Supreme Court invalidates Trump's 2025 IEEPA tariffs, orders refunds

Why it matters

The Supreme Court’s February 20 ruling against Donald Trump’s 2025 IEEPA tariffs did not end the story; it started a refund process that is now moving through customs systems, corporate filings and court dockets. In Learning Resources, Inc. v. Trump and Trump v. (supremecourt.gov) V.O.S. Selections, the court held 6-3 that the International Emergency Economic Powers Act does not authorize a president to impose tariffs. The decision invalidated duties Trump had placed on imports from Canada, Mexico and China under drug-trafficking emergency declarations, and broader “reciprocal” tariffs tied to the U.S. trade deficit. (cbp.gov) The mechanics matter because the tariffs had already been collected. (cbp.gov) U.S. Customs and Border Protection is now building and deploying a dedicated refund process, while importers, brokers and shipping companies are deciding how much money they can recover and how quickly. UPS says it has begun processing refunds for eligible shipments where it served as importer. ### Which tariffs did the court actually strike down? Chief Justice John Roberts wrote for the majority that IEEPA did not give the president tariff authority, according to the Supreme Court opinion and a Congressional Research Service summary. The ruling covered two sets of Trump tariffs announced in 2025: duties on most imports from Canada and Mexico and on many imports from China tied to illicit-drug emergencies, and a broader set of tariffs on most other U.S. imports tied to the trade deficit. (supremecourt.gov) The opinion described the trafficking tariffs as 25% on most Canadian and Mexican imports and 10% on most Chinese imports. It also said the reciprocal tariffs imposed at least a 10% duty on imports from all trading partners, with higher rates for dozens of countries. (cbp.gov) ### How are refunds supposed to work now? CBP said it is developing a refund mechanism called Consolidated Administration and Processing of Entries, or CAPE, inside the Automated Commercial Environment. The agency said CAPE is meant to consolidate IEEPA duty refunds, including interest, instead of handling them one entry at a time. (supremecourt.gov) April 20, 2026, was the start date for Phase 1 of CAPE, CBP said. That first phase is limited to certain unliquidated entries and certain entries within 80 days of liquidation, and importers of record or authorized customs brokers must submit declarations through the ACE portal. Each CAPE declaration can include as many as 9,999 entries, and filers can submit more than one declaration. (supremecourt.gov) ### Why is UPS already issuing money back? UPS said on its tariff refund page that CBP is now accepting requests for tariffs invalidated by the Supreme Court and that Phase 1 covers certain tariff payments made starting January 30, 2026, plus pending tariff payments. (cbp.gov) The company said it is processing refunds for eligible shipments where UPS served as the importer and will expand that work as later phases open. Newsweek, citing a UPS update, reported the company was working with CBP to return funds to customers where applicable. That makes carriers more than bystanders: when they acted as importer of record or customs intermediary, they became part of the repayment chain. (cbp.gov) ### What have companies told investors? Cardinal Health said in its March 31 quarterly filing that the Supreme Court ruled in February that the IEEPA tariffs were unlawful, but that uncertainty remained over the timing, scope and administrative process for refunds. That disclosure showed large importers were already treating possible recoveries as a live financial issue rather than a theoretical one. (ups.com) Walmart’s annual filing underscores why the issue is broad. The retailer said Walmart International generated about 19% of consolidated net sales in fiscal 2026 and sources goods and services across borders, leaving it exposed to tariff costs and any later recovery of those payments. (newsweek.com) ### What happens next in the unwind? CBP said CAPE will roll out in phases, with later stages adding functionality for more complicated scenarios. The agency has also warned importers to protect account information as refund activity increases and said filings must move through the ACE secure portal rather than the Automated Broker Interface. (sec.gov) UPS said it will expand its refund efforts as CBP launches future phases, and importers of record, brokers and companies that paid IEEPA duties are now watching those phases for additional eligible entries. The next concrete step remains administrative: CAPE filings through ACE, followed by CBP review and payment of approved refunds with interest. (sec.gov) (cbp.gov)

Key numbers

• The Supreme Court ruled on February 20, 2026, that Donald Trump lacked authority under IEEPA to impose 2025 tariffs, forcing the government to unwind them.
• Customs and Border Protection launched Phase 1 of its CAPE refund system on April 20, and UPS says it is processing eligible claims.
• (cbp.gov) The Supreme Court’s February 20 ruling against Donald Trump’s 2025 IEEPA tariffs did not end the story; it started a refund process that is now moving through customs systems, corporate filings and court dockets.
• Selections, the court held 6-3 that the International Emergency Economic Powers Act does not authorize a president to impose tariffs.

What happens next

• (cbp.gov) The company said it is processing refunds for eligible shipments where UPS served as the importer and will expand that work as later phases open.
• (newsweek.com) What happens next in the unwind?
• CBP said CAPE will roll out in phases, with later stages adding functionality for more complicated scenarios.

Sources

• supremecourt.gov
• cbp.gov
• ups.com
• newsweek.com
• sec.gov
• sec.gov

Quick answers