Supreme Court decision forces IEEPA tariff refunds

The Supreme Court said on February 20 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, overturning the legal basis for Trump administration duties tied to drug trafficking and trade deficits. The ruling came in *Learning Resources v. Trump* and the consolidated *V.O.S. Selections* case, which challenged tariffs imposed on imports from Canada, Mexico, China and dozens of other trading partners. The justices said the cases centered on whether IEEPA authorizes tariffs at all, and held that it does not. U.S. Customs and Border Protection has already built a refund process for duties paid under IEEPA, and importers are now focused on how to recover money already collected. ### Which tariffs did the Court knock out? President Donald Trump used IEEPA after declaring national emergencies tied to drug trafficking and what the administration called “large and persistent” trade deficits. The Supreme Court’s syllabus says those actions produced a 25% duty on most Canadian and Mexican imports, a 10% duty on most Chinese imports, and a baseline tariff of at least 10% on imports from all trading partners, with higher rates for dozens of countries. The opinion says the plaintiffs argued that IEEPA did not authorize either the “reciprocal” tariffs or the drug-trafficking tariffs. (supremecourt.gov) Two separate groups brought the cases. Learning Resources and another small-business plaintiff sued in federal district court in Washington, while V.O.S. Selections, five small businesses and 12 states sued in the Court of International Trade, according to the Supreme Court docket and opinion materials. ### What exactly did the justices decide? The Supreme Court said in the case syllabus that “the question presented is whether the International Emergency Economic Powers Act (IEEPA) authorizes the President to impose tariffs.” The Court answered that question no. (supremecourt.gov) The docket page records that in No. 24-1287 the judgment was vacated and remanded with instructions to dismiss for lack of jurisdiction, while in No. 25-250 the judgment was affirmed. That combination left intact the merits ruling in the trade court case that the tariffs were unlawful. The opinion was narrow in one respect. The syllabus frames the dispute around tariff authority under IEEPA, not around a broader invalidation of emergency powers. That matters because the ruling, as published by the Court, addresses the administration’s use of IEEPA as the source of tariff power. ### How are refunds supposed to work now? U.S. Customs and Border Protection said it is developing the Consolidated Administration and Processing of Entries, or CAPE, within the Automated Commercial Environment to process valid refund requests for IEEPA duties. (supremecourt.gov) CBP says CAPE is designed to consolidate refunds of IEEPA duties, including interest, instead of handling them one entry at a time. The agency says the first phase launched on April 20, 2026 and is limited to certain unliquidated entries and certain entries within 80 days of liquidation. CBP says importers of record and authorized customs brokers must use ACE portal accounts, provide bank information and submit CAPE declarations through the portal. The agency says each declaration can cover up to 9,999 entries and that filers can submit multiple declarations. ### Why are importers and brokers watching Customs so closely? CBP said in an April 17 fact sheet that it “will issue validated refunds” of duties paid under IEEPA pursuant to court order and appropriate statutory authority. (cbp.gov) That language means the agency has already acknowledged refunds are available when the legal prerequisites are met. The remaining questions are administrative: which entries qualify in each phase, how quickly claims can be validated, and when money is sent back. CBP has also warned that scammers may try to exploit the refund process by seeking account information from importers, according to the agency’s IEEPA refund page. The page says brokers and importers should use the ACE portal rather than outside solicitations tied to refund claims. ### What happens next for companies that paid the duties? CBP says refund claims are being handled through the ACE portal and phased CAPE rollout, with later phases planned for more complicated scenarios. (cbp.gov) Importers that paid IEEPA duties will be looking to their customs brokers, ACE account status and liquidation dates to determine when and how to file. The Supreme Court’s February 20 ruling settled the core legal question on IEEPA tariff authority; the next concrete step is at Customs, where CAPE filings and validated refunds will determine how quickly money moves back to importers. (cbp.gov) (supremecourt.gov)