA Revenue and Potential Refunds
• Wikipedia — Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026)
• WilmerHale — Supreme Court Strikes Down IEEPA Tariffs — What Now?
• Skadden — The Supreme Court Ends IEEPA Tariffs, Bringing Fresh Uncertainty
• Peterson Institute — What the Supreme Court's Tariff Ruling Changes, and What It Doesn't