Supreme Court Tariff Ruling: IEEPA, Refunds, and Section 122

The U.S. Supreme Court’s tariff ruling in Learning Resources, Inc. v. Trump, decided 6–3 on February 20, 2026, struck down the sweeping global tariffs President Trump had imposed under the International Emergency Economic Powers Act (IEEPA), holding that the statute does not authorize the president to levy tariffs and that the taxing power belongs to Congress under Article I of the Constitution.¹²

What the Court Held

Chief Justice John Roberts wrote for the majority. Six justices agreed on the core point: the word “regulate” in IEEPA does not include the power to tax, and a tariff is a tax. IEEPA never uses the words “tariffs,” “duties,” or “taxes,” and the government could not identify any other statute where Congress used “regulate” to authorize taxation.³

The Court also rejected the administration’s argument that tariffs are just a milder form of embargo and therefore fit inside IEEPA’s regulatory toolkit. Tariffs, the majority wrote, “operate directly on domestic importers to raise revenue” and are “different in kind, not degree” from the embargoes, quotas, and asset freezes IEEPA does authorize.⁴

A three-justice plurality of Roberts, Gorsuch, and Barrett went a step further and applied the major questions doctrine. Because the president had claimed tariff power of “unlimited amount, duration, and scope,” they wrote, he needed “clear congressional authorization,” which IEEPA did not supply. The plurality refused to carve out an emergency or foreign-affairs exception to that requirement and treated the absence of any prior presidential use of IEEPA for tariffs in nearly fifty years as significant.³

Justice Kagan, joined by Justices Sotomayor and Jackson, concurred in the result but said standard statutory interpretation was enough to reach it without invoking the major questions doctrine.² Justice Kavanaugh dissented, joined by Justices Thomas and Alito, arguing that IEEPA’s broad foreign-affairs and national-security mandate does reach tariffs and warning that any refund process would be a “mess.”³

Which Tariffs Went Away

The ruling only reached tariffs imposed under IEEPA. Those included the February 2025 duties on Canada, Mexico, and China tied to fentanyl and border policy, the April 2025 “reciprocal” tariffs of at least 10 percent on nearly every trading partner, and the country-specific duties on Brazil, India, Russia, and others.⁵

Within hours of the decision, President Trump signed an executive order revoking the IEEPA authority behind those tariffs and directing agencies to stop collecting them.⁶ U.S. Customs and Border Protection halted collection of IEEPA duties for goods entered starting at 12:00 a.m. eastern time on February 24, 2026.⁷

Which Tariffs Are Still In Effect

Duties resting on other statutes were untouched. Section 232 tariffs on steel, aluminum, automobiles, and other goods remain in place, as do Section 301 tariffs on Chinese imports. Both authorities require formal investigations and findings before tariffs can be imposed, procedural steps IEEPA lacked.⁷

On June 1, 2026, the president modified existing Section 232 tariffs on aluminum, steel, and copper, expanding the covered product categories and adjusting rates for agricultural equipment and certain residential systems.⁸

The Section 122 Replacement Tariff

The same day the IEEPA tariffs ended, the president invoked Section 122 of the Trade Act of 1974 to impose a new 10 percent import surcharge, effective February 24, 2026. Section 122 caps tariffs at 15 percent and limits them to 150 days unless Congress votes to extend them.⁹ The new surcharge included exemptions for critical minerals, energy products, certain agricultural goods, pharmaceuticals, some electronics, and vehicles, and maintained duty-free treatment for Canadian and Mexican goods covered by the USMCA.¹⁰

That surcharge is already in court. On May 7, 2026, the Court of International Trade ruled 2–1 in State of Oregon v. Trump and Burlap and Barrel, Inc. v. Trump that the administration had not met the statutory criteria to invoke Section 122, granting summary judgment and a permanent injunction limited to three named importer plaintiffs.¹¹ The Federal Circuit issued an administrative stay on May 12, 2026, so most importers continue to pay the 10 percent. The surcharge is set to expire on July 24, 2026, under Section 122’s 150-day limit, and no congressional extension has passed.¹²

Looking past that expiration, the administration has opened new Section 301 investigations covering 86 countries that account for more than 99 percent of U.S. import value, including inquiries into manufacturing overcapacity and forced labor. Eight Section 232 investigations are also underway, covering pharmaceuticals, critical minerals, aircraft and jet engines, polysilicon, unmanned aircraft systems, wind turbines, personal protective equipment, and robots and machinery. Those could produce tariffs as high as 50 percent on certain imports and are aimed at completion by the end of 2026.¹³

How Refunds Work

Roughly $166 billion in IEEPA duties had been collected from more than 330,000 importers across over 53 million entries. The Court’s opinion did not create a refund mechanism and left “remedial mechanics entirely to future proceedings.”¹⁴³

On March 4, 2026, Judge Richard K. Eaton of the Court of International Trade ordered CBP in Atmus Filtration, Inc. v. United States to liquidate all unliquidated entries without IEEPA duties and to reliquidate entries where liquidation had not become final.¹⁴

CBP built a new system called CAPE (Consolidated Administration and Processing of Entries) inside its existing Automated Commercial Environment platform. The CAPE portal opened on April 20, 2026, and lets importers and their customs brokers submit refund claims electronically. Refunds are expected within 60 to 90 days of an accepted claim. Phase 1 covered most unliquidated entries and entries within 80 days of liquidation; Phase 2, covering reconciliation entries, was scheduled for June 29, 2026.¹⁵

Not every dollar is easy to return. In an April 2026 court filing, the government said it could process refunds for about $127 billion but gave little detail on how it would handle the rest, particularly entries with finalized tariff calculations. The Court of International Trade ordered CBP Commissioner Rodney S. Scott to appear at a June 2026 hearing to explain the delays, and over 2,500 IEEPA-related cases remain pending in the trade court.¹⁶¹⁴

What It Means for Prices

Consumers should not expect immediate relief. Businesses that raised prices to absorb the 2025 duties have been slow to lower them, and a 10 percent Section 122 surcharge is still being collected on most imports.¹⁷

Research from the Federal Reserve Bank of New York found that nearly 90 percent of the 2025 tariff costs fell on U.S. firms and consumers. The Tax Foundation estimated the tariffs added roughly $1,000 to household costs in 2025 and up to $1,300 in 2026. A Main Street Alliance survey found that 81.5 percent of small businesses raised or considered raising prices, 41.7 percent delayed expansion, and nearly a third anticipated layoffs.¹⁸

By early 2026, the U.S. average effective tariff rate had reached nearly 17 percent, the highest since the early 1930s. The Yale Budget Lab estimated the ruling opened a federal revenue hole of about $1.5 trillion.¹⁸¹⁷

What Congress Is Doing

Dozens of bills have been introduced to reassert legislative control over tariff policy. They fall into a few categories:

Broad approval requirements, such as the Trade Review Act of 2025 (S.1272/H.R.2665), which would require congressional approval within 60 days for any executive tariff, and the No Taxation Without Representation Act (S.1293).
Section 232 reforms, including the Congressional Trade Authority Act (H.R.1903) and the Reclaiming Congressional Trade Authority Act (H.R.2712), which would narrow national security definitions and require congressional review.
Emergency and Section 122 restrictions, including the Prevent Tariff Abuse Act (H.R.407), which would bar using IEEPA for tariffs at all; the Reclaim Trade Powers Act (H.R.2459/S.4049), which would repeal Section 122; and the Stop Global Tariffs Act (H.R.8228), which would end the February 2026 surcharge and mandate refunds.
Targeted restrictions such as the STABLE Trade Policy Act (S.348) and the Respect NATO Allies Act (H.R.7557), which would require congressional approval before tariffs could hit NATO members, free trade agreement partners, or major agricultural trading partners.

None of these bills had been enacted as of mid-2026.¹⁹

Why the Ruling Reaches Beyond Tariffs

The plurality applied the major questions doctrine to a presidential action rather than a regulatory agency, and explicitly refused to recognize an emergency or foreign-affairs exception. It said the doctrine applies with “particular force” when a claimed delegation involves Congress’s core power of the purse.⁴

Legal analysts have flagged several areas of executive authority that could now face closer judicial scrutiny, including spending and impoundment decisions, civilian technology export controls, and outbound investment restrictions under IEEPA. At the same time, the majority described the doctrine as a “linguistic canon” for finding the best reading of a statute rather than an elevated clear-statement rule, which analysts read as tying its reach to the conditions present here: an unprecedented, transformative assertion of power resting on ambiguous statutory language.²⁰²¹

1
SCOTUSblog. Learning Resources, Inc. v. Trump
2
Cornell Law Institute. Learning Resources, Inc. v. Trump
3
SCOTUSblog. A Breakdown of the Court’s Tariff Decision
4
Supreme Court of the United States. Learning Resources, Inc. v. Trump, Opinion
5
Office of the United States Trade Representative. Presidential Tariff Actions
6
The White House. Ending Certain Tariff Actions
7
Thomson Reuters. IEEPA Tariffs Court Decision
8
The White House. Further Adjusting the Tariff Regimes for Imports of Aluminum, Steel, and Copper Into the United States
9
The White House. Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems
10
BBC News. Trump Signs New Tariff Order After Supreme Court Ruling
11
U.S. Court of International Trade. State of Oregon v. United States, Slip Op. 26-47
12
Skadden, Arps, Slate, Meagher & Flom LLP. US Trade Court Strikes Down Section 122 Tariffs
13
American Action Forum. Replacing IEEPA Tariffs
14
Skadden, Arps, Slate, Meagher & Flom LLP. Tariff Refund Mechanism Takes Shape
15
U.S. Customs and Border Protection. IEEPA Duty Refunds
16
The New York Times. Trade Court Orders Customs Chief to Explain Tariff Refund Delays
17
The New York Times. Trump Tariffs Supreme Court Ruling
18
Brookings Institution. Brookings Experts on the Supreme Court’s Tariff Decision
19
National Taxpayers Union. Reclaiming Trade Authority: Members of Congress Introduce Reforms to Rein In Presidential Tariffs
20
Lawfare. Article I and the Major Questions Doctrine After Learning Resources
21
Yale Journal on Regulation. Tallying the Votes From Learning Resources: The Major Questions Doctrine Remains Relatively Confined