Breaking: SCOTUS Finds IEEPA Tariffs Unconstitutional - Implications for Importers and the Path to Relief

However, this decision is just the first step. Many open questions remain, including whether the US Court of International Trade (CIT) can issue a nationwide injunction against the IEEPA tariffs and what the ultimate refund mechanism will be.

The stakes could not have been higher — the IEEPA tariffs represented one of the most expansive uses of executive authority over trade policy in modern history, affecting billions of dollars in imported goods and reshaping commercial relationships across the globe. Today’s ruling, which strikes down the tariffs as unconstitutional, is poised to have major implications not only for the parties directly affected by the tariffs but also for the future of US trade policy and the scope of presidential authority over international commerce more broadly. Below, we summarize the key aspects of the decision and outline the next critical steps for importers.

Key Points on SCOTUS’ Decision 

Summary of Decision 

Three justices (Chief Justice John Roberts, Justice Neil Gorsuch, and Justice Amy Coney Barrett) found that the drug trafficking (fentanyl) and reciprocal tariffs imposed under the IEEPA are unconstitutional on the grounds that application of the tariffs under the Act violates the major questions doctrine. Essentially, this means that the text of the IEEPA statute does not permit the president to impose such broad, sweeping tariffs. A concurring opinion went further, concluding that the IEEPA’s plain text alone bars the tariffs without invoking the major questions doctrine. The opinion is lengthy and we will issue additional analysis and updates. 

Relief Uncertain 

Importantly, the decision did not provide any clear indication of retrospective relief; whether or how importers can obtain refunds for IEEPA tariffs already paid. Nor did SCOTUS address prospective relief, although its holding that the tariffs are unconstitutional suggests the government should be barred from collecting them going forward.

Collection of Tariffs on Future Shipments 

The issue of relief will likely play out in the CIT, which SCOTUS affirmed has exclusive jurisdiction over challenges to these tariffs. In V.O.S. Selections, Inc. v. United States, the CIT permanently enjoined enforcement of the executive orders underlying the IEEPA tariffs. The Federal Circuit remanded for the CIT to reconsider the appropriate scope of relief in light of Supreme Court precedent disfavoring universal injunctions, but the CIT stayed that consideration pending SCOTUS’ decision. Now that the Supreme Court has ruled the tariffs unconstitutional, the CIT will likely resume its analysis — potentially with additional briefing and oral argument. We will provide updates as this proceeding develops.

Refunds 

The mechanism for obtaining tariff refunds also remains uncertain and will also likely be decided at the CIT. Importers may need to file protests, Post Summary Corrections, or may need to file cases directly with the CIT, or another process altogether. The CIT may look to the Harbor Maintenance Tax (HMT) litigation as a model for administering IEEPA refunds. After the Supreme Court held the export HMT unconstitutional in United States v. US Shoe Corp. (1998), a claims resolution process was developed that required claimants to submit a standard form report to US Customs Service (the predecessor to US Customs and Border Protection), which would then query its records for the claimant’s HMT payments before processing the refund. We will continue to monitor developments and provide guidance as the refund process takes shape.

Immediate Next Steps 

Until we have more guidance regarding the refund mechanism, importers should continue to pull import data and monitor the liquidation status of their entries. If the protest route is viable, then importers will have 180 days after liquidation to protest liquidation and seek refunds. However, if importers must file an appeal, then they will likely have until February or April 2027 (two years from the dates when the trafficking tariffs and the reciprocal tariffs were initially imposed) to initiate an appeal seeking refunds. Therefore, it is paramount that importers stay vigilant. 

Don’t Expect Tariffs to Disappear

As anticipated, the Administration has moved swiftly to replace the IEEPA tariffs using alternative authorities. In a press conference following SCOTUS’ decision, President Trump announced that he will be imposing a 10% global tariff on all imports under Section 122 of the Trade Act of 1974. Section 122 permits a temporary tariff of up to 15% for balance-of-payments purposes, limited to 150 days absent congressional extension. President Trump also said that he would initiate several new investigations under Section 301 of the Trade Act of 1974. Trump said that he will not consult Congress in issuing new tariffs.

US Treasury Secretary Scott Bessent had previously publicly indicated that the Administration could “re-create the exact tariff structure” using these and other authorities if needed. In addition to the tariff authorities President Trump invoked today, a number of other authorities could be used after the expiration of the Section 122 150-day period. 

• Section 338 of the Tariff Act of 1930 authorizes the president to impose tariffs of up to 50% on imports from countries that “discriminate” against US commerce. 

• Ample use of Section 232 of the Trade Expansion Act of 1962 has already been made, which permits tariffs on national security grounds, although it requires a Commerce Department investigation that can take up to 270 days. 

• Section 301 of the Trade Act of 1974 authorizes retaliatory tariffs against unfair trade practices and was used to impose tariffs on China and Nicaragua. 

• Section 201 of the Trade Act of 1974 allows temporary safeguard tariffs to protect domestic industries from import surges. 

Importers should therefore anticipate continued tariff activity under alternative legal frameworks and prepare for ongoing trade policy volatility.

The International Trade team at AFS has extensive experience counseling clients on these matters, including avenues to preserve your rights to refunds. We are working with our clients to analyze their import data to determine the entries at issue and IEEPA tariffs paid. We are positioning companies to be prepared to quickly apply for tariff refunds if and when the refund mechanism is determined. We are closely monitoring these developments and will issue alerts as more information becomes available. Please reach out with any questions.