On Friday, February 20, 2026, the Supreme Courtissued a landmark 6–3 ruling striking down tariffs imposed by the administration under the International Emergency Economic Powers Act (IEEPA).

The Court held that the executive branch lacks constitutional authority to impose tariffs under IEEPA because the Constitution vests the taxing power exclusively in Congress. According to the Constitution, Congress must expressly delegate tariff authority if it intends to transfer that power to the President — and IEEPA contains no such clear delegation.

The ruling does not affect tariffs imposed under statutes that provide explicit authority, including Section 232 of the Trade Expansion Act (national-security-based tariffs covering products such as steel, aluminum, and copper) and Section 301 of the Trade Act of 1974 (addressing unfair trade practices). Those statutes contain express congressional delegation of power and remain intact unless separately challenged.

Administration Response

Within hours of the ruling, the administration announced plans to implement a new 10% global tariff under alternate legal authority. Officials also warned that any effort by importers to recover duties paid under IEEPA could face prolonged litigation lasting years.

Enormous Financial Stakes

Economists at the Wharton School of the University of Pennsylvania estimate total U.S. duty collections from US importers exceeded $261 billion in 2025, compared to $91.5 billion in 2024 — nearly a 300% year-over-year increase. If IEEPA tariffs are ultimately refundable, more than $200 billion could be subject to rebate claims by US importers.

The Supreme Court did not address whether importers are entitled to refunds. That issue is now moving through the courts, with more than 1,800 importers already filing lawsuits.

Business organizations, including the U.S. Chamber of Commerce and the National Retail Federation, are pressing for a formal refund mechanism. However, absent guidance from the Court, lower courts will likely determine how repayment is handled.

Because tariffs are assessed on specific import entries, class actions are generally not feasible, and importers must pursue individual claims. Most companies choose to file before the U.S. Court of International Trade.

What Companies Should Do Now

Companies engaged in cross-border trade should take immediate steps to protect potential claims and prepare for renewed tariff exposure:

• Maintain thorough records of all 2025 customs entries and duties paid.

• Monitor developments concerning refund procedures and litigation.

• Prepare operationally and financially for newly announced tariffs.

• Watch for updates on electronic refund processes.

• Consider submitting comments on pending customs and trade changes.

In sum, the Supreme Court decision reshapes the constitutional limits of executive trade authority while opening a new chapter of refund litigation that could span years.