In a 6–3 decision, the Court ruled that the President does not have authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The administration had relied on that 1977 statute to justify broad “reciprocal” duties and additional tariffs tied to trade deficits and fentanyl concerns.
SCOTUS said that’s not what the law allows. And then, almost immediately, a new 10% global tariff took its place. So where does that leave importers?
What SCOTUS Actually Did
The Court held that IEEPA does not clearly authorize the imposition of tariffs. No prior president had used it for that purpose, and the majority concluded that if Congress intended to grant that kind of taxing authority, it would have said so plainly.
The decision invalidates tariffs imposed specifically under IEEPA.
It does not:
- Invalidate Section 301 tariffs on China
- Invalidate Section 232 tariffs on steel, aluminum, autos, or copper
- Prohibit future tariffs under other trade laws
- Establish how previously collected duties must be handled
In other words, the Court removed one tool, and it did not dismantle the tariff system.
The Pivot: Section 122
Within hours of the ruling, the administration invoked Section 122 of the Trade Act of 1974. That statute allows the President to impose tariffs for 150 days without a lengthy investigation. It is explicitly temporary unless Congress extends it. A 10% global tariff was announced. Collection began at 12:01 a.m. ET on February 24. It should be noted that the President has the authority to raise the global tariff to 15%, though this has not been implemented yet.
At the same time, U.S. Customs and Border Protection halted collection of the invalidated IEEPA duties. So while one tariff structure disappeared, another began, which is legally narrower and time-limited.
What Tools Remain Available to the Administration
IEEPA is no longer available for tariff action. But several other statutes remain fully intact.
Section 301
Still supports the China tariff framework. Requires investigation and findings.=
Section 232
Allows national security-based tariffs (steel, aluminum, autos). Requires Commerce Department investigations and formal determinations.
Section 338
Permits tariffs up to 50% on countries found to discriminate against U.S. commerce. Rarely used, but powerful.
Each of these authorities involves procedural steps or defined limits. IEEPA allowed immediate, expansive action tied to a declared emergency. The alternatives either require investigation or expire after a fixed period.
The $160 Billion Question: Refunds
If the tariffs were unlawful, do importers get their money back? That question remains unanswered.
Estimates suggest IEEPA tariffs generated more than $160 billion. The Supreme Court did not address whether those duties must be refunded. That issue now sits with the U.S. Court of International Trade (CIT), where thousands of cases have already been filed.
The CIT must determine:
- Whether refunds are automatic or claim-based
- Whether cases will be consolidated
- How repayment would be structured
- Whether replacement tariffs complicate refund exposure
This is not a minor administrative question. Many importers passed those costs through supply chains. Accounting, pricing, and contractual implications could follow if refunds materialize.
Global Reaction and Policy Reality
Global trading partners are watching carefully. China has signaled it may adjust countermeasures while remaining open to talks. Japan is seeking assurances under existing agreements. The European Union is navigating how the temporary tariff interacts with negotiated frameworks.
Markets appear to believe that the effective tariff rate may ultimately decline relative to the pre-ruling environment. The administration has made clear it intends to continue using available statutory tools.
The Bottom Line: What This Means for Importers
- IEEPA tariffs are invalid.
- A temporary 10% tariff under Section 122 is now in effect.
- Section 301 and Section 232 tariffs remain fully valid.
- Refunds are possible but undefined at the moment.
- Further litigation and regulatory guidance are coming.
If refunds are authorized, they will be processed through U.S. Customs and Border Protection systems. That means importers must ensure their ACE ACH account is active and properly configured. Without ACH enrollment, there is effectively no electronic pathway for refunds to be deposited.
M.E. Dey is continuing to monitor developments, track court proceedings, and engage with industry updates. If you have questions about ACE ACH setup, duty exposure review, or refund strategy planning, our team is ready to assist.