If the US Supreme Court (SCOTUS, or the Court) strikes down President Trump’s tariffs based on the International Emergency Economic Powers Act (IEEPA), that ruling is unlikely to be the final word for importers who may be entitled to tariff refunds. Importers should be ready for the potentially unexpected legal, political, and economic consequences that could follow.
As we have previously written, the US Court of International Trade (CIT) ruled in May 2025, and the Federal Circuit upheld the CIT’s ruling, that the Trump Administration’s IEEPA-based tariffs are unlawful. The Court has taken the case up for review, which was argued on November 5, 2025.
The Court’s highly-anticipated decision in the tariffs case, Learning Resources, Inc. v. Trump, is reportedly not expected until at least February 20, 2026 when the justices are scheduled to return from recess. The Court is considering the legality of, and may strike down, the Administration’s IEEPA-based tariffs, including the fentanyl-related tariffs on goods from Canada, Mexico, and China, as well as the “reciprocal” tariffs imposed on virtually every country in the world. Tariffs based on non-IEEPA authorities including Section 232 and Section 301 are not being challenged in this case (meaning current and future tariffs under these authorities will remain unaffected).
A Court Decision is Not Likely to Fully Resolve Importers’ Tariff Liability
A Court decision that strikes down any part of the IEEPA-based tariffs is expected to raise additional issues, some of which we preview below, that could take months or years to resolve. These issues could include further legal challenges, administrative processes, and political dealings.
Depending on the scope of the Court’s decision and the Trump Administration’s reaction, several potentially overlapping scenarios could unfold.
If the Court rules at least partially against the Administration, follow-on litigation and political pressure is likely.
A Court decision to strike down at least some IEEPA-based tariffs is not likely to address every potential refund scenario, which may result in additional legal challenges by the Administration and/or importers seeking refunds. For example, the Administration might offer to apply payments on unlawful tariffs as “credits” against any future duties owed rather than cash refunds. The Administration may also assert that duties paid on IEEPA-based tariffs will not be refunded and will instead cover new retroactive tariffs, the legality of which would likely be challenged.
Additionally, the Administration may leverage political pressure and regulatory friction to dissuade importers from pursuing refunds. It is possible that the White House could, for example, publicly pressure importers to not seek tariff refunds, threaten importers with regulatory retaliation for seeking refunds, or make any refund process prohibitively burdensome.
Similar tariffs, new names: In the absence of IEEPA tariff authority, the Administration could use other laws to impose new forward-looking tariffs.
If IEEPA-based tariffs are struck down, the Administration might pursue additional tariffs under other authorities. The Trump Administration has already signaled its willingness to use provisions of the Trade Act of 1974, Trade Expansion Act of 1962, and Tariff Act of 1930 to unilaterally impose new, industry-specific or broadly-applicable tariffs subject to certain restrictions.
These authorities include:
- Section 122 of the Trade Act authorizes the President to impose worldwide tariffs to address “balance-of-payments deficits” and unfair trade practices. This could function as a limited substitute for the IEEPA-based “reciprocal” tariffs, however, Section 122 tariffs are limited to 15% and a maximum of 150 days (absent extension of that time period by Congress).
- Section 232 of the Trade Expansion Act authorizes tariffs to address imports that threaten national security as determined through “investigation” processes initiated by the president and conducted by the Department of Commerce’s Bureau of Industry and Security. Currently, the Trump Administration has imposed sector-specific Section 232 tariffs on certain imported aluminum, steel, automobiles and parts, copper, semiconductor and semiconductor manufacturing equipment, medium- and heavy- duty trucks and parts, and timber and lumber. The president has also initiated investigations to consider tariffs on critical minerals, pharmaceutical products, polysilicon and its derivatives, drones and their components, certain medical equipment and devices, wind turbines and their parts and components, and robotics and industrial machinery.
- Section 301 of the Trade Act authorizes tariffs to address “unreasonable” or “discriminatory action” by foreign countries which burden or restrict US commerce. Section 301 tariffs are already in place on a variety of products from China subject to certain exclusions. Presently, there are Section 301 investigations into China’s semiconductor and maritime, logistics, and shipbuilding sectors, among others.
- Section 338 of the Tariff Act authorizes duties of up to 50% on countries that impose trade measures that unfairly discriminate against US commerce, though tariffs could not be imposed under this authority in response to measures by foreign countries that apply “equally” to other countries — i.e., the United States would need to be specifically targeted. It appears Section 338 has never been used to impose tariffs (though it explicitly grants that authority).
Alternative tariff authorities vary in terms of implementation timeline and likelihood of legal challenges. Section 232- and 301-based tariffs require investigation processes before they can take effect, which can take several months even when expedited. On the other hand, new Section 122- or 338-based tariffs might not require as much time and do not rely on an investigation process, despite other limitations. Section 122 and 338 tariffs, however, would be more likely to face legal challenges (perhaps even more so than the Administration’s IEEPA-based tariffs) due to the untested and seemingly broad nature of the underlying authorities.
If the Court rules in favor of the Administration, the new politically-charged trade landscape may be here to stay.
In the apparently unlikely scenario that the Court decides to uphold all IEEPA-based tariffs, importers would not be entitled to tariff refunds, and it is not clear that any further challenges to IEEPA-based tariffs would be meaningful. As a result, the Administration might consider pursing additional IEEPA-based tariffs, which could result in further retaliatory measures from trading partners. For additional details on potential fallout, including from the EU, see our recent post concerning available retaliatory measures in response to recent US tariff threats.
The Administration may also be emboldened to threaten or actually impose tariffs in the first instance in pursuit of international policy goals. As a result, tariffs may increasingly be used as a coercive tool or to spur informal and eventually formal bilateral trade agreements to deescalate IEEPA-based tariffs.
Steps Importers Could Consider Now
As an initial matter, importers should not generally need to sue now for the right to a potential post-decision refund. In December 2025, the CIT ruled that importers do not need to file lawsuits to preserve their right to tariff refunds in the event the Court strikes down IEEPA-based tariffs, even for liquidated entries or entries that an importer has not protested. The CIT also confirmed that refunds would remain available regardless of the liquidation status of affected imports, even citing a May court filing in which the Trump Administration conceded that refunds, including interest, will be issued if the Court rules the tariffs unlawful.
Any Court decision that entitles importers to tariff refunds could result in a time-consuming process, depending on the outcome of this litigation and the complexity of an importer’s entries. To prepare, importers might consider organizing import data now to prepare to apply for refunds, including to identify the type of tariffs paid (e.g., reciprocal tariffs, fentanyl tariffs, Section 232 tariffs, and/or Section 301 tariffs) and whether more than one type of tariff applied to an import (i.e., whether those tariffs stacked or were mutually exclusive). Importers might also ensure that the importer’s refund analysis is based on the information reflected in US Customs and Border Protection’s (CBP) Automated Commercial Environment (ACE), e.g., which should show corrections and other formal changes to entry data.
Implementing a reasonable import compliance program is required under CBP rules and is likely to increase in importance after the Court’s decision. If any IEEPA-based tariffs remain in effect, the Trump Administration will likely continue to prioritize enforcement. The Administration is likely to keep increasing pressure on importers – as it concerns tariffs imposed under other authorities – even if the IEEPA-based tariffs are struck down. Accordingly, importers have an opportunity now to take steps to help ensure that imports reflect accurate valuation, classification, and country of origin.
