Supreme Court rules certain tariffs unlawful, could force $149B in refunds

The Supreme Court did not issue a new tariff ruling on May 21 or May 22. The key decision came on February 20, 2026, when the court held in *Learning Resources, Inc. v. Trump* that the International Emergency Economic Powers Act, or IEEPA, does not authorize the president to impose tariffs. That ruling covered tariffs Trump had imposed under emergency powers, including country-specific drug-trafficking duties and the broader “reciprocal” tariff program. The refund story is real, but the viral framing is often too broad. The court’s decision did not wipe out all U.S. tariffs. It applied to tariffs imposed under IEEPA, not to tariffs imposed under other laws such as Section 232 or Section 301. Trade lawyers and Customs guidance have drawn that distinction repeatedly since the ruling. (supremecourt.gov) ### Which tariffs were actually struck down? The February 20 ruling addressed tariffs imposed under IEEPA, a 1977 law that lets the president respond to national emergencies involving foreign threats. Chief Justice John Roberts wrote for the court that the statute does not give the president tariff authority. The opinion described tariffs tied to drug-trafficking concerns involving Canada, Mexico and China, as well as the later global “reciprocal” tariffs tied to trade deficits. (seyfarth.com) That means social posts saying “the Supreme Court ruled tariffs unlawful” need a qualifier. The court ruled unlawful the tariffs that rested on IEEPA. Other tariff programs remained outside that decision. ### Where does the $149 billion or $175 billion figure come from? The larger estimate came from the Penn Wharton Budget Model. On February 20, the group projected that reversing the IEEPA tariffs could generate up to $175 billion in refunds. (supremecourt.gov) Reuters reported that estimate the same day, and CNBC also cited it in coverage of the ruling. (seyfarth.com) A separate Yale Budget Lab estimate put the likely refund pool at about $165 billion. So the numbers circulating online are best understood as model-based estimates of total unlawfully collected IEEPA duties, not as a single official government total announced in late May. I could not verify an official Supreme Court or CBP source for a precise $149 billion figure. (budgetmodel.wharton.upenn.edu) Based on the reporting trail, that number appears to be a social-media shorthand or secondary estimate, while the better-sourced public estimates are roughly $165 billion to $175 billion. ### Has the government actually started paying refunds? (budgetlab.yale.edu) Yes. CNBC reported on May 12 that the first wave of refunds had begun flowing to companies after the Supreme Court decision. Oshkosh Corp. told CNBC it had started receiving payments, and Basic Fun said it had also begun receiving refunds. U.S. Customs and Border Protection said it was building a refund system called CAPE inside the ACE portal. (budgetmodel.wharton.upenn.edu) CBP says CAPE is meant to process IEEPA duty refunds, including interest, and that Phase 1 launched on April 20 for certain unliquidated entries and certain entries within 80 days of liquidation. Reuters reported, based on a CBP court filing, that as of May 11 the agency had finalized expected refunds with interest totaling $35.46 billion on 8.3 million shipments. (cnbc.com) That is a processed portion of the overall universe, not the ceiling. ### Do consumers get checks, or do importers get the money? CBP says refunds go to the importer of record or a designated notify party with banking information in the ACE portal. (cbp.gov) The agency explicitly says it is only able to refund IEEPA duties to those parties, not directly to consumers who may have paid higher prices. That is why large retailers or manufacturers may be discussed as potential recipients. (msn.com) But any company-specific claim needs evidence that the company was the importer of record on covered entries and has filed valid claims. A generic claim that “Walmart gets a refund for duties paid this month” is too loose unless it identifies the covered IEEPA entries and the company’s filing status. (cbp.gov) ### Why did a lower trade court matter after the Supreme Court ruled? On March 4, Judge Richard Eaton of the U.S. Court of International Trade said “all importers of record” whose entries were subject to IEEPA duties are entitled to the benefit of the Supreme Court’s decision. That order directed Customs to reliquidate eligible entries without the unlawful duties. (cbp.gov) A separate May 7 Court of International Trade ruling struck down Trump’s later 10% global tariff imposed under Section 122 of the Trade Act of 1974. That was a different case and a different legal theory. It added to the tariff litigation, but it is not the Supreme Court ruling that drove the big IEEPA refund estimates circulating in February and again on social media in May. (courthousenews.com) ### What is the cleanest way to describe the story now? The clean version is this: the Supreme Court ruled on February 20 that IEEPA does not authorize the president to impose tariffs; that opened the door to very large refunds for importers that paid those specific duties; model estimates put the total exposure around $165 billion to $175 billion; and CBP had processed $35.46 billion in finalized refunds with interest as of May 11. (cit.uscourts.gov) If you want, I can turn this into a tighter X/Twitter thread with numbered posts and cleaner social phrasing. (supremecourt.gov)