Supreme Court blocks Trump's use of IEEPA to impose tariffs, curbing emergency powers

Why it matters

The Supreme Court’s February 20 ruling did two things at once: it cut off President Donald Trump’s use of the International Emergency Economic Powers Act, or IEEPA, as a tariff statute, and it pushed the fight into a new phase over refunds, liquidation and Customs administration. (supremecourt.gov) The court said IEEPA did not authorize the tariffs Trump had imposed after declaring emergencies tied to drug trafficking and trade deficits. That left importers and states to press the next question in lower courts: how unlawfully collected duties are to be unwound. (courtlistener.com) ### What exactly did the Supreme Court block? The Supreme Court said in Learning Resources v. Trump that IEEPA does not authorize the president to impose tariffs. (courtlistener.com) The case covered Trump’s tariffs tied to what the opinion described as two asserted foreign threats: drug trafficking involving Canada, Mexico and China, and “large and persistent” trade deficits. The opinion said Trump had imposed a 25% duty on most Canadian and Mexican imports and a 10% duty on most Chinese imports under the drug-trafficking rationale. It also said he imposed a minimum 10% “reciprocal” duty on imports from all trading partners, with higher rates for dozens of countries. (supremecourt.gov) ### Why are companies now focused on refunds instead of just the legality? The Court of International Trade record shows that importers have already shifted to the mechanics of getting money back. In one December 2025 opinion, the trade court noted the government’s position that if the tariffs are ultimately held unlawful, Customs would refund duties after a final and unappealable decision ordering repayment. (supremecourt.gov) Court records also show how broad the importer response became. Costco Wholesale filed its own Court of International Trade case on November 28, 2025, and then moved to consolidate with a large group of other tariff challenges led by AGS Company Automotive Solutions. (supremecourt.gov) The Los Angeles Times reported on May 26 that companies including Cardinal Health and Walmart were seeking reimbursement after the ruling. That reporting, together with the court dockets, shows the dispute has moved from presidential power to the accounting and customs consequences of unwinding the tariffs. (cit.uscourts.gov) ### Where is the refund fight being handled? The U.S. Court of International Trade has become the main venue for the follow-on disputes. CourtListener and court records show multiple importer suits were filed there in late 2025, and at least one later case, Euro-Notions Florida v. United States, was stayed in December 2025 as the court organized new IEEPA tariff challenges. (courtlistener.com) A separate May 20, 2026 opinion from a three-judge panel in Washington v. United States and Burlap and Barrel v. United States shows the court is also handling challenges to a later Trump tariff action under Section 122 of the Trade Act of 1974. In that order, the judges denied the government’s request to stay enforcement of the judgment pending appeal. (enewspaper.latimes.com) ### What is the significance of the reported $10 billion mistake? The Daily Beast and other follow-up reports said court documents exposed a roughly $10 billion error in a refund system set up to return another set of unlawful tariffs. I could not independently verify that figure from a primary court filing available through the sources I could access here, so it remains a reported claim rather than a court-confirmed amount in this account. (courtlistener.com) The court record does show judges were aware of the government’s argument that Customs was already occupied building a refund system in another tariff matter. In the May 20 trade-court opinion, the panel summarized the government’s position as saying Customs was busy setting up a system to refund another set of unlawful tariffs. (cit.uscourts.gov) ### What happens next for importers and the administration? The next stage is likely to turn on liquidation status, final judgments and the scope of any order directing Customs to repay duties. The trade court has already described refund timing in terms of a “final and unappealable decision,” and the docket shows stayed and consolidated cases are still active. (thedailybeast.com) The administration also has other tariff authorities in play. The May 20 trade-court ruling involved Proclamation 11012 under Section 122 rather than IEEPA, showing that even after the Supreme Court’s February 20 decision, litigation over Trump tariff programs is continuing in the Court of International Trade and on appeal. (cit.uscourts.gov 1) (cit.uscourts.gov 2)

Key numbers

• On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act does not authorize President Donald Trump’s tariffs.
• The opinion said Trump had imposed a 25% duty on most Canadian and Mexican imports and a 10% duty on most Chinese imports under the drug-trafficking rationale.
• It also said he imposed a minimum 10% “reciprocal” duty on imports from all trading partners, with higher rates for dozens of countries.
• In one December 2025 opinion, the trade court noted the government’s position that if the tariffs are ultimately held unlawful, Customs would refund duties after a final and unappealable decision ordering repayment.

What happens next

• That left importers and states to press the next question in lower courts: how unlawfully collected duties are to be unwound.
• (supremecourt.gov) The Los Angeles Times reported on May 26 that companies including Cardinal Health and Walmart were seeking reimbursement after the ruling.
• (courtlistener.com) A separate May 20, 2026 opinion from a three-judge panel in Washington v.

Sources

• supremecourt.gov
• courtlistener.com
• courtlistener.com
• cit.uscourts.gov
• enewspaper.latimes.com
• cit.uscourts.gov
• thedailybeast.com

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